On Friday, July 31 st – that's 3 days from now – the advanced deepwater drill ship Maersk Venturer will set sail for Otto Energy's (ASX:OEL) SC55 Block offshore the Philippines – and one to two days after it arrives, it will spud the Hawkeye-1 well .
Hawkeye-1 is targeting oil below a gas cap with a medium success case of 112 million barrels of oil – around 74 million barrels net to OEL's 78% interest.
With the price of oil in a temporary down cycle, most Australian oil and gas explorers are bunkering down. Not OEL – it's taking full advantage of the discount drilling prices available right now.
Hawkeye-1 is estimated to cost between $30M and $35M, almost half the usual high price!
And with former JV partner BHP Billiton kicking in $24.5M, and Red Emperor Resources (AIM; ASX : RMP) dishing in around $6M, OEL is fully funded for this event, further enhancing any upside upon success.
An independent assessment by Jordan & Pay Exploration Consultants gives Hawkeye-1 a 32% chance of success – or one in three.
But even if no oil is found, there is the possibility of finding gas and confirming a working hydrocarbon system that OEL can continue to explore.
The Hawkeye-1 well could be the key that unlocks them all – and it starts in less than a week.
And to make things even sweeter for OEL investors, the company has just paid out a share of the $108M it made from selling its stake in the producing Galoc field offshore the Philippines.
Even after this capital return, there should still be US$43-45M in the company's kitty – enough cash to fully fund the next two years of planned exploration activities across its current assets.
Plus, OEL has just entered Alaska's prolific North Slope oil producing region, snapping up a share of two highly prospective areas that are set to have two wells sunk into them.
This means OEL now has long-term onshore oil interests in global hot spots Alaska and Tanzania, combined with imminent offshore action in the Philippines – a compelling mix of long and short-term catalysts.
Right now though, all eyes are on OEL's imminent drilling event at Hawkeye-1.
Otto Energy (ASX:OEL) has been on The Next Oil Rush's radar since May 2015 when we published Weeks Away From Free Carried Offshore Drilling: ASX Company's Potential Play Opener .
This Friday, the Venturer should set sail from the Malaysian port of Labuan and head to OEL's SC55 Block offshore the Philippines.
One to two days later, the spudding of Hawkeye-1 will commence, with a very quick time frame estimated at 23 days from spud to the release of the rig.
We won't have to wait long for results.
Venturer's drill bit will plunge down 1,700m to the mudline, then go 1,000m further to reach the beginning of the target structure below the gas cap within 15 days of spudding – will it be oil?
OEL should release weekly drilling updates for the estimated 23 day drilling event and any material hydrocarbon shows could be announced to the market immediately.
With a one in three chance of hitting a play opening oil resource, the time is now for OEL. Of course the flip side is that this well has a 2 in 3 chance of geological failure – i.e. no commercial oil and gas is struck – so it's by no means a guarantee.
You'd normally pay top dollar for a vessel like this, somewhere in the region of $600,000 a day with a well cost of around $50M.
But OEL and its JV partners are getting full use of the Venturer for cheap, paying somewhere between $US30M and $US35M for the total cost of the well – nearly half of what they would have paid when oil was at $100 a barrel.
And this low cost edge for a well going after 112MMbbl is turning a lot of heads OEL's way.
And stockbrokers Hartleys agrees, reported as naming OEL as one of their 'favourite oil and gas names' for its strong cash position and the potential of the Hawkeye-1 well.
Best of all for OEL, it's fully funded for the drilling of Hawkeye-1.
Former JV partner BHP Billiton is contributing $24.5M as part of a deal done when it pulled out of the Philippines and handed back its 60% interest to OEL in 2014. Plus, JV partner RMP is paying close to $6M for its 15% share.
And there's potential for even more farm-out deals – OEL is negotiating with Pryce Corporation, listed on the Philippines Stock Exchange, to take a 10% working interest in the SC55 Block and the Hawkeye-1 well.
There's also an Expression of Interest from the Philippines National Oil Company (PNOC-EC) to take a 15% stake as well.
Hawkeye-1 is targeting a hydrocarbon system that 3D seismic appears to show as a gas cap covering a potential pocket of oil.
Up for grabs is a best estimate of 112 million barrels of oil gross with around 74 million barrels net to OEL at its present 78% interest.
Hawkeye-1 lies at a depth of 1,788m and detailed 3D seismic imagery shows a flat spot in amplitude on all datasets consistent with a gas contact at 2,750m.
Bright amplitudes down dip are consistent with structural contours on the western side, and modelling concludes that these deeper amplitudes are either an oil leg below the gas cap or low saturation gas caused by leakage.
The very top of the structure is 1,000m below the mud-line, so it's going to be pretty straightforward drilling.
OEL could hit the oil pocket within a fortnight of spudding – so we may get a positive sign of oil very quickly.
And the blue sky Hawkeye-1 could clear is very compelling.
OEL's SC55 Block covers 9,880km2 in the middle of an oil and gas fairway stretching from Borneo to the Philippines and on to the South China Sea.
And the Southwest Palawan Basin where Block SC55 sits is an underexplored, undeveloped oil and gas frontier that Hawkeye-1 could unlock upon success.
OEL's next target will likely be the Cinco Prospect, which has a best estimate prospective resource of 1.6tcf of recoverable gas.
If Hawkeye-1 hits oil and gas, it will prove that a hydrocarbon system is present at SC55 and that significantly de-risks Cinco.
And along trend, OEL has identified a further eight prospects that it could drill in the future with a best estimate prospective resource of over 17tcf.
So Hawkeye-1 could just be the beginning for OEL's offshore Philippines ambitions, and we can't wait for the show to start.
It's a good time to be an OEL shareholder, with an imminent drilling event getting closer every day, and the recent capital return completed.
A capital return of A$0.0564 per share with a unfranked Special Dividend of $0.0076 paid simultaneously.
This generous capital return was made possible after OEL divested its 33% share in the producing Galoc oil field for US$108M .
Galoc is an offshore play in the northwest Palawan Basin – the opposite end of the pool to the Hawkeye Prospect in the northwest that holds 10MMbbl in proven reserves and 23.5MMbbl in proven and probable reserves.
Now the deal is done and the money is in the bank, OEL decided to reward its shareholders in the lead up to its new drilling event at Hawkeye-1. The company received approval from the Australian Tax Office to do it.
At The Next Oil Rush , we see this as a reward for loyalty timed just right – OEL is about to drill for offshore oil at Hawkeye-1 and by giving its investors a taste of the sale of Galoc, it primes for the upside that SC55 could bring soon.
OEL has just become a 'three-legged stool' with three potential sources of income from three oil and gas projects in three nations.
The first two we are all familiar with – the imminent drilling offshore the Philippines at SC55 and OEL's 50% stake in the Pangani and Kilosa-Kilombero exploration projects onshore Tanzania.
OEL is moving to acquire an interest in a highly prospective exploration acreage on Alaska's prolific North Slope, which has produced more than 17 billion barrels of oil and 13 trillion cubic feet of natural gas so far.
And the US Geological Society estimates there is still over 40 billion barrels of oil and over 200 trillion cubic feet of gas still up for grabs.
OEL is taking an 8% and 10.8% interest in two areas of an acreage owned and operated by Great Bear Petroleum , a privately held concern that's going after conventional oil targets right now with a three well drilling programme .
Great Bear's acreage is right next door to another of The Next Oil Rush's investments, 88 Energy Limited (ASX; AIM :88E), which itself is fast tracking a drilling programme for an 8 billion barrel potential target. You can read all the latest on OEL's Alaskan neighbour in our recent article Oil Explorer Accelerates Alaskan Play as Repsol Reports Discovery Nearby .
The North Slope is seeing a renaissance of oil and gas exploration after Alaska's government introduced tax rebates and incentives of up to 85% to get oil companies drilling again – BP, Respol, Shell, eni and ConocoPhillips are all in the hunt now.
The picture above is of Great Bear's vast acreage on the North Slope – 558,195 net acres immediately south of the massive 25 billion barrel Prudhoe Bay field and adjacent to the 5.9 billion barrel Kuparak field.
OEL has signed a Letter of Intent with a company called Borealis Petroleum Pty Ltd to earn through staged capital injections an 8% and 10.8% interest in two areas of Great Bear's acreage.
Borealis is in the process of raising $8M, of which OEL will contribute $4M giving it a 40% share of the company.
Borealis will secure the acreage share from Great Bear, and OEL will participate in 2 oil discovery appraisal wells and 1 exploration well on 2015/16.
There's also the option to secure an interest in Great Bear's Alkaid-1 well , which is being drilled this year – results are due out soon – and also its upcoming drilling of a prospect called Phecda.
The big picture for OEL is that Great Bear's acreage is a target rich environment – it's spent over $150M so far shooting 3D seismic, drilling unconventional stratigraphic test wells like Talitha-2 and identifying prospects like Phecda.
Great Bear's acreage lies within established conventional oil fairways including Ivishak, Kuparak and Brookian plays that feed the prolific Kuparak and Prudhoe Bay fields, making Great Bear's acrage highly prospective.
In addition, there is unconventional prospectivity in the Kublik, Kingak and Hue/HRZ shales, all of which are present within Great Bear's boundaries.
There's so much prospectivity that oil giant Halliburton has farmed in for a 25% stake into a portion of Great Bear's acreage, which is serviced by the all weather Dalton highway and the Trans Alaska Pipeline System (TAPS).
