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Good morning. You have discussed the desirability of the licensing scheme. One reason that you have given for that is that it would enable the fit and proper person test to be incorporated so that police concerns can be addressed. That is a fair point. Are you suggesting that the fit and proper person test cannot be part of a registration scheme?

I absolutely agree with the sentiments expressed by the cabinet secretary about the need to provide a system that protects the public, as far as we can. I will get to the nub of things, if I may, because I have made my remarks already, and I do not want to repeat them.

If we needed licensing simply because of the reasons that the police set out in their evidence to us, the regulations should have said that the licence will be granted unless there are good reasons not to grant it. One of those good reasons would have been that the applicant was not a fit and proper person on the basis of the police information. However, that is not what we are presented with. I made the point to the cabinet secretary that there are no criteria or rules; there is nothing to fetter the discretion of local authorities in their decision as to whether to grant or refuse a licence. I think that everyone would agree that, if a hoodlum, money launderer or drug dealer is laundering money through property—an issue that I think actually exists—there must be a means of dealing with that and he should not be given a licence to conduct such a business or any other businesses.

However, that is not what the regulations say. They do not delimit the discretion of local authorities to that particular issue. Moreover, I think that I have already proven, by reading out from the Scottish Government’s website, that the fit and proper person test does apply to a registration scheme. It applies to me, as a landlord, and rightly so. I am glad that it applies. Therefore, the case that we need a licensing scheme to deal with the police concerns seems to me not to have been made.

The second point that I want to make is this. Earlier, I alluded to concerns that, because the rules have not been specified and local authorities have unfettered discretion—paving the way for 31 different varieties of decision making, incidentally—businesses, many of which have operated for decades, may face the unilateral withdrawal and confiscation of their business by the decision of a local authority, which they cannot challenge on the basis of any clear rules.

Although I am no legal expert, I am aware of cases where the Scottish Government has failed because of breach of article 1 in the first protocol of the European Convention on Human Rights—namely, the provision that says that every natural person has the right to protection of their own possessions, except in the interest of public policy. If a clear public policy interest had been expressed in the regulations, that might have enabled the Government to say that it had acted reasonably. However, because there is none, it appears to me—although I am a non-expert—that there is a risk of arbitrariness, and the Wednesbury test, which I believe applies, seems to me to be at serious risk of being at issue.

I do not make that argument enthusiastically or lightly, but because I am genuinely concerned. I also point out that, as the cabinet secretary knows, the Association of Scotland’s Self-Caterers has already shared an opinion that it has had from an eminent firm of solicitors in Scotland. Although I have not seen the evidence myself, I have been informed that three other equally eminent firms of solicitors in Scotland have also opined on the issue. I stress that I have not seen whether it is their view that there is a prima facie breach and that judicial review might therefore be successful.

I put this to the cabinet secretary and to committee members as a matter of common sense. If there is a system in which someone’s property can be taken away and their business terminated, there should surely be a very clear set of rules to govern in what circumstances that can happen. It is all very well to say that the fears that have been raised are alarmist or scaremongering, but what are people to think if there is no clear set of rules in the regulations? Moreover, if there is the possibility of a licence being withdrawn but the licensing system can take several years to operate, there will be a long period of uncertainty between the application for the licence and the determination. What happens to bookings and cancellations during that period? What happens to the business if the licence is refused? None of that has been answered.

There are many other arguments that I could put, but I think that I have said enough to indicate that I am not a fan of the order. I say to the cabinet secretary that it is never too late to look at this again. If the order is passed today, as I suspect it will be, I hope that the cabinet secretary will—as she has promised—engage with the sector before the order comes to a plenary session in order to look further at the real concerns and at the real, serious and sincere alternative proposals. Such proposals, including the exemplar from Portugal, operate in Europe and are favoured by the EU.

I hear what you say and I understand the sincerity behind those thoughts. I think that it is fair to say that larger lets in the self-catering sector in particular have hardly had any [Inaudible.] Covid rules, quite correctly, so they have had a tough time over the past wee while, and uncertainty remains for the whole sector.

