Meeting of the Parliament (Hybrid)

Meeting date: Thursday, March 18, 2021

Official Report 1072KB pdf

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Portfolio Question Time

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Economy, Fair Work and Culture

The next item of business is portfolio questions on economy, fair work and culture. I ask members for succinct questions and answers in order that we can get as many members in as possible.

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Clyde Mission Division

To ask the Scottish Government whether the Clyde mission division has received any response from outwith the country to the call by the economy secretary for ideas “to make the river an engine of sustainable and inclusive growth for Glasgow, the region and Scotland”. (S5O-05130)

I thank the member for raising awareness of the Clyde mission call for ideas. The call was launched on Monday 1 March and will remain open until 29 March. The Clyde mission aims to use the river and immediate surrounding land as a national strategic asset. It is focused on developing new, green jobs; making use of vacant and derelict land; adapting to climate change; accelerating our progress to net zero; and using the river to create better places for people and communities.

The call for ideas seeks views from those who live, work and do business around the Clyde on what the Clyde mission means to them and what success would look like. We have not yet received any responses from outwith Scotland but would welcome them. I encourage colleagues whose constituencies are adjacent to the river to promote engagement with the call for ideas within their area.

The initiative is welcome. It is well overdue and I am grateful that it is taking place now; it is a good thing. What is the Government doing to ensure that the public spend on the upcoming loch class ferry replacement is used to attract inward investment and to bring knowledge and skills into Scotland?

Clearly, we are all focusing on achieving net zero emissions by 2045, and there are opportunities for the Scottish supply chain to embrace that goal through the improvement and maintenance of lifeline ferry services. The small vessel replacement programme is part of that green recovery and will strengthen the viability of some of our remotest communities. Scottish shipyards will be able to construct vessels, which will be an opportunity to support significant upskilling requirements in construction.

I welcome the member’s interest in that particular aspect of transport, but I point out that, although it will include some of the Clyde routes, it falls outside my ministerial responsibility for the Clyde mission. I am sure that Paul Wheelhouse, whose portfolio of energy and connectivity in the islands includes responsibility for ferries, will be happy to provide further information.

Gil Paterson has not only been a stalwart of my party; he is a founding member of the Scottish Parliament. He has helped to steer it and devolution for the benefit of not only his constituents but everybody in Scotland. I am sure that everyone will join me in wishing him well and congratulating him on making an excellent speech on the Clydebank blitz last night.

Thank you very much.

I welcome the update on the Clyde mission and send my best wishes to Gil Paterson.

The cabinet secretary is aware that the Fair Work Convention has raised concerns that Scotland is not on track to become a fair work nation by 2025 unless bold action is taken. Will the cabinet secretary explain her aspirations for the contribution that the Clyde mission could make to Scotland becoming a fair work nation?

I recently met the Fair Work Convention. I share its concerns about the momentum required to ensure that we do what we all want to do, which is to become a fair work nation by 2025. The convention’s advice and input is welcome.

Public money is going into the Clyde mission to support ideas, but the money should also be supporting new, good, green jobs and creating a workforce with the skills to secure those jobs. Conditionality, and the issues that we are all aware of, will be part of our on-going grants and support, including for the Clyde mission.

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Jobs Protection (Highlands and Islands)

To ask the Scottish Government what it is doing to protect jobs in the Highlands and Islands. (S5O-05131)

Since the start of the pandemic, we have provided more than £330 million to support businesses and protect jobs across the Highlands and Islands.

That is alongside the £58.1 million budget that we provided to support the work of Highlands and Islands Enterprise across the region. During this financial year, Highlands and Islands Enterprise has supported more than 1,900 jobs, of which 1,125 were safeguarded.

We are also investing £242.5 million in regional growth deals across the Highlands and Islands, as part of a package of measures to ensure longer-term growth and job creation.

Next week, Parliament will go into recess ahead of the election. During that period, the Scottish Government cannot make any funding announcements, yet in the Highlands and Islands, and in the rest of Scotland, companies are going to the wall due to a lack of Covid business support. Sadly, many of those companies are in constituencies represented by cabinet secretaries who have the powers and levers to help but who refuse to use them.

Will the Scottish Government therefore give power and funds to local authorities, which stand ready to assist those companies during this period? To those companies, £2,000 of discretionary support is an insult rather than assistance.

I do not accept the premise of the member’s question. More than £500 million has been distributed to businesses across Scotland since November and more than £3 billion has been distributed in the past year. Those members who did not support the budget would not support its funding for businesses, but business support is part of the budget provision.

The announcement made by the First Minister this week will see payments made for business support in March, as well as a top-up grant—which Rhoda Grant may not be aware of—of additional support to help businesses restart during April and May. There is extensive support.