Once this deal is sealed OEL will be in a prime position to participate in the upcoming drilling events Great Bear has on the cards – 2 appraisal and 1 exploration wells in 2015/16 targeting conventional resources.
At The Next Oil Rush we see this as a strategic investment for OEL. For a relatively small investment of $4M it gets to add Alaska's North Slope to its project portfolio and participate in at least 3 drilling events in a prolific region.
We are now counting down the days – this Friday, July 31 st is the date set for the Maersk Venturer ultra deepwater drill ship to set sail for OEL's Hawkeye-1 prospect offshore the Philippines.
Once on station, the ship will take one to two days to commence operations and spud the well.
Then the drill will plunge 1,700m to the sea floor, burrow past the mudline and reaching the top of the target structure – a pocket of oil below a gas cap – penetrating it within an estimated 15 days.
Hawkeye-1 is targeting 112 million barrels of oil with around 74 million net to OEL upon success.
And well costs are cheap – between $30M and $35M, around half of what it would have cost when the price of oil was high.
OEL is taking full advantage of the low price of oil to get bargain basement well costs and go after a significant resource that could unlock a new oil and gas frontier offshore the Philippines.
It's show time for OEL, with a one in three chance of success for oil, and a high chance for gas regardless.


THE POSITION OF ATTESTED MEN.
§ LORD STRACHIE rose to call the attention of the Government to the decision of the Lord Chief justice that men enlisted under the Derby Scheme did not come under the Military Service Act, 1916.
§ The noble Lord said: My Lords, I desire to call attention to the decision in the King's Bench Division in the case of Rex v. Huntingdon Appeal Tribunal ex perte Mann. I do so in order to bring to the notice of the House the inequalities under which the voluntarily attested man suffers in comparison with the conscripted man. This particular case has nothing to do with the conscientious objector; if it had, I should be the last member of your Lordships' House to refer to it. This is the case of a tenant farmer who applied for total exemption; the appeal was dismissed, and he was granted simply one month's exemption. If that man had been a conscript and not under the Derby Scheme, even if he had only been given five days' postponement, he would have got not one month but two months.
§ It is very undesirable that these cases should continually happen, showing that under the Act conscripted men are in a better position than those who enlisted voluntarily under the Derby Scheme, whereas those who advocated that scheme gave, as one of the reasons why men should join under it, not only patriotism, but also that they would be in a very much better position if the Government ever made up their minds to have conscription generally. We have not only got the case of the unmarried man, but we shall have in the near future the case of the married man, Who will also be put in a much worse position if he has attested than the married man who did not.
§ The Lord Chief Justice said that the applicant had enlisted under the Derby Scheme and did not come under the Military Service Act, 1916. The material part of the judgment is at the end, where the Lord Chief Justice said— It was contended that the Appeal Tribunal had no power to do what it did, and was functus officio. 938 In his view that contention was wrong. It could not be said to be functus officio, because it was not a Tribunal at all in the strict sense. No doubt the military authorities would follow its advice, though they were not bound to do so. It followed that in the case of an attested man the Court could not grant the mandamus. It was right to point out that the Tribunals instituted under the Military Service Act, 1916, were in a totally different position, because they were appointed in virtue of the Statute, and were therefore a statutory body which would come under the jurisdiction of the Court. The rule would be refused. It will be very hard indeed on those men who have come forward for patriotic reasons, first of all the unmarried men and then the married men, if the Government do not put some provision in the Bill now before another place giving equal rights for the voluntarily attested man to appeal and to get a mandamus if the Court is satisfied that his case is good. From the decision of the Lord Chief Justice, which was agreed to by the other Judge sitting with him, these Tribunals practically have no power at all, and only the military representatives and the military authorities have any real rights in the matter. I cannot help thinking under the present condition of things, when we are rapidly approaching general conscription and all men who have not voluntarily attested will be placed under the Conscription Act, that it is very undesirable that there should be this inequality. I consider that those married men who attested should have equal rights of appeal to those who did not attest, and it would be a mere act of justice on the part of the Government to bring this about.
My Lords, when the new scheme of recruiting was instituted in the autumn of last year under the direction of Lord Derby it was arranged that men on attestation should not be called directly to the Colours but should be passed to the Army Reserve, to be called to the Colours in groups according to their age and marital condition. As part of the administrative machinery of the scheme, it was arranged that Tribunals should be established throughout the country before which a man whose patriotism prompted him to attest could state his case if he considered that his private circumstances or his occupation made it right or desirable that he should be allowed to continue for the time being in civil life. The War Office agreed to abide by the decisions of these Tribunals, subject to the right of appeal to a central body, but this was merely an administrative arrangement 939 without legal sanction. By the act of attestation a man became a soldier. Whatever the decision of the Local Tribunal may be, he remains a soldier; but in practice the War Office have agreed not to call him up for service unless or until, in the opinion of his peers, as represented by the Local Tribunal, it is desirable that he should be called up. Other arrangements were made with regard to special classes of men—for example, Civil Servants, men in what were known as "reserved occupations," skilled munition workers, coal miners, and so forth—under which the War Office agreed to accept the decision of some other person or body or Department on the question of whether the attested man should be called to the Colours or should be allowed to remain in the Reserve and continue in his civil vocation. But here, again, there was no legal sanction, and the attested man, therefore, has no redress at law if he is dissatisfied with the decision of the person, body, or Department authorised to determine the question.
When the Military Service Act was passed the system of the Tribunals was adopted for its purposes; but with this difference, that the Tribunal under the Military Service Act was a statutory body authorised by law to determine whether a man was to become a soldier at all or to remain a civilian in law and in fact entirely removed from the operation of the Act. It was felt, however, that so far as was possible the Derby recruit should be in no worse a position than a man to whom the Military Service Act applied, and instructions to Tribunals were, with the consent of the War Office, drawn up to correspond as closely as possible with the Regulations under the Military Service Act.
The Tribunals under the Military Service Act determine the question of whether a man is to become in law and in fact a soldier. The same bodies, in dealing with cases of attested men, decide whether a man who is technically a soldier as from the date of attestation shall be called up for service with the Colours, the War Office having agreed to abide by their decision, subject to the right of appeal by either party to an Appeal Tribunal and to the Central Tribunal if the Appeal Tribunal consent. The noble Lord will see that the two cases are dissimilar. The compelled man under the Military Service Act is forced to be a soldier. The attested man must be supposed to be willing to be a soldier and to be 940 willing to place his claim for exemption, if he has one, before the Tribunal for arbitrament.
My point was whether the Government had any intention of putting the attested man in as good a position as the conscript, because it is quite clear, from the decision of the Court, the attested man is not in as good a position now.
Back to TREATMENT OF CONSCIENTIOUS OBJECTORS.
Forward to THE ARREST OF SIR ROGER CASEMENT.


The U.S. military has increased the threat level at bases across North America.
It means citizens will see more random bag and vehicle checks in the coming weeks and 'heightened vigilance' at airports.
Though officials insist there is no specific threat to the nation, Army Col Steve Warren conceded the recent shoot-out at an anti-Muslim cartoon contest in Texas contributed to the decision.
Elton Simpson and his roommate Nadir Soofi, both from Phoenix, opened fire outside the Texas event center on Sunday as attendees drew the prophet Muhammad - an activity condemned by the Koran.
Simpson and Soofi were shot dead before they were able to kill anyone.
It has since emerged the FBI tried to warn local police three hours before that Simpson was planning to strike the event but nothing was done to stop them.
Although Pamela Geller, who organized the controversial event, claims she has no regrets about it, FBI director James Comey warned Americans must be alive to the rising number of citizens that subscribe to extremist ideologies.
Speaking to journalists on Thursday, Comey said 'hundreds maybe thousands' of Americans are being groomed by the Middle Eastern group the Islamic State.
Army Col. Steve Warren says the increase in security levels was due to a generally heightened threat environment across the United States.
The alert level was approved by Adm. Bill Gortney, head of U.S. Northern Command.
The nationwide baseline level of security has increased from A to B. The highest level is D.
Though most military installations - including the Pentagon - were already at a slightly higher level of protection than A, it is a significant leap as a national default.


Christmas has already crept up throughout Japan's cities and shopping malls, and everyone is getting prepared for the most festive season. If you've been here a while, you may already know that Christmas is a strange season here in Japan– Feeling familiar and completely foreign all at the same time! Japan has imported a lot of the West's favorite Christmas traditions, and putting a uniquely Japanese twist on it!
Is it your first Christmas season in Japan? Here's how to get the most out of the season, and enjoy all the fun festivities that Japan has to offer.
The Christmas lights (often called illumination) in Japan are certainly amazing! Large shopping malls, and city areas light up spectacular displays that draw thousands of visitors each year. There is nothing more festive or gets you more in the spirit than walking down a street lit up by thousands of twinkling lights.
Popular shopping streets in Omotesando, Roppongi, and Ginza light up their streets with beautiful displays, and lights will be everywhere! Do some shopping, grab a hot coffee, and take a nice stroll through the beautiful displays.
Featuring over 600,000 blue LED lights, Shibuya Blue Cave is a can't miss display held in Yoyogi Park from 30 November – 31 December 2018.
One of Tokyo's most popular light displays, held at the iconic Tokyo Tower! Tokyo Tower's Winter Fantasy is celebrating it's 60th anniversary in 2018, and to celebrate the illumination's centerpiece is a 11-meter 60-year old living fir Christmas tree! This is a can't miss event held from 2 November 2018 – 28 February 2019.
