Seòmar agus comataidhean

I will speak to amendments 57, 67 and 68. I have been a member of this Parliament long enough to know that, when we set targets, they are often observed in the breach rather than in the observance, whether it is in the national health service or child poverty. Sometimes, targets are dropped altogether—look at emissions targets and climate change—but they nonetheless provide a statement of intent.

For the avoidance of doubt, I have suggested that one of the targets that we should include—an appropriate target—would be to see a doubling of the size of the worker co-op employee ownership sector by 2030, which is entirely in line with the Government’s stated policy, going back to the programme for government 2021, which talked about a target of 500 employee-owned businesses registered in Scotland by 2030, up from around 200 in 2024. I think that it is a perfectly reasonable target to set. It is commensurate with the Government’s own stated position. It helps in our drive for data collection, which is widely understood to be important in the passing of this legislation. It is also consistent with the approach that is taken by Parliament with the national strategy for economic transformation. Amendment 57 is entirely in keeping with that approach.

My other two amendments in the group relate to reviewing legislation within the first year after royal assent to the bill has been granted. Amendment 67 calls for the Government to consider business tax reliefs, as well as the small business bonus. There are other non-domestic rates exemptions already on the statute book for properties, for example, that contribute towards net zero targets. There is a right-to-buy relief for crofting communities, for example, upon conversion. I am simply suggesting that we take those existing provisions and look at how they might be applied to encourage the growth of the employee ownership sector.

I also draw to the committee’s attention the McInroy review group report commissioned by the Scottish Government that came out in September 2024, which said in its recommendation number 17 that the UK and Scottish Governments should explore potential tax relief. Amendment 67 simply seeks to make sure that that recommendation is not lost or left behind.

Similarly, and finally, amendment 68 is a request to look at procurement rules. When Parliament passed legislation on public procurement in 2014 and 2015, seeking to transpose the 2014 European Union public procurement directive, there was some debate about whether there should be reserved contracts to certain sectors of the social economy. The minister and I have worked together on a business in Larbert—Haven Products—which is a supported business. We have managed to keep it afloat and tried to win public contracts for it.

Supported businesses are covered by the existing legislation. Although the EU directive provided for mutualistic and social enterprises to be an option for reserved contracts, that option was not exercised by the Parliament when the regulations were set in 2015. All that I am calling for in amendment 68 is for that decision to be reviewed. Let us see whether we cannot look at a reserved contract status for certain types of social enterprise, employee ownership, worker co-operatives. That would align with EU policy, but would also be the right thing to do. Again, amendment 68 is simply calling for the Government to review procurement rules in the context set out in the amendment within 12 months of royal assent.

Thank you very much, convener, and thanks for the opportunity to move my amendment.

Amendment 60 is an attempt to change the status of the measures that are set out in the community wealth building action plans, from measures that “may” be covered to measures that “must” be covered. I think that it is important that the action plans must include public procurement, must include land ownership diversification, must include promoting equality, employment opportunities and so on, and must include promoting employee-owned businesses.

My approach reflects two of the recommendations that the committee made in its stage 1 report. The first one, in paragraph 54 on page 10 of the report, talks about the need for

“more consistent adoption of community wealth building”.

Having musts rather than mays points us towards that more consistent adoption.

I am also reflecting paragraph 69, on page 13 of the report. In the context of the statement that needs to be prepared by the minister, I think that that spirit transfers across to community wealth building action plans, where the committee recommends that

“the Bill should clearly articulate what this statement will include, rather than what it ‘may’ include.”

Amendment 60 is an attempt to introduce that approach to action plans. It is also an amendment that is supported by Co-operatives UK.

Amendment 62 seeks to add Co-operative Development Scotland as a relevant body. It remains the co-operative development agency for Scotland, established in 2006, and is under the wing of Scottish Enterprise, which was the minister’s defence in arguing not to include it in amendments last week. However, we are talking about community wealth building, and co-operative development is absolutely central to that.

