Finance secretary Kate Forbes admits 'severe challenges' over financial support for Scottish businesses

Scotland’s finance secretary has warned that even if every Scot looking for work found employment, there would still be shortages in the labour market.

Kate Forbes said her “stark” comment underlined how people who may have considered coming to the country to work are no longer doing so.

She said that without control over immigration, the Scottish Government was limited in what it could do to tackle the problem.

Addressing Holyrood’s economy and fair work committee on Wednesday, she also warned the government’s budget was “severely challenged” when it came to providing further assistance to businesses.

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Official figures published earlier this week showed onshore gross domestic product (GDP) fell by 0.2 per cent in July compared with the previous month, although over the three months to July, GDP is estimated to have grown by 3.4 per cent, compared with February to April.

Questioned by MSPs on Scotland’s economic recovery plans, Ms Forbes noted online vacancies are 33 per cent higher than they were in February last year.

She said it was vital to ensure young people, in particular, have the skills to take up employment.

But Ms Forbes pointed out: “Even if everybody who is currently looking for work is in work, there would still be shortages. The bottom line is – and you’re seeing the UK Government finally coming to a position of accepting that – is that as an economy, we have valued enormously people who have come to this country to work.

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Finance secretary Kate Forbes said that even if every Scot currently looking for work found employment, there would still be shortages in the labour market. Picture: Andrew Cowan/Scottish Parliament/Getty

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“What we’re seeing is that those people who might have considered coming here to work are no longer doing so. That might be because of high visa costs, it might be because they no longer feel welcome. There are all sorts of reasons.

“At the end of the day, whilst the Scottish Government can go out and say that they are welcome and we really need them, emigration has been the biggest problem in Scotland, not immigration.

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“We do not control the immigration policy and a number of businesses have come to me to ask for help and support on things like waiving visa costs, which is not within the Scottish Government’s control.”

Asked by the SNP’s Colin Beattie what policy levers the government had to alleviate supply chain problems and labour and skill shortages, Ms Forbes said they were “some of the most pressing issues” facing businesses, and potentially risked “hampering” the nation’s economic recovery if they are not resolved.

She said: “Where businesses need financial support or require to make investment in supply chains, then there are things we can consider, but our budget is severely challenged and, quite clearly, resolving issues in one area requires budget to be taken from another area.

“The financial efforts, I think, are quite limited when it comes to resolving supply chain or labour market shortages.”

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The meeting also heard criticism from Scottish Labour’s Colin Smyth of the “cluttered” business support landscape.

Colin Cook, the government’s director of economic development, admitted that problems remained.

“We very much recognise the charge that the landscape of business support remains cluttered,” he said.

“I think the agencies themselves accept that and, although they have made some really good progress in terms of joint working, all of them recognise there is more to do.”

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