Million's of jewell-colored lights take over Yomiuri Land in this annual event! The whole park is lit up, in 8 spectacular areas. This is a can't miss evening out this winter! Held in Yomiuri Land from 11 October 2018 – 17 February 2019.
2: Eat some Fast Food!
Fast food? On Christmas? Yes!
Did you know it's traditional to eat pizza and fried chicken on Christmas in Japan? Started from a genius marketing campaign in the 1970s by Kentucky Fried Chicken, fast food (especially fried chicken!) has been an important Christmas tradition in Japan ever since.
Fast food chains offer special Christmas sets and party packs all throughout the season. People line up for hours Christmas day for their fried-chicken bucket, and Kentucky Fried Chicken has been known to sell out well in advance– So it's recommended you place your Christmas Day order weeks in advance!
Typically, if you aren't a child you won't be getting many Christmas presents in Japan. Couples will exchange small presents, but gift-exchanges between friends and family usually come with the New Year.
Even though gift-exchanges aren't as common as in the West, shopping malls take full advantage of the season! Malls are decorated with beautiful decorations and illumination, and shops put out exclusive Christmas merchandise. Not to mention, sales!
Pick up a few things for your friends and family, and treat yourself to a year-end gift!
If you can only go to Tokyo Disney Parks one time this year– make it Christmas time. The Christmas celebrations at Tokyo Disney Parks go all out! Seasonal parades, shows, decorations, food and merchandise– It's a can't miss event!
Disneyland and Disney Sea are even more crowded than usual this time of year, so this is a great season to utilize the Starlight Passport and enjoy a great evening out.
Starting in mid-November, Bavarian-style Christmas markets pop up all over Tokyo. Check out the markets and enjoy some traditional holiday decorations, unique gifts, and great food and drink.
Christmas markets are a favorite Christmas tradition for me and my family– I've found that they're one of the only places in Tokyo to have a glass of mulled wine!
Held at Roppongi Hills Oyane Plaza every year is Tokyo's oldest Christmas market! Make a day of it by shopping, checking out the market and viewing Roppongi's famous illumination. Held from 23 November 2018 – 25 December 2018.
My personal favorite Christmas market– The Yokohama Red Brick Warehouse Christmas market is a can't-miss event! The iconic Red Brick Warehouse makes the perfect backdrop to a beautiful Christmas market. Enjoy ice skating, food and drink, and tons of unique crafts and gifts. Held from 23 November 2018 – 25 December 2018.
The only Christmas market in Japan with the backing of the German embassy and German Tourism Association, the Tokyo Christmas Market can't be beat! Featuring a huge Christmas pyramid, and a live choir in the evenings, visiting Tokyo Christmas Market is guaranteed to be a great evening out. Held in Hibiya park from 14 December t0 25 December 2018.
3 Best Gifts for Christmas!


text:
The Deputy Presiding Officer (Linda Fabiani)
The next item of business is a debate on motion S5M-15507, in the name of Kate Forbes, on supporting entrepreneurship. [Interruption.] I ask members who are leaving the chamber to do so quietly, please. My goodness! I will say no more. I call Kate Forbes to speak to and move the motion.
The Minister for Public Finance and Digital Economy (Kate Forbes)
The Government and I, as the Minister for Public Finance and Digital Economy, have made it clear that our ambition and vision is for the nation of Scotland to be at the forefront of economic and technological development. That means that we must be the inventors and producers of future innovations, not just consumers. We know that Scotland's people have more than enough potential to be world leading in many fields.
We are all very familiar with the names of the innovators and entrepreneurs of our past, such as Bell, Fleming and Carnegie. More recently, names such as Farmer, Gloag and Hunter have come to the fore. The Government agrees with Sir Tom Hunter that we must work together to ensure that our best days are ahead of us and that enterprise plays a positive role for all society.
Of course, that will be no mean feat, but there is another generation that is coming through with the ideas, the initiative and the guts just to give it a go, and I absolutely believe that we can accomplish it and achieve our vision if we work together. It is no wonder, then, that our approach is based on working with partners to nurture our existing entrepreneurial talent as well as creating the conditions that attract international talent. On that note, I am startled by the way in which the Conservative amendment talks about attractiveness, given that the party has in recent weeks—and, indeed, years—been lambasted for single-handedly not just turning people off coming to this country but actively restricting them from entering.
The Scotland can do approach embodies our strategy, because in sharp contrast to the small-minded and self-obsessed approach that I have outlined and what, in the words of some business organisations, is misleading rhetoric on immigration, this Government is actively supporting home talent as well as attracting people to move to this country. The Scotland can do platform, which we have developed with our public, private and third sector partners, represents our shared ambition to become world leading in entrepreneurship and innovation.
Make no mistake—Scotland can do is paying off. Since its introduction in 2013, the effectiveness of Scotland's business support environment has risen from 13th to fifth in the world, ahead of all other parts of the United Kingdom. However, I do not think that that is enough—we need to go further. That collaboration, which champions an approach in which sustainable growth and innovation go hand in hand with the wider benefits to all society, is the foundation that we must continue to build on.
Daniel Johnson (Edinburgh Southern) (Lab)
In many ways, the minister is absolutely right, but how do the remarks that she has just made square with the fact that funding for Scottish Enterprise has declined by more than a quarter since her party came to power?
Kate Forbes
We have made it clear that support for business lies at the very heart of this year's draft budget, and in our support for our enterprise agencies—which, of course, include Highlands and Islands Enterprise as well as Scottish Enterprise—we have treated them fairly and consistently. At the heart of the issue, however, are the output and the benefit to the business community, and the statistics that I have just quoted on the business support environment—and which I should point out are not mine—showing that Scotland has risen from 13th to fifth in the world, ahead of all other parts of the UK, indicate that we must look at the support that businesses are telling us that they need and ensure that that support is not piecemeal but of the type that business wants.
Where we have applied a focus and prioritised matters such as tackling the gender gap or ensuring that our young people see enterprising activity as the norm, the results have been positive. I think that a very important point in the Labour amendment is its recognition of the importance of women in enterprise to ensure that the growth that I have talked about is, indeed, inclusive. Although the proportion of women actively starting a business has risen significantly since the establishment of the women in enterprise action framework, we clearly have more to do to ensure that we leave nobody behind.
Elaine Smith (Central Scotland) (Lab)
Although I recognise what the minister has said, I think that, at this stage, we should also point out that, according to the statistics, less than a quarter of new businesses in Scotland are being established by women.
I appreciate and do not disagree with that point. If we were able to encourage more women to be in a position to start a business, the value to the Scottish economy would be enormous. Making sure that inclusivity lies at the heart of our entrepreneurship agenda is good not just for entrepreneurs but for the Scottish economy as a whole. We recognise that values and diversity must lie at the heart of our can do philosophy.
Organisations such as the Scottish Chambers of Commerce and the Federation of Small Businesses have made enormous contributions to those shared outcomes, and Young Enterprise Scotland and the Prince's Trust have driven action. As for the gender gap, which I have already mentioned, Women's Enterprise Scotland and Investing Women are tackling some of the challenges around the statistics that Elaine Smith highlighted. In fact, so many partners are responsible for driving that impact that to name them all and their contributions would leave us little time for the debate.
However, one partner that deserves specific recognition is Entrepreneurial Scotland, which is a network of and for Scotland's entrepreneurs and is at the very heart of what the Scottish Government is trying to achieve. At the weekend, I met Rachel Wallace, who works for Entrepreneurial Scotland, to ask her, aside from any briefings that I might receive, what impact she sees the network having on the business that she is trying to support. The entrepreneurial drive that I could see in Rachel herself was very clear: being able to come alongside businesses and support them in a way that they ask for, rather than one that the Government wants to provide, is really making a difference.
I touched briefly on values, which have to be at the heart of our approach. Time and time again, the Scottish Government has stated its commitment to economic growth that must be inclusive, and that businesses that do good are much more likely to be successful and resilient. From the social enterprise strategy to the Scottish business pledge and our commitment to being a fair work nation, we have made clear our position.
Dean Lockhart (Mid Scotland and Fife) (Con)
The minister mentioned inclusive growth. The Economy, Energy and Fair Work Committee recently heard that the Government has no agreed definition of that term. When will it be able to tell the various agencies that are involved in the economy what it means by the term?
I recall my colleague asking Dean Lockhart which strategy he thought the Scottish Government could leave behind, and his citing inclusive growth—which, of course, we would never do.
On that subject, it is quite clear that we should ensure that anybody who wants to access the workforce and be an entrepreneur is able to do so and that there is a level playing field. On the other hand, we must ensure that the outcomes of the growth that we then see in the economy benefit everybody and that we do not see a continuation of the gap between rich and poor that some of Dean Lockhart's colleagues in the Westminster Government seem intent on making bigger. That means growth for more than its own sake. It means growth in which positive social, environmental and community outcomes are a natural consideration—not an afterthought, a convenient side effect or a nice subject for debate in the Parliament—and in which everybody is empowered to participate and from which everybody can benefit. In itself, that sentence is quite a neat definition.
Dean Lockhart rose—
The Deputy Presiding Officer
The minister is in her last minute. In fact, she is just winding up.
Thank you, Presiding Officer. I have been having far too much fun taking interventions, so I will now rush to the end of my speech.