My point is that registration is what the sector proposed. It denies that there was consultation in 2019. Incidentally, it also maintains that it proposed a fit and proper person test—I just place that on the record. I was able to attend the meeting two weeks ago, when what we heard was that the whole short-term let sector is united in favour of a registration scheme. The sector has support from the Federation of Small Businesses, Scottish Land & Estates, Scottish Agritourism and the NFU Scotland, as well as all the short-term let organisations.

Several of those bodies left the short-term lets stakeholder working group because they felt that it was—I will not mince my words—a sham and that it was not addressing their concerns in any way. Recently, as the cabinet secretary will know, the Highland Council voted in favour of registration, not licensing.

I am grateful, convener, for the opportunity to ask these questions today, because it is essential for my constituency and the Highlands and Islands, in particular.

My last question for the cabinet secretary is this. When we will have such a draconian power of the state, via local authorities, to terminate businesses, is not it a serious failing of regulation that there are no set clear rules or criteria that govern how such crucial decisions should be taken? I have searched in vain among the regulations to see what criteria local authorities must follow; there are no criteria whatsoever.

Last week, someone who spoke on behalf of the Association of Local Authority Chief Housing Officers said in evidence that

“we need to simply select those”

businesses

“that can no longer operate”—[Official Report, Local Government, Housing and Planning Committee, 14 December 2021; c 6.].

To be told by a senior figure who was speaking on behalf of the local authority family that some businesses must be selected for closure before the regulations have even come into force must surely strike fear into the hearts of businesses.

There must be a judicial review on the grounds of irrationality, arbitrariness and the lack of a clear set of rules. It is not too late for the Scottish Government to reconsider a registration scheme that would deal with the fit and proper person test, as the registration scheme for longer-term letting of residential properties does. We have seen such reconsideration with one or two other schemes, including the named person scheme.

The public generally appreciates our accepting that we got it wrong. Surely, the licensing scheme is too draconian and unfair and there is no set of rules. There will now be a period of division, difficulty and anxiety among tens of thousands of law-abiding small businesses that have done nothing to deserve the threat that is now being held over them.

Thank you, Frank and Katie, for your answers. I recognise everything you have said from previous discussions. They are very practical issues, so I will not repeat them.

I agree entirely with the analysis and the points that you have made; they are all very reasonable. I do feel, however, that the shared apprenticeship is a model that has not yet been cracked but could be. I wonder whether it might be worth your engaging further with small business representatives—both generic ones, such as the Federation of Small Businesses, and particular trade associations, such as the Scottish and Northern Ireland Plumbing Employers’ Federation. They are often very well informed about the details and they have a lot to offer in terms of being practical and driving things forward.

I accept that we have to look at the interests of young people as well as those of employers, quite obviously, and what Frank Mitchell said about using digital platforms instead of kids having to travel 100 miles to a classroom must surely happen. If we have learned anything from the pandemic, it is that.

Convener, I will finish by asking for two things for after this meeting. Could SDS provide us with some statistics about the performance in rural and small business in so far as it is able to? I appreciate that the compilation of statistics involves classification and definition, but we need a picture of what is happening in rural and small businesses, particularly as we are a small business country.

Finally, I want to make a specific plug. There is a pre-apprenticeship scheme involving training for young people through an organisation called Ringlink, which is a farming machinery and labour co-operative operating in the north-east and elsewhere in Scotland. As Frank Mitchell knows, Ringlink set up an excellent scheme for young people that provides a great model whereby groups of farmers provide training for a host of young people. The model is to be rolled out throughout Scotland. Ringlink was funded on a pilot basis until 2021, and I am keen to see that funding continued and mainstreamed by SDS. I did not raise this with the witnesses previously, so I would not expect them to answer questions about it now—I never like to ambush anybody, do I?—but perhaps they could take both of those questions away and get back to us.

Not at all, convener.

Good morning. I want to start off by thanking our witnesses for all the terrific work that they, their members and their colleagues do throughout Scotland. Over the years, I have seen countless examples, not only in the University of the Highland and Islands and the forestry college in Balloch, in my patch, but throughout the country. As some of you know, I have been involved in a number of matters, in a different capacity, over the years.