The discretionary fund has been increased from £30 million to £120 million. Local authorities have discretion in how to spend that. I agree that £2,000 is not adequate, except for micro-companies, but many companies would benefit from that discretionary fund. I encourage councils to use that fund during April.

One means of protecting jobs, in the Highlands and Islands and elsewhere, has been the furlough scheme. As I understand it, those who began a job after October do not qualify for that scheme until May. Will the cabinet secretary call on the United Kingdom Government to do something about that?

A number of factors, such as seasonality in the Highlands and Islands snow sport sector, can cause people to start jobs later in the year. Any failure to open the furlough scheme to people who started new jobs since October leaves a significant and growing number of workers without support.

We have called on the chancellor to revise the cut-off date for entry to the scheme, to provide support to people who have started new jobs since the end of October 2020, who will not be able to access their support until 1 May 2021. The member is correct in saying that that is a way of supporting people, particularly those in new jobs.

We know that the Highlands and Islands region has a distinct number of people of people on furlough because of the nature of its economy.

Hospitality is one of the hardest-hit sectors of our economy. Against the backdrop of average debt of £80,000 per site, and with much of the sector relying on evening trade, will the Scottish Government review the restrictions on indoor sale of alcohol and opening times, in order to provide a lifeline to the sector and protect jobs?

That is exactly what we did in discussion with the hospitality industry, and I commend the work of the Scottish Tourism Alliance in particular.

Two things are very important to make sure that companies are sustainable. One is to make sure that customers from across Scotland can reach them, so the major change of allowing all of us to travel across Scotland from 26 April is really important. The other thing that is important for viability is opening hours, which is exactly why we listened to the hospitality industry, which has welcomed the changes that we are making. Do some people in the industry, including pub owners, want to be able to sell alcohol much earlier? Yes, but they have said that right throughout the year.

We have to balance health with the economy. We have managed to deliver hope and confidence with the announcement, which has, by and large, been welcomed by business. There is a route map through these difficulties. For the hospitality sector in particular, initially from 26 April and then from 17 May and onwards, it is really important to get the closed economy back open.

An islands impact assessment of Highlands and Islands Airports Ltd’s plans to centralise air traffic services, backed by the Scottish Government, has identified a number of significant economic impacts and no positive impacts at all. In my Orkney Islands constituency, it is estimated that 16 full-time equivalent jobs would go, with the loss of £650,000 in gross salaries. How does the cabinet secretary believe that that is consistent with Scottish Government principles to support jobs in our islands?

Clearly, my colleague the Cabinet Secretary for Transport, whose responsibility this is, has to balance the modernisation of the system, working with air traffic controllers, with the local impact of airports on particular economies that the member points out.

I will draw the member’s concerns to the attention of Michael Matheson and ensure that he is alert to them—I am sure that he is. Obviously, islands impact assessments are part and parcel of the Scottish Government’s approach, and there have to be checks and balances in that. The associated economic benefits of improving the provision of any airport will be essential. Clearly, the Covid implications add another dimension to the impacts that the member is talking about.

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Adults with Additional Support Needs (Employment)

To ask the Scottish Government how it is supporting adults with additional support needs in the West Scotland region into employment. (S5O-05132)

The Scottish Government is working to ensure that everyone who wishes it has access to fair and sustainable work, with opportunities for progression. Fair start Scotland, our devolved employment service, supports people of all ages who face the greatest challenges in obtaining work by offering personalised one-to-one support that is tailored to individual circumstances. For participants with additional support needs, Fair start Scotland offers specialist support, including individual placement and support and supported employment, where appropriate.

In addition, our no one left behind model, which places people at the centre of design and delivery, provides employability support to individuals of all ages, including adults with additional support needs, and supports their journey towards and into work.

We continue to work with our partners, including the third sector, to understand the impact of Covid-19 on people with additional support needs, and to identify what actions would help to mitigate negative impacts on people who are seeking to enter or sustain employment.

Despite the Government continuing to promise to reduce the gap by at least half, the employment rate for disabled people still sits as low as 47.8 per cent, which compares with 81.3 per cent for those who are not disabled.

The Scottish National Party’s “A Fairer Scotland for Disabled People: employment action plan” sets out an interim target of an employment rate of 60 per cent for disabled people by 2030. To reach that milestone and, ultimately, to halve the gap, the employment rate of disabled people will need to increase by 1 percentage point every year.

Although the Government, having reached 45.6 per cent in 2018, is currently on target, there is concern that the target will be missed because the pandemic has disproportionately affected disabled workers. What further steps will the Government take to ensure that disabled people are supported during Scotland’s economic recovery?

If you will indulge me, Presiding Officer, I note that this will be my last exchange with Mary Fee, so I will quickly pay tribute to all the efforts that she has undertaken while in Parliament. On matters such as these in particular, she always addresses them constructively and on a non-partisan basis. I wish her well.