We are all aware—and I am sure that we will have a very interesting debate on the matter—that approaching headwinds will inevitably impact on the ability of business to thrive. Just yesterday, the Confederation of British Industry published what I will call—for want of a better description—scary figures on the impact on the Scottish economy of a no-deal Brexit. Such headwinds have been caused not by Scotland's businesses but by decisions made elsewhere. More than ever, that underlines why we must work with our partners in business, listen to them and ensure that our support is right. That is the essence of our approach, and that is the reason for its success.
I move,
That the Parliament recognises the successes of Scotland's entrepreneurial businesses and the potential of all of Scotland's people; welcomes the collaborative approach to increasing and supporting entrepreneurship between the private sector and the Scottish Government; notes the crucial role played by Scotland's entrepreneurs and the all-sector enterprise support network in developing the "Scotland CAN DO" approach, including through the Unlocking Ambition Challenge; further notes the role of the public sector in supporting entrepreneurship and innovation through organisations such as CivTech, and welcomes the commitment to build on this momentum, as set out in the Economic Action Plan.
The concept of entrepreneurship reaches back to the work of Adam Smith, and Scotland rightly has a long and proud history of creating new industries. Entrepreneurs in Scotland today continue to play a vital role in our economy, and their success must be recognised. They build new businesses and create jobs, providing a boost to local and national economies; they add to national income by generating new wealth and increased tax receipts; and they generate multiplier effects for the economy by creating new products and services.
Although we all recognise that entrepreneurship is a vital part of the economy, the reality is that no Government can legislate for it: we cannot regulate entrepreneurship into existence. Instead, the role of Government should be to create a dynamic skills, business and financial environment in which entrepreneurship can flourish.
The importance of creating such an environment was highlighted in a recent study by Grant Thornton, which identified that £4.3 billion-worth of business growth is being lost to Scotland because of what it described as an environment of barriers, including barriers to access to skills, technology and innovation, and financial issues.
Will the member give way?
Dean Lockhart
I will in a second.
Perhaps that is why business creation rates in Scotland continue to lag behind those in the rest of the UK—and perhaps that is what John Mason wants to explain.
Dean Lockhart mentioned a lack of skills. Is he not concerned that Brexit could lead to a greater lack of them?
The UK Government has announced a new immigration policy, which is designed precisely to align with the economy's skills needs, so no—I am not concerned.
The Scottish Government's motion sets out various initiatives supporting entrepreneurship, which we welcome. However, a patchwork list of initiatives is not enough to create the right environment for enterprise. The motion also refers to the new economic action plan, but that plan is merely what the Fraser of Allander institute describes as
"a long list of government initiatives recording how money is spent."
We need to do more to realise Scotland's entrepreneurial potential. That is why our amendment calls on the Scottish Government to take a more fundamental approach to create a dynamic skills, business and financial environment that truly supports entrepreneurship.
Tom Arthur (Renfrewshire South) (SNP)
I completely agree that skills are a key issue. One of the key drivers of skills is our fantastic university sector. I am sure that Mr Lockhart will welcome as much as I do the figures that were released last week showing that 15.6 per cent of university students are from the 20 per cent most deprived areas. The commissioner for fair access, Sir Peter Scott, said in today's Herald that the SNP policy of free tuition fees was vindicated.
Let me just ask Mr Lockhart—
Mr Arthur, I think that that is a long-enough intervention.
Tom Arthur
Does Mr Lockhart support the policy of free tuition—
Mr Arthur! We are short of time for the debate. I call Mr Lockhart.
Thank you, Presiding Officer. Let me address the intervention. There is a skills shortage in Scotland, which has doubled since 2011. Over the past 10 years, college student numbers have been cut by 150,000 and the CBI has called on the Government to do more to fill teacher vacancies in vital subjects such as maths and science.
I say to the minister, who is responsible for the digital economy, that we are also seeing an increasing digital skills gap emerge in Scotland. The Economy, Energy and Fair Work Committee has heard evidence that only 9 per cent of businesses in Scotland use digital in their business, compared to 43 per cent in other countries. A number of new businesses in digital and technology will not be able to get off the ground unless the digital gap is addressed.
That is why we have been calling for the establishment of a dedicated institute of e-commerce—a specialist agency that would help emerging enterprises take full advantage of the global opportunities in e-commerce.
The member talked about the need for skills. Will he respond to the FSB's point that the UK Government's "obstinate approach" to immigration will ensure that non-UK labour and skills will not be there to enable small businesses to grow and sustain their operations?
I have already said that the UK Government has announced a new immigration policy that is designed to fill the skills gap.
On the business environment, we need to promote Scotland as a home for innovators. Entrepreneurs create jobs; they are business developers who support economic growth. Not only that—they tend to be top-rate taxpayers who contribute to Government tax revenues.
Not surprisingly, we face competition from around the world and the rest of the UK for those innovators, but instead of trying to attract them to Scotland, the SNP is doing exactly the opposite by making Scotland the highest-taxed part of the UK for entrepreneurs.
Gillian Martin (Aberdeenshire East) (SNP)
I have given way enough—I am sorry.
We also need a business environment that encourages entrepreneurs to scale up and expand their business base, but, again, we have a Government that does the opposite by inflicting the large business supplement on successful firms with the ambition to expand.
I turn to enterprise policy. Scotland has a vibrant start-up scene, with many entrepreneurs looking to commercialise new ideas and innovations. However, the SNP's enterprise policy fails to provide the right level of support for start-ups across Scotland.
The Economy, Energy and Fair Work Committee is concluding an inquiry into business support, including business gateway, which is the primary provider of enterprise support for start-ups. The committee has heard evidence that because of a lack of funding and resource, business support for start-ups across Scotland is inconsistent and lacks expertise. We also heard that the number of start-ups receiving assistance has dropped to an eight-year low.
If we are serious about supporting start-ups, we must have a fundamentally improved system of start-up support.
I am sorry, but I am just about to conclude.
I urge the minister to take action on the committee's recommendations when its final report is presented to Parliament.
After 11 years of SNP Government, we have a low-growth, low-wage, low-productivity and low-innovation economy, with levels of innovation in Scotland now in the third quartile of Organisation for Economic Co-operation and Development countries.
I remind the minister that all these policy areas have been within the control of the SNP for 11 years. If Scotland's true entrepreneurial potential is to be realised, we need to see the SNP Government change direction in economic policy and create an environment in which innovation and enterprise can flourish.
I move amendment S5M-15507.1, to leave out from ", as set out" to end and insert:
"notes the economic forecasts of the Scottish Fiscal Commission, which state that Scotland's economic growth will continue to be subdued over the next five years and will continue to underperform that of the UK as a whole; further notes that Scotland's business creation rate continues to lag behind the rest of the UK; recognises the impact that the Scottish Government's policy of making Scotland the highest taxed part of the UK has on Scotland's reputation as being open to entrepreneurs, and calls on the Scottish Government to change direction in economic policy in order to create the skills, business and financial environment in which entrepreneurship can flourish."
I call Rhoda Grant to speak to and move amendment S5M-15507.2—five minutes, please.
Rhoda Grant (Highlands and Islands) (Lab)
Scotland has a long history of entrepreneurship. Unfortunately, most of it is historic. We need to lay again the foundation that encourages that entrepreneurial spirit. Although there is little to disagree with in the Government motion, statements of intent do not really build the foundations that we need in order to thrive. A couple of years ago, I attended the Commonwealth Parliamentary Association women's conference that looked at women in business. A number of women addressed the conference and talked about their own experiences. For the most part, they had gone into business because circumstances forced them to. It was the difficulty of finding work that fitted around caring responsibilities that drove them to set up their own businesses. They were driven not by a career choice or a burning ambition but by what they needed to do to survive.
Women's Enterprise Scotland published a report highlighting the barriers faced by women entrepreneurs. Its recommendations pointed to the in-built inequality in the way in which support is provided, which means that women are underrepresented in the sector. That is detrimental to women and to our economy as a whole. Some of the issues that WES raises are amplified by others, such as the FSB, as being true throughout the sector. They include, for example, the fragmentation of support and the missing middle: the transition between business gateway and the enterprise sector.
I have constituents who find themselves being passed back and forth between different organisations because the help available from one is quite different from that available from another; many businesses fall between all of them. Businesses need seamless support. When companies are trading successfully, they become vulnerable to takeover from larger organisations that can grow the business. That indicates that there is a risk factor for companies looking to take the next step to grow and export, and that they need support at that point. The loss of ownership of those companies damages our economy. They often become part of larger multinationals, so we lose much of the wealth that they create in taxes as well as their income.
If we are to maximise the benefits of entrepreneurship, we need to encourage, grow and nurture those companies, but the system does not do that seamlessly. In addition, the support available is not always suitable. Enterprise companies tend to focus help on account managed companies, which fit a narrow definition, while other potentially successful businesses get little or no support. We need to be more open to different business models. Again, the support for those can be fragmented. Co-operatives and social enterprises spread risk while providing employment and economic benefit, but their economic impact is sometimes overlooked and they do not get the support that they require.
Does Rhoda Grant agree that some of the issues around business support involve looking for too fast a growth and that woman-led businesses tend to be more about sustainable, long-term growth?
Rhoda Grant
Yes, I agree with that. However, there are also gaps in the support provided, and that is most likely to be felt by women.