The material that SDS submitted is illustrative of a very positive story, not just among universities and colleges, many of which are world leading, but in the scale of apprenticeships. As Frank Mitchell well knows, the number of apprentices increased from 10,579 in 2008-09 to 29,000 10 years later. A threefold increase in 10 years is a tremendous success. On top of that, of course, the pandemic has brought unprecedented challenges. I wanted to preface my remarks on what is a huge topic with that general comment.

I want to address two issues. These are primarily questions for Frank Mitchell, although, of course, others can chip in if they wish to. From what I have seen over 22 years in this institution, the needs of rural Scotland and of small businesses are quite difficult to accommodate when it comes to skills and training in general, for logistical and practical reasons to do with distance and scale. Small businesses do not have a human resources department, they tend to be extremely busy just doing their work and they might comprise only two or three people. However, such businesses could have shared apprenticeships. Is work being done to develop shared apprenticeships?

Secondly, in relation to rural Scotland, do you agree that more needs to be done? Is SDS committed to doing more in that area? How is the rural skills action plan, which was launched not that long ago, faring in meeting the potential of young people, in particular, in rural areas?

As I said, those questions are primarily for Frank Mitchell—it is good to see you again, Frank. I think that you have heard me say all that quite a few times before.

Good morning to the witnesses, and thank you for joining us today. The written submissions that we have received indicate that, following the effects of the pandemic, in order to help us to achieve a common economic recovery, business wishes, rightly, to focus on areas where there has been especial damage. Tourism and retail have been mentioned, although there are others. I agree with and welcome the wish for that focus. In particular, Leon Thompson will be aware of the work that the tourism task force has completed, which looked at specific measures that involve particular universities, colleges and establishments with a distinguished track record—for example, in tourism. In the evidence from our retail colleagues, I was slightly concerned to see that the number of apprentices in retail has reduced over recent years.

To supplement their written submissions, I would like the witnesses to provide us with a prognosis and a set of measures that they wish to see in place, and I would like them to be as specific as possible instead of generally saying that we should do more. What, in particular, should that “more” be? Who should provide it?

Having been in a driving seat of sorts, as a minister for 14 years, I am acutely aware that those are complex matters and that it is difficult to deliver objectives into reality. Nevertheless, some very positive, specific, prescriptive suggestions about how we can help younger people, in particular, and how money should be focused on areas such as tourism and retail would be very welcome. My questions go to both witnesses.

Secondly, is it the case that what we are doing here will, in effect, bring Scotland into line with England, which will mean that the same hurdles and time provisions apply?

Thank you, minister.

Both witnesses have provided positive suggestions, which we should pursue afterwards, convener. There is no doubt that we can discuss that. We have some pretty concrete pointers in the right direction.

I have a small supplementary question for Paul Mitchell. Is there a concern in the construction sector that, generally, there is a shortage of skilled labour in many of the trades that are essential to pursue construction projects? Do you agree with me, as someone who represents a largely rural constituency, that the shortage of available contractors means that it is difficult to get competitive prices for projects, which has led to price inflation in many projects in the public and private sectors? Do you consider that, as part of the solution to those issues, we need to take up the suggestions that you have made to ensure that there is a larger stream of young people in rural and urban Scotland going into the construction sector to carry out the work that we all believe is necessary for schools, roads, hospitals, railways and private sector projects?

I endorse what Ross Greer has just said and have a couple of points to add. My understanding of the officials’ response is that, if the regulations are passed, there will be no change to the test that is applied, which protects the public from those who have committed more serious offences. There will be no change at all.

The only alteration is that people will be allowed to make an application at an earlier age. An application that would be refused would also be refused when they are younger. Any suggestion that there is an increased risk is nothing short of scaremongering. I am sure that no one would wish to do that. It is particularly disappointing to hear those arguments when we have already heard that one of the benefits will be a consistency of approach throughout the UK. That means that children who succeed in an application that is made in Scotland would be able to move south to take up advantages there, and vice versa. There may be practical benefits. For those reasons, I will vote against the motion to annul.