Last week, I mentioned that the staffing level at CDS, at Scottish Enterprise, has shrunk and shrunk and shrunk over the years. It is now down to a bare minimum of, I think, one and a half members of staff. I compared that with the level at the Wales co-operative development centre, Cwmpas, which has 80 staff working on co-operative development. I suggest that the Scottish Government needs to reflect on that, and I ask the committee to take that into account.

Absolutely—had the bill had a wider scope, I would have introduced amendments that would have called for Co-operative Development Scotland itself to be established on a statutory footing. Back in the days when it was established, there was some discussion about whether it should be the subject of primary legislation. In order to get things moving more quickly, it was decided to set it up within Scottish Enterprise without legislating for it explicitly. So, there is some history to that.

Two other organisations need to be included in this section of the bill, one of which is the Scottish National Investment Bank. I return to the report from September 2024 on inclusive democratic business models, in which recommendation 11 was that the Government should grow

“the role of the Scottish National Investment Bank (SNIB) to intentionally and specifically support”

inclusive democratic business models. I also note that this committee’s report after its own deliberations on the bill at stage 1 included, at paragraph 82, the finding:

“The Bill and its accompanying documents do not set out the criteria used to determine the relevant public bodies. Consequently, the Committee was unclear on how the Scottish Government’s list was developed”.

That view was also reflected in paragraph 89 of the committee’s stage 1 report, which recommended:

“The Committee asks the Scottish Government to consider the organisations identified as having been omitted from the list of relevant public bodies and to provide the rationale for their exclusion. The Committee is particularly interested in understanding the reasons for not including the Scottish National Investment Bank, given its prominent role in supporting economic development.”

How is Skills Development Scotland a relevant body, whereas the Scottish National Investment Bank is not?

My final amendment in this group, amendment 64, would add local government pension schemes to the legislation. For example, the Strathclyde pension fund is a defined contribution scheme worth £31.3 billion—the assets that it manages are to the value of £31.3 billion. Local government pension schemes across Scotland are valued at various levels; one valuation that I saw said that they are worth £60 billion, which is the equivalent of an entire year’s budget for the Scottish Government.

A glimpse at the possibilities that local government pension schemes could offer has been provided by Preston City Council, which is one of the pioneering community wealth building councils. It has pioneered local investment. I also reflect that, in Falkirk in 2015, the local government pension scheme made a significant investment in housing. That is an example of reinvesting in the local economy rather than simply investing in derivatives in the far east, as often happens.

I am happy to take up that offer of a further discussion with Mr Stewart, who brings ministerial as well as constituency experience to the subject.

I think that it is appropriate to include local government pension schemes here, because community wealth building is about place. It is about having a local and regional focus and about keeping wealth that is raised locally for investment locally, which is something that local government pension schemes could do.

I have long held the view that pension funds are a huge engine for investment, but they are largely a sleeping giant—which I think should be awakened. I think that the bill provides us with an opportunity to bring that about.

Amendment 66 seeks to require the guidance to set out the steps that the Scottish National Investment Bank and the enterprise agencies will take

“to encourage and support the development of employee-owned businesses.”

My reference point for that is the long-standing commitment to double the size of the employee-owned sector in the Scottish economy.

As this is my last amendment, I would like to make some final points. In the stage 1 debate, the minister used the expression “right and proportionate” over and over. I think that amendment 66 is right and proportionate, as have been the other amendments that I have lodged. None of them have been aimed at making the bill longer; they have been aimed at making it better.

In the end, the fundamental question is whether the legislation will bring about change. That will be the litmus test of the act. We still have time between now and the final passage of the legislation at stage 3 to see what we can do to strengthen the bill and make it a better one.

I will talk about encouraging in another context shortly, and that might be a better way of showing exactly what I mean, and a recognition of where some of the limitations are.

Amendment 50 is an attempt to bring up the idea that, in the context of an employee-owned conversion, there could be a financing member that is external to the enterprise. Again, the committee will be very familiar with the work that Scottish Enterprise and other enterprise agencies do in trying to pitch to business angels and other external financial sources to help invest in the Scottish economy.

