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Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 5 May 2021
  6. Current session: 12 May 2021 to 6 April 2025
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Displaying 1063 contributions

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Economy and Fair Work Committee

Scotland’s Supply Chain

Meeting date: 9 November 2022

Ivan McKee

There is clarity on the offer around green ports, in terms of land and buildings transaction tax and the UK Government’s commitments on national insurance contributions. That is already clearly identified, and we managed to secure the same offer that was made to English ports.

One of the issues around the margin on that is that much of that was determined on fixed time periods with dates. Clearly, because of the delays, we are looking to see whether some of those dates can be extended, to make sure that we get the full benefit.

Part of the complexity has been the Truss Administration announcements on investment zones, which the new Administration is having a look at, to understand where it wants to go with that proposal. Even under the Truss Administration, there was a lack of clarity on what an investment zone was and what it would deliver. At one point, it looked as if it might even have more benefits than a green port or free port, which was all a bit strange. We are waiting for clarity on what that process looks like and whether it even exists. That is another dimension of complexity and uncertainty on which we are waiting for some clarification from the UK Government.

Economy and Fair Work Committee

Scotland’s Supply Chain

Meeting date: 9 November 2022

Ivan McKee

Obviously, that is a significant issue. As you rightly said, it is a reserved area. As we move forward on the constitutional agenda, that is an area of regulation on which it is important that we are clear about where we would position ourselves following independence, and the opportunity that we would take to use those powers to address such issues. We would have a very different approach. It is important that we take forward that work.

The UK Government will control the free ports in England. We can look at the effects and impacts of that but, as I said earlier, we had clear red lines around the awarding process and the operation of green ports in Scotland. Those red lines included a number of factors relating to net zero, fair work and controls to make sure that the process was such that the risk of the dangers that we are all alive to was minimised.

We remain focused on the issue. As we roll out the green free port programme—which I hope that we will do sooner rather than later—you can rest assured that we will continue our efforts to make sure that there is no degradation of standards across a range of policy areas, including on tax evasion.

Economy and Fair Work Committee

Scotland’s Supply Chain

Meeting date: 9 November 2022

Ivan McKee

Our economic inactivity rate was higher for quite a long time, but it has been on a downward trend and has now gone below the UK rate.

Economy and Fair Work Committee

Scotland’s Supply Chain

Meeting date: 9 November 2022

Ivan McKee

First, without going into too much detail, orders for Alpha Solway would have been placed based on demand. There would have been a lead time, but it would have been clear that there were no orders after that. It was clear when the demand would end.

PPE usage is much reduced compared with what it was previously, as we all know. As a result of resilience strategies, and for many other reasons, we have significant stockpiles of PPE, which are being used to meet public sector demand.

I have made it clear that, with regard to the parts of the supply chain that are visible to us, such as those relating to the Scottish Government or National Services Scotland through NHS Scotland, nothing is being purchased at the moment that Alpha Solway could supply. I have written to the parts of the public sector where we do not have visibility to ask whether they are purchasing PPE, so that, if they are, we can have a conversation about that being manufactured by Alpha Solway. To the best of my knowledge, no one else is purchasing PPE that Alpha Solway could manufacture. If you are aware of any examples, or if anyone else is, I would be interested to hear about those so that we can follow up on them.

We have been proactive, both in what we have done in the areas that we control and in the strong signals that we have sent the rest of the public sector about the critical importance of the Scottish supply chain. We have worked with public sector procurement to ensure that everything that can be made in Scotland is made in Scotland.

Are you saying that we should spend public money to buy stuff that we do not need in order to keep people in jobs? That is a point of view, but the current pressures on public sector finance mean that it would not be a good use of public resources to buy stuff, keep it and then throw it away later. That would not make sense.

Economy and Fair Work Committee

Scotland’s Supply Chain

Meeting date: 9 November 2022

Ivan McKee

That is a great question and it gives me the opportunity to talk through some of the background work that we have done.

In our engagement with the UK Government on investment zones during the past few weeks, we had a good look at our regional economic policy direction. Some great work has happened on that: the work by David Bell has been fed into the process as well as the work that we are doing on regional economic partnerships—and I have met with those partnerships, as a group, several times, to ensure that they are plugged into the national strategy work. The regional economic strategies that they are pulling together tie in with the work that we have already done on regional prospectuses to focus on regional strengths in specific sectors, and on how we can align that with our investment activity on a Scotland-wide level and the ways in which Scottish Development International can take it on to the global stage. A lot of that is coming together in a coherent and helpful way. Most importantly, it is led and driven by the regional economic partnerships, which have identified their strengths and work with us and the agencies to take that forward.