As I said, the economic impact of co-ops and social enterprises is sometimes overlooked. Although there are expert organisations that can help them, co-ops and social enterprises also need mainstream support that understands and encourages that form of entrepreneurship, supports them and signposts them to those expert organisations where necessary.
The same is true of sole traders. In many rural areas, there is not the opportunity to grow a business, because it is about filling a local niche. Those businesses are a crucial economic driver in rural communities and, if they fail, there is a detrimental impact on the wider economy. However, those businesses are often overlooked because of their inability to grow. In addition, as my colleague Daniel Johnson said in an intervention, there are the falling enterprise company budgets. It is therefore difficult to see how the Scottish Government is supporting entrepreneurs.
The Conservative amendment talks about Scottish economic growth underperforming against that of the rest of the UK, and we agree with that point. However, we do not agree that fairer taxation discourages entrepreneurs; indeed, we believe the opposite. Austerity damages our economy and business opportunities for entrepreneurs. It holds our economy back, and those who bear the brunt of that are the least well-off in our society. Therefore, we cannot support the Conservative amendment.
You must close, please.
However, austerity handed down from the UK Government cannot explain the difference between the Scottish economy and the economy of the rest of the UK. Yes, there is the uncertainty of Brexit, but that is shared throughout the UK.
You must close, please, Ms Grant.
Indyref 2 would give more uncertainty to Scotland.
I move amendment S5M-15507.2, to insert at end
"; notes the report from Women's Enterprise Scotland highlighting barriers for women entrepreneurs getting support; further notes concerns about the fragmentation of support for start-up businesses, especially for social enterprises, worker co-operatives and sole traders, while budgets for Scottish Enterprise and Highlands and Islands Enterprise decrease, and calls on the Scottish Government to provide streamlined support to business start-ups and to ensure that such support should continue in order to discourage successful businesses being bought over, rather than grown rooted in the Scottish economy."
We are really pushed for time today. That is largely because of people going over their time, which is unfair to their colleagues. Willie Rennie, you have four minutes.
Thank you for setting me up so nicely, Presiding Officer. I will aim to keep within four minutes.
I recognise the success of Scotland's entrepreneurial businesses and the contribution that they make to employing people across Scotland. Members need to look no further than the east neuk of Fife and the village of Pittenweem in my constituency. According to the Federation of Small Businesses, it is the fourth most enterprising town. No less than 14.7 per cent of its workers are self-employed, which is an astounding 128 per cent above the national average.
I was fortunate to spend 16 hours on the night shift with one of those businesses—the prawn boat Sanela. I cannot say that it was easy—I did not sit down for the whole 16 hours—but it provided an example of the dedication that small businesses and businesspeople offer as a contribution towards our economy. Small businesses are responsible for seven out of ten private sector jobs in rural areas, accounting for more than 40,000 jobs in Fife alone and almost double that in Scotland's two biggest cities.
Does Willie Rennie welcome the fact that two of the most entrepreneurial villages in Scotland are in the Highlands?
I think we will find that two of the most entrepreneurial hamlets are in North East Fife. If we look closely at the statistics, I am sure we will find that that is true.
My father was a small businessman in the grocery trade. I saw at first hand the dedication, hours and heartache that come with running a business, employing people and meeting the expectations of customers—who, of course, were always right.
I draw the minister's attention to the concerns raised by the Federation of Small Businesses surrounding the drop in the numbers of both registered and unregistered businesses between 2017 and 2018. The FSB pointed out that
"A decline in the number of Scottish businesses spells trouble for our ambitions for our economy and our local communities."
and said that we need to create a stronger start-up culture.
It is important that we take action to promote that culture as the threat of an undesirable no-deal Brexit looms over our economy. According to the Scottish Government's website, almost a third of small and medium-sized enterprises believe that a no-deal Brexit would be detrimental to them. I looked closely at the Conservative amendment and, bizarrely, there was no mention of Brexit. I am sure that that was just an oversight.
Women's Enterprise Scotland is right to highlight the barriers that women face, so we need to redouble our efforts to make that culture change happen.
The Scottish Government's economic action plan has committed to delivering apprenticeships, as it should, but I want the minister to go a step further. When asked whether they know someone who has started a business in the past two years, the number of Scottish people who answered yes was way below the UK average, as it was when they were asked whether, in the place where they live, there will be good start-up opportunities in the next six months. The number of Scottish people possessing the skills and knowledge to start a business was also below the UK average. We have to do better than that, because, as we have seen from the statistics, SMEs are at the heart of the growth in our economy.
Bruce Crawford (Stirling) (SNP)
Will the member take an intervention?
Mr Rennie is just closing
I am sorry, but I am in my last minute.
We need to improve enterprise education in schools. The way to create the new culture is to encourage more young people into business. I urge the minister to look again at enterprise education in schools.
We move to the open debate. Speeches should be absolutely no more than four minutes long, please.
Stewart Stevenson (Banffshire and Buchan Coast) (SNP)
I start by encouraging Dean Lockhart to walk a couple of hundred metres up the Canongate, cross the road and go into the Canongate kirkyard. In the north-west corner he will find Adam Smith's grave, and I suggest that he reads what it says on it. However, I will leave that for another day.
The Tory amendment mentions business start-ups. I had a quick look at one aspect of that by looking at the Companies House figures and, lo and behold, the figures, which are published quarterly, show that the increase in registered companies in Scotland is going at about 4.06 per cent per quarter. Guess what the figure is in England and Wales. It is 4.06 per cent per quarter—it is very similar. I absolutely accept that the base in Scotland is smaller—
Stewart Stevenson
I am not going to have time. I ask the member to forgive me.
There are all sorts of reasons for those figures, but I cannot develop them here in the time that is available.
I want to say a little about taxation, because the Conservatives are also focusing on that. The key thing that helps to start businesses is a friendly tax regime. The small business bonus is hardly a disincentive to small businesses and it is not replicated anywhere else in these islands. This Government has done extraordinarily well.
Of course, by taking away student tuition fees, we are also making sure that the next generation is equipped to do the things that we need—
I will not. It is just because of the time. I am halfway through already. I ask the member to forgive me. I am sure that his intervention would be worth listening to, but I just do not have time.
We are supporting both entrepreneurs and innovation, because the two are bedfellows. This debate focuses on entrepreneurship, and we must be conscious that, when we support start-ups, new businesses and new ideas, not every one that we support will ultimately be successful. Something that I want to know but which I have found rather difficult to find is the failure rates. If they are too low, we are being too unambitious in the way that we support companies.
I worked as a technologist in banking, and if a bank branch had no bad debt, the manager was instantly taken out of position because he was not being ambitious enough in his lending. If he had too much bad debt, he was also taken out and hung, drawn and quartered, so there is a balance to reach, but we must recognise that there is risk associated with entrepreneurship.
There are some outstanding examples, and I will mention one from Gillian Martin's and my constituency experience. Ten years ago, in Fraserburgh, two lads started BrewDog. It began with two people under the age of 30. Today, they have had to move to get a bigger site in Ellon in Gillian Martin's constituency, and the company is worth more than £1 billion. I very much welcome the fact that it is going to be supporting the business improvement district initiative in Peterhead by bringing a BrewDog bar to the main street. That is absolutely terrific.
In the few seconds that I have left, I note that we also need to think about how we support intrapreneurs—in other words, entrepreneurs inside big companies. The best initiative that we had at the Bank of Scotland was when Bruce Pattullo said in the early 1980s, "Our objective is to double the size of the bank in 10 years." That was the single objective and everybody in the organisation knew it. We did it in seven. Keep it simple—it works.
Alison Harris (Central Scotland) (Con)
I am grateful for the chance to debate the topic of supporting Scotland's entrepreneurs. I start by declaring a registered interest in the topic, having started an accountancy practice over 20 years ago.
Before looking at how we support entrepreneurs, it is important to have a clear understanding of what we mean when we talk about entrepreneurs. When we hear the word "entrepreneur", it is easy to think about the huge success stories: Andrew Carnegie, Sir Arnold Clark and Michelle Mone, to list a few. However, the term really describes any individual who sets up an enterprise or business, who assumes the risks and—they hope—reaps the rewards that come with that.
Entrepreneurs can take many forms. They can be sole traders, partnerships or small limited companies. Our local butchers, hairdressers, plumbers, mechanics and restaurant and nursery owners are therefore all entrepreneurs.
Being an entrepreneur is to be in a very different environment from that of an employee, as I know only too well. The excitement of the potential growth of the business is combined with the extra hours of working at night. All the responsibility falls on the entrepreneur's head.
Being in business is not always easy, as anyone who is in business knows. So many uncontrollable factors can get in the way of success. In the light of that, the best way of supporting entrepreneurs is by creating a business-friendly environment, in relation to the factors that we can control.
It is also important to have a positive attitude towards people in business and to celebrate and encourage success. The public face of an entrepreneur often hides the blood, sweat and tears that are involved behind the scenes. For entrepreneurs, the balance between the risks and the rewards of their hard work needs to be perceived as worth while.
In my Central Scotland region, Falkirk has always stood out as a hub of independent traders and small business owners. The area has been synonymous with those entrepreneurs for decades. Recently, however, significant cracks have started to show. In the publication, "Business in Scotland 2018", it was revealed that the number of businesses in Falkirk fell between 2017 and 2018. The fall was largely driven by a reduction in the number of sole traders and small businesses.