Amendment 47, which also relates to the ministerial statement, raises the important issue, again in the context of community wealth building, of challenging outsourcing. That is to understand that a founding principle of community wealth building is to stop leakage and to build greater self-sufficiency in a local economy. In my view, we should be encouraging insourcing and not outsourcing of public services. We have seen good examples of that in recent years. The most recent Audit Scotland report on the national health service has shown evidence of the extent to which bank and agency nursing has been reduced, and more of those services are now provided in-house. More widely than that, Mr Coffey will be familiar with HMP Kilmarnock, which was outsourced and has now been insourced, and of Cumnock community hospital, which was outsourced and is now insourced. In Lanarkshire, where Serco had the contract at Wishaw general hospital, that has now been insourced. On the railways, where Abellio and Serco had the contracts, those have now been insourced. So, what I am talking about in the amendment is perfectly consistent with the positions that have been taken in this session of Parliament.

With your indulgence, convener, I am also bound to draw on a recent STUC-commissioned report into outsourcing, which pointed out that the outsourcing of social care and soft facilities, which are often the services that are outsourced, in effect means that women’s jobs are much more likely to be outsourced than men’s jobs. That is a consideration.

Paragraph 9.3 of the STUC report addresses the five pillars of community wealth building. It says:

“Each of these elements”

of community wealth building

“is undermined by the outsourcing of public services. Smaller economic delivery units are most likely to re-spend money earned from providing services at a local level; the smallest economic unit of delivery is directly employed staff, and the shortest supply chain is direct provision.”

10:45

I turn to my amendment 48, which is also on the proposed ministerial statement. Democratic forms of ownership and financial services are, again, part and parcel of what we should be encouraging in community wealth building legislation that is passed by this Parliament. Mutually owned banks and building societies, credit unions and municipal banks should be part and parcel of the mosaic of community wealth building, which we should be considering the promotion of. I recognise that it was a feature of the committee’s stage 1 report, in paragraphs 114 to 124, which said:

“Finance is one of the five pillars of CWB”,

and I reflect on the fact that the deputy convener referred to that in her speech during the stage 1 debate.

I have dealt with amendments 49 and 50.

Amendment 51 is, again, on the ministerial statement ask, and it calls on Scottish Enterprise, Highlands and Islands Enterprise, South of Scotland Enterprise and the Scottish National Investment Bank to

“encourage and support … employee-owned businesses.”

I reflect on the fact that the chair of the Scottish National Investment Bank, Willie Watt, at a meeting of the Public Audit Committee, told me:

“employee ownership is to be encouraged, because it is good from the point of view of aligning the workforce with the success of the organisation and its long-term nature. I have long been a supporter of employee ownership.”—[Official Report, Public Audit Committee, 25 June 2025; c 35.]

What I am doing through amendment 51 is literally reflecting that view. I am also amplifying one of the principal conclusions of the Scottish Government’s review that looked into inclusive and democratic business models. Chaired by Neil McInroy, the review was launched in September 2024, and, in recommendation 11, it called for the Scottish Government to

“Grow the role of the Scottish National Investment Bank … to intentionally and specifically support”

inclusive democratic business models.

I will finish with amendments 58 and 59, which go back to insourcing rather than outsourcing municipal banks, mutual banks and building societies, and credit unions, but which, in this context, address local community wealth building partnerships.

I move amendment 46.

Thank heavens for small mercies. I thank the minister for accepting amendment 51, although I realise that it is subject to the committee’s views. I also thank him for his dialogue and for his offer of continuing dialogue between stages 2 and 3, which I will certainly take up. I welcome his open approach.

The minister’s suggestion that some of my amendments are better addressed to the economic democracy group would be all well and good if the economic democracy group had been established and was meeting, but it is my understanding that it is not. That is an interesting theoretical suggestion from the minister, but not one that we can actively take up.