We saw enterprise zones in that light, and we had to decide how they would fit into the existing work not as something separate but as another tool that would help to drive forward the regional economic development agenda, which involves working closely with local partners. I am not giving much away here, because it is clearly not happening anyway, but our approach to the zones was to continue to work with REPs to allow them to identify which sectors, clusters and geographies in their regions were most able to benefit from them and how they could benefit from the many excellent clusters that we already have across many parts of the country. That continues to be our approach.

In answer to the part of the question about our existing enterprise areas and what we do with them, we have extended them, but we need to make some decisions on to what extent we should build on those, develop them or refocus them. Again, we will do that work along with regional partners.

Economy and Fair Work Committee

Scotland’s Supply Chain

Meeting date: 9 November 2022

Ivan McKee

Each of the eight REP areas have increasing sharpness of clarity about their regions. In the north-east we work with Opportunity North East—ONE—and others, including the REP, on that, and the work that they have done means they have clarity about their energy sector and also the food and drink, tourism and life sciences offerings, so they know that there are three or four areas in which they have real strengths. We can look at each part of Scotland and say: “This area is good at these three or four things and that area is good at another three or four things.” That work is really taking shape, and I will ask Carron Flockhart to comment on it.

The skills pipeline being aligned to that is important, but I think colleges get that. They understand the businesses and sectors that they work with in their regional economies and know what is important in any given sector. You are right that the jobs will range from very advanced, PhD-level jobs—such as those that involve working with businesses that are focused on the BioHub in Aberdeen—to entry-level jobs in hospitality, which are also very important, and training will be required to be able to fulfil those roles effectively in an increasingly digitised economy.

All of that has a role to play, and it is fair to say that the work that we are doing on the skills agenda is increasingly making sure that there is alignment at Scotland level and at regional level.

11:00  

Economy and Fair Work Committee

Scotland’s Supply Chain

Meeting date: 9 November 2022

Ivan McKee

Far be it from me to criticise the minister with responsibility for that policy area. I think that what the Minister for Transport said stands, but I will ask Andy Park to comment more specifically on the projects.

Economy and Fair Work Committee

Scotland’s Supply Chain

Meeting date: 9 November 2022

Ivan McKee

As I have indicated, the matter is outside my portfolio, and I do not want to comment on it without having the full information. The Minister for Transport has commented on it, and I will invite her to respond to your specific questions. I will do that as a matter of course following the meeting. If you want to put a request in writing, I am sure that she will be delighted to answer your questions.

Economy and Fair Work Committee

Scotland’s Supply Chain

Meeting date: 9 November 2022

Ivan McKee

Absolutely. Specifically on ScotWind, there are a number of parts to that. The big international players absolutely understand that and they are dealing with it. Their investment decisions on what they will make in Scotland and what they will make elsewhere are driven by a number of factors. I have given them reassurance and as much clarity as we can, given that it is a complicated scenario that has a lot of moving parts—consenting, planning, grid connections and a range of other things all have an impact, in addition to the supply chain and energy aspects.

Many businesses, including at least 80 per cent of businesses in the oil and gas sector, are moving into the renewable energy supply chain. We are working closely with them to give them information, provide the technology and connect them into the network, so that they can take advantage of that. We are also supporting other businesses and sectors to move into the area.

It is a complicated piece of work. You are right that, in some cases, businesses will have to make investment decisions in advance of knowing what will happen. The work that we and the enterprise agencies are doing supports that. The Scottish National Investment Bank is providing support in some cases, too. It is working with private sector investors. We are keen to make sure that, where there is a gap and something needs to be done to ensure that the supply chain is robust and ready, we are engaged at a detailed level to make that happen.

Economy and Fair Work Committee

Scotland’s Supply Chain

Meeting date: 9 November 2022

Ivan McKee

We work on that together. Yesterday evening, we had a call on that specific issue and about how we align the work of the public sector to support that. Michael leads on the energy side, and I pick up things on the supply chain side.