We on the Conservative benches have long argued that the SNP sends the wrong message to businesses and indeed to workers in Scotland.
Alison Harris
I ask the minister to wait until I finish.
For example, many small businesses see no point in scaling up here in Scotland, because they will be charged twice the level of large business supplement that they would be charged in England.
Moreover, last year, the SNP introduced significant income tax changes, which made Scotland the highest-taxed part of the UK for anyone earning more than £26,000. That sends the wrong message to people, by telling them, "Work harder and you'll keep less of your money."
Will the member take an intervention on that point?
Ms Harris is closing.
The tax changes influence business decisions, too. Entrepreneurs must decide whether it is worth putting in the extra hours, and their employees must decide whether to push for a promotion.
There are clear knock-on effects of the policy. It hurts Scotland's already low productivity growth rate. Between 2010 and 2017, productivity in Scotland went down.
We need to incentivise entrepreneurs to set up businesses, and we need to make it as easy as possible for people to scale up their businesses. We need employees to be encouraged to work hard and aspire to promotion. Creating an environment in which we accomplish those simple key principles is the best way for us to support entrepreneurs.
The Economy, Energy and Fair Work Committee has carried out a range of inquiries that touch on entrepreneurship. I will mention some of them, as I go along.
For example, the committee is just concluding its inquiry into business support, which has been mentioned in the debate, in which we focused on business gateway. Of course, I cannot go into the detail of our conclusions until they are published, but most of the evidence that we have taken is on the public record, so I think that it is fair to say that the picture of business gateway across Scotland is a bit patchy. Some entrepreneurs have been positive about the support and advice that they have received from business gateway, some have been more connected to Scottish Enterprise or HIE, and some have got their businesses going with little public support.
One thing that strikes me is the tendency among the children of entrepreneurs to become entrepreneurs themselves. That is absolutely fine, but it leaves us with a challenge: how can we encourage more young people whose parents were employed by public or private sector organisations to think about setting up their own enterprises? It says on the Scotland can do website:
"An entrepreneurial mindset can be learned and a culture that supports it created."
I agree, but I do not think that it is necessarily easily learned, and I think that much depends on the mindset that the person has to start with.
My father was an engineer and my mother was a teacher. I do not think that I ever seriously considered starting a business of my own. I assumed that I would work for an organisation, as they had, and that is broadly what I did in my career as an accountant.
The first challenge is to get more businesses started up. The second challenge is to get our entrepreneurs to grow those businesses, and not to sell them off too soon, before they have really fulfilled their potential, in what is sometimes called the fear of heights.
I will, if it is very quick.
Effective broadband is clearly crucial to entrepreneurship, whether the business is starting up or scaling up. Does John Mason have any idea when we will see full broadband coverage in North East Scotland, where I live?
That is important, but it is a bit off the subject of today's debate.
Skyscanner grew to a considerable size while it was independent and was therefore sold for serious money when the time came to do that, but other companies have been sold—as Rhoda Grant said—much earlier, and the feeling is that the Scottish economy as a whole has therefore not benefited as much as it might have.
Once again, I find myself strongly disagreeing with the Conservative amendment. Here we have a party that keeps the major levers of the economy reserved to Westminster, but its members are quick to claim the credit when they reckon that their actions have contributed to economic growth. However, London has been running the Scottish economy for more than 300 years, whereas the Scottish Parliament has had some involvement for only 20 years. Perhaps—just perhaps—the reason why the Scottish economy has not done so well, and why it risks continuing not to do so well in the future, is that London is running the show.
Unemployment in Scotland is at a welcome low level, but the other side of that is that we do not have many extra people available for new jobs that might come along in the future. There could well be a skills shortage soon. Brexit and the potential of Westminster stopping workers coming to Scotland make it likely that our economy will suffer. If the Scottish economy suffers more because despite our needing immigration, Westminster applies immigration controls, the Conservatives must surely accept that the Westminster Government is responsible for the Scottish economy doing less well.
I have slightly less of a problem with the Labour amendment, but Labour seems to want more expenditure but does not tell us where the money would come from.
I have a voluntary entry in the register of interests as a non-remunerated director of Macquick Ltd (Bagpipe Covers).
Entrepreneurs come in all shapes and sizes and from all walks of life. They might be big business tycoons—some of whom were mentioned in the minister's opening speech—inventors, or people who have turned a hobby or skill into an idea for a small business venture. Unfortunately, however, they are predominantly male. Therefore, I intend to focus on the issue of women as entrepreneurs. In the Scottish Government's economic action plan, it is made clear in the "Driving Entrepreneurship" paper that collective efforts must be broadened to address the needs of women in enterprise and in the creative sector.
We are all aware that new businesses are a key driver of economic growth and that it is vital that people get the help and support that they need to ensure success. Small business start-ups are not good only for our economy: they are also good for helping people into employment, as business owners and employees.
The minister mentioned the widening poverty gap in her opening speech. Of course, employment used to be a guaranteed way out of poverty, but clearly that is no longer the case. With one in four Scottish children living in poverty, and two thirds of those living in households in which at least one person works, we can see that a job is not always the way out of poverty. Women are the poorest people in our society, so it is particularly important to support more women into business and to break down the barriers to their doing so.
The Scottish Government's "Women in enterprise: framework and action plan" seeks to address a number of the challenges to women in business, but it is needed because women are still underrepresented in self-employment and in business ownership.
I note that £400,000 has been ear-marked for this financial year to help initiatives such as the ambassador programme that focus on women. However, I would be grateful to hear from the minister in summing up—unfortunately we do not have time for interventions—whether some funding can be focused specifically on tackling the lack of start-ups in areas of higher deprivation where women suffer health inequalities, and among people who live in poverty and exclusion in general. That could include specific funding for projects that work with women who have complex health needs and who the mainstream labour market does not always fit. Personal control and flexibility are important in such cases. I would be grateful if the minister would comment on that.
Women working in agriculture is a specific area that also needs more attention. I and other MSPS recently hosted a women's dinner in the Scottish Parliament at which Sarah Allison, who is the vice-chairperson of NFU Scotland's next generation group, spoke passionately about the opportunities for women in the farming and agriculture sector, and the role that we can all play in supporting them.
The Scottish Government's women in agriculture task force, which has been working on that issue, has just published an interim report. The recommendations for training include
"Short courses designed for women new to farming ... Practical as well as financial and management training courses to be targeted at women"
"Courses targeted at women to take into account their needs, including childcare."
That approach is already showing positive results and is challenging the stereotype of agriculture and farming as an all-male preserve.
I highlight the importance of harnessing women's existing skills and taking them seriously as a business proposition. There is a challenge in ensuring that women's business ideas—for example, jewellery making or being a beautician—are not dismissed as hobbies and that they receive the support and respect that they deserve. Sometimes, relatively small amounts of funding can be enough to start up businesses, but getting the funding can be extremely difficult for many women.
I support the Government motion and the Labour amendment. I certainly do not support the Tory amendment.
Gordon MacDonald (Edinburgh Pentlands) (SNP)
In written evidence to the Economy, Energy and Fair Work Committee, Scottish Chambers of Commerce stated:
"Scotland has an enviable level of support for developing businesses, delivered through local authorities primarily via Business Gateway, the Enterprise Agencies, and private sector organisations such as Chambers of Commerce."
Scotland is the fifth most effective environment for business support globally, up from 13th in 2013. That finding is supported by research that was carried out by the University of Strathclyde's Hunter centre for entrepreneurship. It has identified that Scotland's Global Entrepreneurship Development Institute
"profile improved both absolutely and relative to benchmark nations. If it were a nation state, it would rank 5th when included with 28 innovation-driven nations on the GEDI index for the 2012 to 2015 period, comfortably within the upper quartile"
and behind only the United States, Australia, Denmark and Sweden.
The most recent official figures for the number of registered businesses in Scotland records 16 per cent growth since 2007, with more than 28,000 new businesses including sole traders and partnerships, which grew from 54,000 to just under 69,000.
In order to support new entrepreneurs and existing businesses to grow, there is a range of support, from business incubators to innovation centres, in addition to the enterprise agencies and business gateway. Some might see that as a cluttered landscape, but the outcome is that Scotland's business survival rates are above the UK average. Scotland is ranked first out of the UK's 12 regions for two-year and three-year survival rates. When it came to the five-year survival rate for businesses that were born in 2012 and were still active in 2017, Scotland's rate was 44 per cent which, again, was above the UK average.
We do not often hear about business death rates. Again, Scotland is performing better, with a business death rate that is 11 per cent lower than the UK average. London has the highest business death rate, with more than 86,000 businesses failing in 2017.
In Edinburgh, the business support landscape has supported the city to become one of the UK's economic hot spots. CodeBase, which is the UK's largest start-up incubator, is home to more than 100 of the country's best technology companies, and brings together entrepreneurs, world-class technological talent and top investors.
In my Edinburgh Pentlands constituency, the Edinburgh business school, which is located at Heriot-Watt University's Riccarton campus, has a start-up incubator in which successful applicants are offered free space in fully equipped offices for a year. The budding entrepreneurs also have access to workshops, training and expert advice. In business accelerators, Edinburgh has Scotland's first specialist fintech hub at the Royal Bank of Scotland headquarters at Gogarburn, where innovative fintech entrepreneurs and start-ups have access to similar expertise.