On the issue of insourcing, I do not see that purely as an issue of procurement, although I have an amendment on procurement later, which will be considered by the committee at stage 2. If you look at the examples that I gave, I do not think that HMP Kilmarnock was subject to some kind of franchising or procurement exercise when it was decided to bring the prison back in-house. ScotRail and the Caledonian Sleeper service are other examples that the minister’s own Government has been prepared to implement. I recognise the point that the minister made in the stage 1 debate, about what procurement looks like, but I think that we should also be looking at insourcing versus outsourcing, not just in a procurement context. As I said, I have an amendment on procurement to come.

The final thing that I would say to the minister and committee members is that, if they have not already done so, they should visit some employee-owned businesses, such as, for Mr Fraser, Carlton Bingo in Dunfermline, which I went to. Carlton Bingo has bingo halls in Stirling and other places. Sarah Boyack and Lorna Slater would be interested in Jerba Campervans in the Lothians. For Mr Kerr, there is Clansman Dynamics in East Kilbride, which is part of the Central Scotland region. I am sure that the deputy convener, as well as Mr Kerr and I, will have an interest in Your Equipment Solutions in Falkirk. Then there is Auchrannie Resort in Arran. I look to Mr Coffey for that—although it is not in his constituency, it is employee owned and an important part of that regional economy. Let me finish with Mr Stewart. I can recommend the Krakatoa music bar venue on the quayside in Aberdeen as a fine example of an employee-owned business that really includes its workforce. Those are wonderful, pioneering businesses.

Yesterday, in the budget debate, the Cabinet Secretary for Finance and Local Government said:

“Scotland is a country of innovators and wealth creators.”—[Official Report, 13 January 2026; c 16.]

I think that those are great examples of innovation and wealth creation. I can think of no finer examples than those, and we should be using the bill to encourage the development and advancement of that part of our economy.

Amendment 61 is, again, an attempt to include Co-operative Development Scotland in the preparation of community wealth building action plans at a local level. I am concerned that its history, as well as its present and future, appears to have been written off. I think that it is an important part of the tools of economic development in Scotland. I know that it sits inside Scottish Enterprise, so I understand the minister’s argument that Scottish Enterprise will be consulted, ergo Co-operative Development Scotland will be consulted, but I am looking for something a little bit firmer than that to guarantee that that will be a dimension of the input from Scottish Enterprise and the enterprise network generally.

Amendment 65 is about having the local plan revised annually. Frankly, if the committee is not prepared to support the Scottish Government coming back to Parliament more than once every five years, it would be rather unfair to impose an annual regime on local government. I intend not to move amendment 65.

12:30

Thank you very much, convener.

What these amendments attempt to do is to promote and realise the potential of employee ownership in the economy. Instead of being quite so reliant on foreign direct investment, and instead of continuing to become more and more of a branch plant economy, we need to look at ways in which we can reintroduce more local and democratic forms of control. Employee ownership has been shown to be good for the retention and creation of jobs, and good for local and inclusive economic development, and it also cultivates longer-term thinking.

I have been an advocate of a Marcora-style law for some time. The Marcora law dates back to 1985, after Giovanni Marcora—a right-wing Italian politician, actually—introduced a statutory right for workers in Italy to be able to buy an enterprise that they worked in if it was facing closure or bankruptcy. It has since been amended to give those workers a preferential right—a right of first refusal—and it commutes their redundancy payments and three years’ worth of future unemployment benefits to help give them the capital to make the conversion. In turn, that is matched by the state on a one-to-one lira—and, more recently, euro—basis, and there is also support from co-operative federation funds.

Amendment 49 is an attempt to fashion that Marcora idea within our legislative competence here. In so doing, it would broaden the statutory right, so that it could apply not just in circumstances of bankruptcy or closure, but in the event of a business being up for sale; if the owner was, perhaps, looking for a succession plan, or if the business was the subject of a takeover or faced downsizing. In those circumstances, there would be a right for workers to make a bid to take the enterprise over. For me, this captures the spirit of the Land Reform (Scotland) Act 2003 and the Community Empowerment (Scotland) Act 2015 and brings them into the arena of industrial reform.