Mary Fee has picked up on an area that is of concern to me. She made the point that we have made progress and that, on the current trajectory, we will meet our target. However, I share her concern that Covid-19 has the potential to put things into reverse. Therefore, the work that we are undertaking through the no one left behind policy, the extension of fair start Scotland and the access to work stakeholder forum—which we have established despite access to work being a reserved responsibility—is important and very much designed to achieve the end that Mary Fee and I both want. That end is that we at least halve the disability employment gap and ensure fairness in our labour market.

Question 4 has been withdrawn.

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Aggreko

To ask the Scottish Government what its response is to reports that Aggreko is to become another large-scale Scotland-based listed company that will lose its independence through a takeover. (S5O-05134)

As a company that is seeking to be at the forefront of the green technology challenge, Aggreko exemplifies our ambitions for a low-carbon economy and increasing Scottish innovation.

I note that the company is positive about the role of TDR Capital and I Squared Capital in developing the business further and building on its significant international success. That is to be welcomed, but the Scottish Government will, of course, continue to engage with the company and new investment partners to establish what more we can do to secure and grow the company’s operations in Scotland.

Does the minister share my frustration that, when companies are taken over in Scotland, we lose the top jobs, the headquarters, the decision making, and the ancillary jobs, such as those in legal, accountancy and hospitality departments? Can the Government do anything to oppose such takeovers?

I am sure that John Mason will understand that, with the powers that we have, the answer to his second question is no. The other perspective that I will articulate is that inward investment has, of course, an important role to play in our economy.

On the broad sweep of John Mason’s question, I say that much of that would concern me, so we would seek to act where necessary. However, in the context of the question being about a specific company—people from Dumbarton and the Vale of Leven might be listening; as a son of the rock, I know the area well—it is important to say that there is no indication that that will happen in this case. As I said, will we will continue to engage with Aggreko to make sure that we support the company not just for the benefit of the company, but for the benefit of Scotland and the communities of Dumbarton and the Vale of Leven.

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Real Living Wage (Public Sector Contracts)

To ask the Scottish Government how it will utilise its public sector procurement to ensure that companies that are in receipt of public sector contracts pay staff the real living wage and provide longer-term employment and training opportunities. (S5O-05135)

The Procurement Reform (Scotland) Act 2014 already requires public bodies to consider and act on opportunities to improve economic, social and environmental wellbeing through their procurement. That includes addressing fair work and applying community benefit requirements, which are key mechanisms that have been used for many years to secure targeted training and recruitment opportunities.

The Scottish Government is also using other mechanisms to encourage more companies to adopt fair work practices. The green port model is an exemplar of Scotland’s values and ambitions. It adapts the United Kingdom Government’s free port model by adding Scotland’s priorities to it. It requires operators and businesses who benefit from that package of incentives to adopt our fair work first approach, which includes payment of the real living wage, and the Scottish business pledge, which boosts innovation and inclusive growth within communities, upholds the highest environmental protections and contributes to a net zero economy.

It is great that the Scottish Government encourages companies to use the real living wage and to act on environmental priorities, but what monitoring does it carry out to ensure that public procurement actually delivers the real living wage to all employees who are covered by public procurement contracts? Surely it is a straightforward issue to require that in contracts that are signed by the Scottish Government and public sector organisations.

Does the Scottish Government recognise that, in Scotland, women, in particular, are more likely to be earning less than the real living wage? How will the Government target them specifically to enable them to overcome the additional barriers that they face in accessing training opportunities? How will it act on that to change the opportunities that will be available to people as we come out of the pandemic and recover from it?

On issues related to employment of women, Ms Boyack will be aware that my colleague Jamie Hepburn is overseeing a range of measures to address specific challenges in the labour market, including measures that aim to close the gender pay gap and to ensure that women and all groups in society who are disadvantaged in that regard are able to take full advantage of opportunities.

I turn to Ms Boyack’s questions on the real living wage. Some 92 per cent of all suppliers who were delivering live Scottish Government contracts during the past financial year made a commitment to pay it. Although that is encouraging, we continue to strive towards achieving 100 per cent.

As for monitoring, as part of their established annual reporting cycle in annual procurement reports, public bodies are required to report the number of contracts that they have awarded that have included fair work first criteria. Current monitoring arrangements for public bodies check whether a contract has been delivered in line with the agreed terms. In addition, contractors that commit to adopting the fair work first criteria in delivery of a contract are asked to include on their own website a statement highlighting their commitment to advancing those criteria for workers who are engaged on the contract.

A wide range of measures on monitoring is in place. As I have said, 92 per cent of all suppliers are already conforming to the fair work first requirements.

We have a supplementary question from Willie Coffey.

I thank the minister for mentioning green ports as an example of Government support for businesses that pay the real living wage and support fair work first. Is the Scottish Government ready to publish the prospectus to invite bids to establish fair green ports in Scotland? Might that process start before the parliamentary recess?