Start-up finance is critical to ensuring that new businesses get to the point at which they can start trading. The Scottish Government is investing in the Scottish encouraging dynamic growth entrepreneurs—Scottish EDGE—fund competition. In the 12 rounds that have taken place so far, it has invested in 350 businesses, which has resulted in £130 million of additional turnover and 1600 jobs.
I welcome the proposal to reopen the Scottish stock exchange here in Edinburgh, which would create 60 highly-skilled jobs. Over the past year, the number of employers that are based in Scotland has increased by 900. If we can become the best place in the world to do business, many more new and existing small businesses will grow to become employers, which will make our economy stronger.
Tom Mason (North East Scotland) (Con)
Scotland's current economic performance can be described only as mediocre. Growth is forecast to be lower than that of the UK as a whole for the next four years, and gross domestic product is growing half as quickly. Productivity is at its lowest level in nearly nine years, which is a far cry from the Scottish Government's goal of being in the top quarter of OECD countries. Target set, target missed.
We need to do considerably better, so it follows that we must find ways of improving performance and productivity wherever we can. We need slicker ways of working, less cluttered regulation and bureaucracy and a much more enterprising nation, with new ways of working, new markets and products, and innovation in all that we do.
Innovation comes about through experimenting and risk-taking, and we look to entrepreneurial activity to achieve the success that we need in order to progress the economy at a much faster rate. The best examples of entrepreneurship are when individuals are able to take calculated risks that take advantage of market conditions, knowledge and experience. Innovative processes should therefore take place on a large scale, such as business start-ups, and on a small scale, in every department in organisations across Scotland.
I once asked the chief executive of a leading venture capital company who it was best to invest in, and he replied that it is the person who really knows their market and has failed at least once—or, better, twice. We need that element of calculated risk to push the boundaries of what we can achieve. I am reminded of the words of George Bernard Shaw. In 1903, he said:
"The reasonable man adapts himself to the world: the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man".
I apologise to females for that quotation.
We need to find ways to encourage risk-taking and to ensure that, if people fail, the consequences are not too burdensome. With that in mind, investment in business support is vital.
Can the member say whether he will vote for Labour's amendment, which asks for more money, as well as for his party's amendment, which asks for a tax cut?
Tom Mason
I will vote for an environment in which business enterprise and entrepreneurs can flourish. Money is not necessarily the vital part in that.
We need to fix our flatlining research and development spending, which is the worst among OECD countries, bar New Zealand's. We need to sort out our unacceptable skills gap, which has doubled since 2011. We need to ensure that communities have the powers that they need to be reactive and flexible in order that they can deal with the unique challenges that they face. We need to help the high street properly and take account of e-commerce. To compensate for risk, we must reward success where it occurs and encourage investment and, importantly, profitability. Sadly, the SNP does not take that approach.
A business supplement that is double that of the rest of the UK puts Scottish business at a "competitive disadvantage." Those are not my words, but those of Scottish Chambers of Commerce. Where is the incentive when Scottish businesses pay an extra £190 million in taxes every year? The Scottish Government must incentivise innovation, not treat it as a cash cow.
We have so much potential as a nation, but we cannot realise it until such time as the right support is available from the Scottish Government. The current approach is not working as it should. If everything was fine, there would not be fewer businesses across the country than there were last year, and productivity would not be at its lowest level since 2010.
I urge the Government to think carefully about what has been said here today, and to work constructively towards developing policies that work much better and allow innovation and entrepreneurship to flourish.
I once again have the opportunity to highlight a significant number that I often mention when talking about Scotland's enterprise potential. The number is 7.6 billion, which is how many pounds would go into the Scottish economy every year if the same number of women as men started up in business.
The Labour amendment makes specific reference to the work that is done by Women's Enterprise Scotland. I recommend that Rhoda Grant and Elaine Smith come along to my cross-party group on women in enterprise, for which WES is the secretariat. We have done great work over the past three years, including securing funding for WES and its enterprise training for women.
I have not been along to a meeting—I will try to get along—but I read some of the minutes, which were very interesting.
Elaine Smith would be most welcome, as would everybody else.
Many of the women we have heard from at the cross-party group are innovators, particularly in tech. We have also had sessions on women in agriculture, heard from women from areas of multiple deprivation who have started up in business and done a lot of work on access to finance and business support. We have usually concentrated on the lack of both for women and the unsuitability of current enterprise structures, which miss out on women's potential due to unconscious bias.
From WES research, we found out that women-led businesses view growth as a sustainable, long-term process, rather than as something with a fast, high trajectory, and that, if a business fits in the middle between small and very large businesses, it might not be eligible for a lot of support. Women-led businesses focus on broader community measures such as employment, fair working practices and service, and produce quality, rather than just turnover.
More than three quarters of respondents to a recent WES survey stated that services should be more aware of the difference in support needs of women and men in business, and appropriate peer support was listed as being particularly desirable for women.
That brings me on to this week's deadline for applications for business ambassadors for Women's Enterprise Scotland. I hope that one of my constituents, Lindsay Ritchie, will apply. She embodies the can do approach that is mentioned in the Government motion. A small unit in the village of Newmachar, her business, Kilts Wi Hae Ltd, ships traditional Highland dress and gift items all over the world. She employs seven local people—and a work-experience student—which is seven people not having to commute into the city for work. Small businesses providing local opportunities in small towns and villages are good for high streets, the environment and working parents.
I note that Lindsay's small business and many others in my area are able to have premises with a shopfront, thanks to the increase in the ceiling of the small business bonus. The majority of high-street businesses in my constituency now qualify for that vital support.
I want to mention low-carbon innovation before I finish. Leaving the Economy, Jobs and Fair Work Committee and moving on to convene the Environment, Climate Change and Land Reform Committee has been very interesting. Through our deliberations on the Government's Climate Change (Emissions Reduction Targets) (Scotland) Bill, it has been glaringly obvious that our business and innovation support agencies would do well to have a focus on the potential in shepherding businesses that can be part of the low-carbon revolution, whether in tech for renewable energy; bioscience that improves soil conditions, plant health or feed for livestock; or innovative agribusiness. There is a wealth of knowledge and innovative thinking in our environment and agriculture sector in Scotland that could be nurtured and exported to lead the way in the world as we face up to our climate change responsibilities. If we have that focus, it is ours for the taking.
Untapped enterprise potential is the key to economic growth in Scotland. It is also the key to many of this Government's priorities: equality of opportunity, environmental sustainability, fair work, innovation and internationalisation.
We move to closing speeches. Daniel Johnson will be followed by Jamie Halcro Johnston.
Thank you, Presiding Officer. With only four minutes, I feel more as though I am taking part in a pitching competition than summing up a debate, but I will have a go.
I refer members to my entry in the register of members' interests. I am a non-working, non-remunerated director of a retail business and a member of the FSB.
I have always struggled a little bit with the term "entrepreneur". When we think of entrepreneurs, we think either of Mark Zuckerberg or Del Boy, but when I was working in business I never felt that I was either one of them. I felt that I was constantly chasing my tail, trying to keep all the plates spinning and trying to ensure that I was making progress in my business.
It has been a point of consensus in the debate that the essence of being an entrepreneur is about hard work. It is also about making the most of both the entrepreneur's talents and those of the people who work in their businesses—a point that Rhoda Grant made well. That is why it is right to focus not just on people in whizzy high-tech businesses, but on those who work very hard in more day-to-day businesses, and to consider how to support them so that they can make the most of their talents.
There has been much that we can agree on in the debate. I refer also to the debate in Labour Party time last week, on investment and business support, which had two points of consensus: we need to see how to grow our middle-sized companies, and that needs to be done through a combination of investment and support. Those are points that we can all agree on.
Although there is much that Labour can agree on in the Government motion, unless we really look at how to stimulate growth and tackle the underlying issues of productivity, there is a danger that the motion is piecemeal. Likewise, there are issues with the Tory approach to the debate. There was much in Dean Lockhart's contribution that I agreed with. I agree with him that we need the right environment for enterprise and that there is danger in a patchwork of approaches and organisations. I agree that there is a need to do better on the digital skills gap and I agree that we need to fund business support more effectively. How that translates into an amendment that simply talks about lowering taxation as the sole instrument and device with which to support our enterprises makes no sense to me.
Although I agree that no businessperson likes paying tax, the reality is that growing a business is also about infrastructure that is invested in through the public sector and about skills that we provide through our education sector. It is about making sure that we plug those skills gaps and support businesses that need to grow to take new opportunities. Again, that is about business support—about the state and the private sector working in partnership. That requires public sector investment and, the last time that I checked, the best way to do that was through taxation. If the Tories have an issue with that, I gently point them in the direction of the Scandinavian countries or Germany, which have significantly higher levels of taxation but seem to do significantly better than we do with regard to productivity.
I do not have the time.
We must also celebrate our successes. Gordon MacDonald did a good job of pointing out successes right here in this city. We have a turnover from tech businesses of £1.14 billion, 212 start-ups in the past year, 10,000 direct tech jobs and 38,000 in associated efforts. That is because we have a highly successful university that has acted as a conduit for knowledge exchange and collaboration. Therein lies a hint as to where future success may lie for future enterprise policy in this country.
Jamie Halcro Johnston (Highlands and Islands) (Con)
We have seen a welcome focus from Governments at all levels on the need to back innovation and I welcome some of the minister's comments. In what has been far too short a debate, we have heard a number of positive contributions from around the chamber, and I will draw attention to a few of them.
