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Chamber and committees

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 2 May 2025
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Displaying 1067 contributions

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Economy and Fair Work Committee

Scotland’s Supply Chain

Meeting date: 9 November 2022

Ivan McKee

We continue to engage with the UK Government. I have a list somewhere of the dates on which letters have been sent on that issue and a range of others.

You are right to say that the policy is misguided and is a huge brake on the economy. Unfortunately, it is a policy that has not only been continued by successive UK Governments over the past few weeks but which, unfortunately, the Westminster Opposition has got a misguided and unhelpful approach to, as was indicated over the weekend.

Our position is clear: Scotland’s economy needs to be open. We need to have free movement and to be part of the European single market. We need to have a much more flexible approach to immigration so that people who come here to study or for other reasons and have talents that we need are able to contribute to the growth of Scotland’s economy and help to fill some of the critical shortages that we have across the economy.

We continue to engage with the UK Government on that and to put pressure on it. You can be assured that we take every opportunity to highlight that issue in ministerial engagement and in other forums. The UK Government needs to wake up and take a more sensible and business-friendly approach to immigration.

Economy and Fair Work Committee

Scotland’s Supply Chain

Meeting date: 9 November 2022

Ivan McKee

As I said, the Scottish Government, in partnership with other devolved Administrations, has communicated with the UK Government fairly regularly over the past few weeks and months. We have encouraged and called on it to take specific steps, such as extending the period of certainty for businesses through the energy price cap and, as I mentioned, providing support through the social security system. We have called on the UK Government to take action in other areas, too.

As I have already said, the turmoil in the UK Government, with it taking the wrong turn and then U-turning on taxation and other policies, has been extremely unhelpful when it comes to getting helpful and effective responses about what needs to be done.

Economy and Fair Work Committee

Scotland’s Supply Chain

Meeting date: 9 November 2022

Ivan McKee

There are a few parts to that. I will hand over to Andy Park to talk in more detail about facilities.

In general, you are absolutely right. There is a challenge, although it is slightly less pressing than it was a number of months ago. As you know, there were issues with the UK-wide authority regarding testing, for example. That was a challenge. I think that there has been some movement there, but there is more to do.

It is important to make those careers as attractive as possible. We have engaged closely with the haulage sector to understand how we can do that. The rest and welfare facilities for drivers are part of that.

There is also the issue of modal shift and the attempt to get as much freight as possible on to rail, which to some extent lessens the need for heavy goods vehicle drivers. There is work with a cross-industry group, which I lead, to look at opportunities for sending more freight to and from Europe or beyond by sea, rather than trucking it down the length of the UK. We are looking at opportunities to expand the capacity for that. That will relieve some of the pressure on HGV drivers.

Andy Park can pick up on the rest and welfare aspects.

Economy and Fair Work Committee

Scotland’s Supply Chain

Meeting date: 9 November 2022

Ivan McKee

On the Logan report? Yes. I met Mark Logan last week to talk about the progress that has been made. He is leading work on the education side of that. I point out that we have invested in new computer science hardware for schools, the digital start fund and digital skills pipeline projects, and we have also funded the Digital Xtra Fund. A range of support for digital skills is in place.

There is also STACS—Scottish teachers advancing computing science—which is a teacher-led organisation that is designed to spread best practice and advise us on implementation of that aspect of the STER. Work is happening. Obviously, you will have read the report on the STER, which places great emphasis on getting the education piece right first, because everything kind of builds on and follows from that. The review recognises that there is much to be done on that.

Across the range of things that I have identified, we are implementing and making progress. As I said, a few days ago, I had a conversation with Mark Logan to talk about that and other aspects that we are taking forward, such as the tech scalers network.

Economy and Fair Work Committee

Scotland’s Supply Chain

Meeting date: 9 November 2022

Ivan McKee

Absolutely there is. If that did not come across in the reply, it should have. The supply chain development programme that we are taking forward is very much focused on identifying areas of the economy and supply chains in which we can build more resilience and shift to having more capacity and capability in Scotland, particularly in manufacturing. That covers a wide range of programmes, including the work in Scotland to support the building of indigenous local supply chains for floating offshore wind technology.

On hydrogen, we recently published a report that identifies opportunities for manufacturing businesses in the upcoming hydrogen supply chain.

There are opportunities in construction, the timber supply chain, offsite manufacturing for the construction sector, and in life sciences around medicines manufacture. We are, of course, about to open the medicines manufacturing innovation centre in Inchinnan. We recognise that there are opportunities across a whole range of sectors for Scotland to further strengthen our indigenous supply chains and to encourage and support Scottish businesses to take advantage of those.

Of course, the committee will recognise that global supply chains are complicated and that, clearly, with regard to the raw material supply situation and many manufacturing processes, we are not in a position to be able to take over all supply chains, and it would be foolish to attempt to do that, given the complexities that are involved. However, of course, for reasons of economic development and resilience, where we can engage with supply chains, we seek to do that.