Yes, we are ready to publish the applicant prospectus. However, sadly, we cannot make any progress due to the UK Government’s inordinate and unacceptable delay in finalising its elements of the work. There is now a real risk that the pre-election period in Scotland will begin without that prospectus having been launched. That is why today I have published a draft version of our applicant prospectus for green ports in Scotland, which sets out the key measures that relate to devolved responsibilities—namely, those on tax and planning. We intend that the reserved elements should align with those in the free port bidding prospectus for England.

However, let me be clear: our requirements that green ports include implementation of fair work first principles and a robust plan for transition to net zero are red lines. We will not support any model that does not include those essential elements, and we will not engage in a race to the bottom.

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Brexit (Economic Impacts)

To ask the Scottish Government what recent engagement it has had with the United Kingdom Government regarding managing the economic impacts of Brexit. (S5O-05136)

The Scottish Government is deeply concerned by emerging evidence that Brexit is having a severe impact on the ability of Scottish businesses to trade effectively and competitively with the European Union, with lasting consequences for our economy.

Scottish Government ministers remain in regular contact with UK ministers about the economic impact of Brexit and are pressing for urgent support for businesses that are being adversely impacted. Most recently, together with UK Government ministers, I chaired a meeting of the Scottish business growth group, which heard from business, employer and employee representative organisations about the difficulties that are being caused by new trading arrangements and the need for further assistance.

Indeed, just a few hours ago, I had a similar meeting with Michael Gove and business organisations as part of the Brexit meeting series. The Scottish Government will continue to work hard to address problems and blockages where it is in our power to do so.

Has the cabinet secretary noted that the Office for Budget Responsibility suggests that there will be a 4 per cent drop in productivity compared with the position if we had stayed in the European Union and a temporary reduction in the first quarter of this year of some 0.5 per cent of gross domestic product? Is it now absolutely vital that the UK Government provides additional funding to the Scottish Government so that we can support the businesses that the cabinet secretary has just referred to and the workers who are employed in them?

Recent funding for seafood exporters and small and medium-sized enterprises in the UK is welcome, but piecemeal funding can at best provide only a temporary sticking-plaster, considering the sheer scale of the costs and losses that are emerging. We are making that very clear to the UK Government. The additional funding cannot address the core problem, which lies in the very thin nature of the deal. It is vital that the UK Government listens and responds to what we are telling it.

We hear that imports from France to the UK are down by 13 per cent, imports from Italy are down by 38 per cent and imports from Germany are down by 30 per cent, while exports from the UK to France are down by 20 per cent and exports from the UK to Italy are down by a staggering 70 per cent. It is clear that the UK Government’s trade statistics are, in addition to the statistics that we are hearing from other countries, telling it that there is a problem.

We remain ready to work with the UK Government on solutions. Productive proposals are being put forward. Its refusal to engage ignores the fact that the effects will be long lasting and dangerous for our businesses, our communities and our economy.

Presiding Officer, this is an opportunity for me to say to Stewart Stevenson that he has spoken in the Parliament very sensibly and informatively over many years and in many speeches. He has served his constituents well and has been a real driver for change, particularly on climate change. I thank him and wish him well in his retirement.

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Covid-19 Recovery Plan (Highlands and Islands)

To ask the Scottish Government whether it has a Covid-19 economic recovery plan for the Highlands and Islands region. (S5O-05137)

We detailed our plans for economic recovery in our response to the advisory group on economic recovery and we have developed them in a number of publications since then. They include our commitment to a model that addresses regional needs and issues and a renewed focus on place-based initiatives. We have committed over £1.2 billion to drive Scotland’s economic recovery and, as I said in my answer to Rhoda Grant, significant funding has been and will be invested across the Highlands and Islands to aid recovery and renewal.

At the convention of the Highlands and Islands on Monday, I launched our first population strategy to address the complex demographic challenges for our economy. We will continue to work with partners through the convention to address those and wider economic issues.

The cabinet secretary will be aware that many small hospitality businesses in the Highlands and Islands have been badly hit during the pandemic. Many have received little or no income since the end of 2019. What further support, specifically, can hospitality businesses in the Highlands and Islands access as Scotland moves out of lockdown?

My colleagues Kate Forbes and Fergus Ewing have been providing business support initiatives particularly for hospitality. Funds are available to help to support smaller businesses in the sector that do not pay council tax. Across the hospitality sector, the announcement of the restart grant support, in addition to two extra weeks of the strategic framework business fund support grants, means that in the period of reopening, from 26 April onwards, there should be resources to help the sector.

I appeal to everybody, when they can do so safely, to support Highlands and Islands hospitality with their patronage—people who live locally and those who will be able to travel there after 26 April.