My colleague Dean Lockhart highlighted the increasing digital skills gap that is emerging in Scotland, which we should all be concerned about. As he mentioned, the Economy, Energy and Fair Work Committee, on which we both sit, has heard evidence that only nine per cent of businesses in Scotland embed digital in the business, compared with 43 per cent in competitor countries. As a country, we have to address that digital skills gap and I agree whole-heartedly with Dean Lockhart's call for the establishment of a dedicated institute of e-commerce to help emerging entrepreneurs to take full advantage of global e-commerce opportunities.
Alison Harris was right to point out that, when we think of entrepreneurs, too often we think of the huge success stories: the Andrew Carnegies and Arnold Clarks or, as Daniel Johnson mentioned, the Del Boys. However, serial and successful entrepreneurs come in all shapes and sizes, from the person who sets up and runs a business that employs thousands of staff to the person who may employ five or 10 people. Their reasons for starting their own business, however, may be the same. Tom Mason made an important point when he highlighted the fact that many entrepreneurs fail at least once, but what differentiates them from others is that they get up, dust themselves off and give it another go—sometimes more than once. They learn from their mistakes, and it is their determination that drives them on.
In his intervention on the minister, Daniel Johnson highlighted the cuts to the budgets of Scottish Enterprise and Highlands and Islands Enterprise—
Jamie Halcro Johnston
I do not have time, as we have only a short time for debate. Perhaps more time should have been allowed for what is an important subject.
Mr Johnson could also have mentioned that Highlands and Islands Enterprise underspent on its budget for broadband by more than 45 per cent last year.
Willie Rennie has seemingly launched the entrepreneurial hamlet of the year awards, coming soon to the international conference centre Pittenweem—get your tickets as soon as you can.
Elaine Smith touched on women in agriculture. This is a good opportunity to mention the sisters Kirsty and Aimee Budge, from Shetland, who are the "Countryfile" farming heroes for 2018.
The minister and others highlighted the importance of addressing the barriers to women entrepreneurs. That is a part of the Labour amendment that we can agree with. Unfortunately, we also feel that the amendment seems to discourage foreign investment in Scotland, which is the wrong message to send, so we will not be supporting it.
The issue of entrepreneurship and encouraging more entrepreneurs is one around which we can hopefully build some consensus. There appears to be a recognition across the chamber that there have been shortcomings in our approach in the past and that there is a need to improve in the future. Scotland has suffered too many years of slow growth and a failure to effectively grow businesses from start-ups to organisations of a significant size.
As I have already mentioned, in common with a number of speakers today, I have had the advantage of sitting on the Economy, Energy and Fair Work Committee during its recent business support inquiry. We heard a great deal of evidence about the functioning of both the enterprise agencies and, at a local level, business gateway. Those will be key bodies in driving forward a cultural change in support of entrepreneurialism.
One thing that seems odd to me, however, is that business gateway, as a local authority service, does not seem to be better integrated to the other functions of local authorities. If we are to embed enterprise earlier in the consciousness of young people, surely organisations such as business gateway can make more of a contribution through their respective councils.
More widely, there has been a positive focus on collaboration today, and that is welcome. However, if we want entrepreneurship to have equal status in terms of the careers that we signpost to young people, we must give it parity of esteem. That will involve incorporating entrepreneurship at all levels. There are, clearly, unharnessed opportunities to build entrepreneurial skills as part of apprenticeships. I know of one former plumbing apprentice who has all the skills to be a plumber but, having set up his own business, is now having to learn how to run that business, with all the additional skills that that requires. He felt that even the most basic business training as part of his apprenticeship would have been extremely helpful when he started down the road to setting up on his own.
Although I was slightly disappointed when, speaking to a group of about 12 MSYPs in Parliament last year, only one showed any interest in starting up their own company, I appreciate that that is not necessarily reflective of the aspirations of young people. I highlight the case of Estrela from Orkney, which was Kirkwall grammar school's young enterprise team of 2017-18 and which has gone on to be crowned Scottish company of the year. We must ensure that every young person who grows up in Scotland receives a rounded enterprise education that will not only open up new horizons but will also provide them with the practical skills that they require to run a small business.
We on this side of the chamber will welcome any new work from the Scottish Government to support entrepreneurs and break down some of the barriers to starting up a new business. Sadly, however, it is many of the policies of this SNP Government that are holding Scottish business back. As long as the SNP continues to be an Administration that values tax rises above creating an environment for the private sector to succeed, our economic growth will suffer. So, too, will our productivity, which this Government pledged in its 2016 manifesto to tackle. Instead, the gap with the rest of the UK is at its widest level since 2012.
We can and should be ambitious about our entrepreneurs and be clear about the ways in which we can allow a truly entrepreneurial spirit to flourish in Scotland.
I thank all members for their contribution to today's debate. Above all, I hope that entrepreneurs across the country feel that we have paid tribute to their efforts. Whether they are in the hamlets of Fife, the villages of the Highlands or the streets of Edinburgh, they are the ones who deliver the successes, who can get up and go and who bear a lot of the risks of what we do.
Many of the issues that we have discussed during the debate deserve more time for greater reflection than we have been able to manage today. It is clear that supporting all of Scotland's people to realise their potential, no matter where they choose to realise it, is a priority that we all share. That endeavour has to be a collective one.
I will start by again referring to the hypocrisy in the Conservative amendment in talking about attracting people to this country. That from a party that gave up on attracting people to the country years ago, with its restrictive immigration rhetoric and anti-immigration policies. Over the past few weeks, those policies have been lambasted by business for jeopardising and devastating the economy. In the words of one business organisation, the UK Government
"seems hell-bent on ignoring the business community when it comes to its immigration policy".
The Conservative Party might, therefore, want to figure out how to attract people before it lectures others on doing so.
Back on the Scotland can do approach, supporting Scotland's people, investing in Scotland's talent and attracting people to the country, it is clear that we will be able to do those only if we work across society with private, public and third sector partners.
I will touch on a number of issues that members have raised, the first of which is growth support. Along with the Royal Bank of Scotland and the Hunter Foundation, we created and continue to support the Scottish EDGE—encouraging dynamic growth entrepreneurs—fund. Since 2013, that private partner, which was spun out of Scottish Enterprise, has awarded more than £13 million to 350 businesses; supported the creation of more than 1,600 jobs and an increase of more than £113 million in turnover; and helped to secure more than £100 million of additional investment. Following our economic action plan commitment to amplify Scotland can do, Scottish Enterprise has invested a further £1 million in Scottish EDGE.
I pay tribute to Gillian Martin and the cross-party group on women in enterprise, which Elaine Smith commented on. In 2014, with Women's Enterprise Scotland, we launched the first policy framework anywhere in the European Union to tackle the enterprise gender gap. That is now being progressed with many other partners through the women in enterprise action group. It is important that we are working with other partners. They include Investing Women, the Federation of Small Businesses, Scottish Chambers of Commerce and the Association of Scottish Businesswomen. Together, we are trying to drive change, because we recognise the figure that Gillian Martin gave on the huge impact that there would be on the Scottish economy if the start-up rate among women entrepreneurs was the same as the rate among men. By working with and listening to those partners, we have started to achieve progress.
Elaine Smith asked about investment. I draw members' attention to the new digital fund, which is in the budget and which I will be taking forward. It focuses on providing grant support to those who are furthest from the labour market to get the digital or tech skills that they need and which are required in our economy. The aim is to expand the workforce and to provide people with support. In particular, I would like to encourage women to access the fund, as well as others who are furthest from the labour market.
As the minister for the digital economy, does the member support our calls for a dedicated institute of e-commerce?
I support individuals and businesses that want to improve what they are doing digitally. At the moment, industry tells us that we need about 12,800 new entrants to the digital workforce just to stand still, without even starting to realise the huge opportunities that come with digital. We are putting in place digital growth funds for business as well as individuals, so that businesses recognise the opportunities and individuals take advantage of the opportunities to retrain.
Our shared vision is one of an entrepreneurial society, and that starts with Government. It means that the Government needs to value an entrepreneurial mindset, which we then support externally. We want to have that mindset in Government, and we want to support start-ups, particularly through our procurement approach. A core part of that approach is CivTech, which is an innovative project that works with the public sector to disrupt normal procurement models and which puts out problems for small companies to work towards remedying. That can often be the first step for small and medium-sized entrepreneurial businesses in getting their foot through the door.
It is true that there is much to be optimistic about, including the business start-up and growth rates in Scotland. We are seeing success. We know that Scotland is the fifth most effective environment for business support globally, and we should celebrate that. However, in light of the UK Government's damaging proposals in relation to not just market access but immigration, we know that we need to work even harder to ensure that Scotland is an attractive place for skills and talent and for entrepreneurs to choose to set up businesses in.

redpajama_set_name: RedPajamaCommonCrawl


The lie is AC/DC. I saw Springsteen twice - once in Ireland.
Okay here's mine..one is a lie.
Ron, I'm going to guess Queen from your list.
I saw Queen 10 times all in the 70's. I never saw Jersey's own Bon Jovi.
It's like how people from New York don't go to the Statue Of Liberty.
Right. I've only seen Bruce once. Never saw Southside. Saw Jersey's own Four Seasons once.
Hi guys..ok, The Temptations-James Brown-The Chi-lites-Jimmy Ruffin-The Manhattans-The Soul Children-The Ebonys-The Moments-Cameo-The Four Tops...one I didn't see.