Much of our approach is built on the response to the pandemic. As you know, we were successful in building up an indigenous Scottish supply chain for personal protective equipment during that time.

Economy and Fair Work Committee

Scotland’s Supply Chain

Meeting date: 9 November 2022

Ivan McKee

As I said, the priority with regard to supply chains is to look at where there are opportunities for us to be competitive because we have the necessary capability and technology to maximise the opportunities for the manufacture of products within Scotland.

On the food supply chain specifically, Scotland has a thriving food and drink sector, which we are proud of. The Cabinet Secretary for Rural Affairs and Islands is focused on what we do to continue to develop that sector. There are many factors that relate to agriculture more broadly, including climate change and financial support, but the supply chain is a big issue, and, where there are opportunities for us to grow more produce in Scotland in order to support resilience, and where that makes sense for the agriculture sector, that is something that we are focused on.

Economy and Fair Work Committee

Scotland’s Supply Chain

Meeting date: 9 November 2022

Ivan McKee

That is correct.

Economy and Fair Work Committee

Scotland’s Supply Chain

Meeting date: 9 November 2022

Ivan McKee

I will let Dermot Rhatigan talk specifically on timber and the broader stuff that we are doing in that regard. Timber is one of the areas of focus in the supply chain development programme. In Scotland, we manufacture more of our housing stock from timber than is the case in the rest of the UK. We see opportunities to do more of that and to increase embodied carbon. There are technical issues, but Built Environment-Smarter Transformation, or BE-ST, which is the construction innovation centre over in Blantyre, is leading the way on research, and is working with universities and others on mass laminated products and other products that can be utilised more extensively in the supply chain.

I have engaged with sawmills and others on what they can do to increase output. One of the challenges that we have with timber is that it has probably the longest lead time of any item—it has a 30-year lead time—which means that we will not see the results of any decisions that are made now for a very long time. I should say, though, that Scotland’s forest coverage continues to increase, which is to be welcomed.

It is perhaps worth mentioning other factors that highlight the complexity of this issue. For a start, there is the clear biodiversity challenge of which species you choose to grow, given that what you grow in order to mass produce housing stock, say, might not be what you need to grow for other purposes or might not be part of the balance that you would want from a biodiversity point of view. Those things have to be considered, too, and they are part of what we need to think about with regard to native species. We are all committed to getting that balance right.

Further downstream, there is also the work that is being taken forward by my colleague Patrick Harvie and others on heat in buildings and the decarbonisation of property as part of the net zero agenda. Making changes to regulations to encourage the Scottish supply chain will, of course, be a factor, but the primary concern will be changes that deliver the best cost-effective solution to the net zero challenge. Getting that balance right is something that we are working on across Government, but all of that work is happening so that we can move forward as fast as we can within the current constraints.

Economy and Fair Work Committee

Scotland’s Supply Chain

Meeting date: 9 November 2022

Ivan McKee

That is absolutely done. I worked in manufacturing for 30 years, and I understand how this stuff works. We are 100 per cent focused on that, relentlessly.

You will know that it is illegal to specify what you have just asked us to specify because of the World Trade Organization’s agreement on Government procurement, or GPA, rules and our international free trade agreements—the European Union trade agreement and so on. We must have an open market.

We do everything that we can to ensure that as much of the product as possible is manufactured in Scotland. We make that visible. We produce guidelines on that, and we work—I refer to the importance of the investment in Alpha Solway—to ensure that businesses and supply chains have the capacity, capability, expertise and technology to compete in a global market and win contracts.

Alpha Solway has done a great job in winning contracts. It did that fair and square, and it beat competition from around the world. That is because of the support in training, investment and so on from the Scottish public sector.

As I said, all of that has to be done within the rules. That is the legal reality of the system in which we operate. However, as Graeme Cook said, our success in that regard has been quite significant. In Scotland, 47 per cent of the spend in public sector procurement goes to SMEs. That is significantly in advance of anything that is happening in the rest of the UK, where the percentage is in the 20s, and across the EU, where the average is somewhere in the high 20 per cent range.

We have made significant progress in that regard, and the results demonstrate that. However, the focus on that continues to be relentless. We look for every opportunity through the supplier development programme; our round-table discussions with SMEs to understand the challenges for them in accessing the public procurement process; working with partners across the public sector; and the work that we are doing on the Scotland innovates portal, which we have just launched. That invites Scottish businesses with innovative solutions to public sector challenges to put those online so that we can assess them and find a public sector procurement route for them. We look for opportunities through the work that CivTech does in putting out public sector challenges.

We are relentless on all that stuff. We have tremendous focus on it, and I regularly meet procurement officials to take work forward. As members understand, all of that is, of course, done within our legal restrictions.

Economy and Fair Work Committee

Scotland’s Supply Chain

Meeting date: 9 November 2022

Ivan McKee

We do not have the power to tell a local authority, for example—