Jenny Marra : McGill- Topical Question

5 February 2019

Jenny Marra

To ask the Scottish Government what action it is taking to assist the Dundee-based firm McGill, which has entered administration and announced an initial 374 redundancies.

The Minister for Business, Fair Work and Skills (Jamie Hepburn):

The Scottish Government is concerned that McGill and Co Ltd has gone into administration. Since being made aware of the company’s cash-flow problems, Scottish Enterprise engaged closely with it and offered it assistance with a turnaround plan.

However, McGill did not provide the required financial information in time for the appropriate due diligence to be undertaken.

I also spoke with McGill’s managing director throughout the process and offered my full support.

McGill responded to my offer to speak with any of its major debtors, and I spoke with the one that it asked me to on two occasions.

Unfortunately, McGill’s trading situation declined, and a positive outcome was not possible.

Our partnership action for continuing employment—PACE—team was present on 1 February when McGill informed staff that it was appointing an administrator.

A PACE event to support employees will be held on 7 February in Dundee.

I spoke with the administrator and Unite the union yesterday.

The administrator is exploring all options for a sale of the business, and Scottish Enterprise will maintain contact with the administrator and look to introduce and assist any viable interested parties.

We will continue to offer support to those employees who have been made redundant, to support them back into employment.

Jenny Marra :

That is possibly the most inadequate answer that I have ever heard in the Parliament.

That is not my understanding of the situation at all. I understand on very good authority from McGill that it provided all that was asked for in a timely way.

Some 450 workers will lose their jobs, and our thoughts today are with them and their families.

They know, however, that this should not have happened.

McGill is a company with a £40 million order book.

It is profitable, but it had a cash-flow situation.

It went to the Government on 9 November, in the same week in which we heard that Michelin was closing, and asked for a loan.

On 30 January, 12 weeks later, Scottish Enterprise went back to McGill and said no to that £2 million loan to cover cash flow.

When Prestwick airport received £46 million of Scottish Government loans, with no indication of when they will be paid back, when Burntisland Fabrications can secure £35 million and Ferguson Marine Engineering can secure £45 million, why could McGill not get just £2 million to save 450 jobs, when Dundee is reeling from the Michelin and HM Revenue and Customs closures?

Who made the decision not to give McGill the loan?

Why, given the scale of job losses in Dundee, did the minister not instruct Scottish Enterprise to make that loan available and save those jobs?

Jamie Hepburn:

I am sorry that Ms Marra feels that the answer was inadequate.

She may have thought that she had it on good authority, but my answer is entirely accurate.

The issue is that McGill had no historical link with Scottish Enterprise.

It is not an account managed company—the first time that it approached Scottish Enterprise or had any interaction with it was to say that it was in financial difficulty.

At that stage, Scottish Enterprise offered to support the company through funding KPMG to review the cash position and evaluate options, and it asked for a business plan.

On 18 December 2018, Scottish Enterprise emphasised the need for a revised business and turnaround plan at that juncture.

Unfortunately, the revised business plan did not come until some time after we were first approached and not in time for it to be given proper consideration through due diligence.

I would regret turning the issue into some form of political knockabout.

At the end of her contribution, Jenny Marra said that her primary thoughts were with the workforce at this time.

I hope that that would be the case for anyone in the chamber. That is exactly where my thoughts and priorities are.

Our PACE initiative has intervened quickly.

We will have an event on 7 February, less than a week since the company went into administration.

The task for us all now is to unite to support the workforce to get back into employment, not to engage in political knockabout on this most important issue.

Jenny Marra:

This is utter complacency. PACE is for continuing in employment.

Does Jamie Hepburn not realise the state of the Dundee economy?

The jobs toll is running into the thousands.

Is the minister telling us that companies have to be account managed to approach Scottish Enterprise to save 450 jobs?

All that McGill was told, throughout the whole process, was that it did not fit the Government’s model.

The minister had 12 weeks to sort this out and to get his people in Scottish Enterprise to help McGill to save those jobs.

He had 12 weeks.

What kind of timescale is it when, in a commercial environment, the Government takes 12 weeks but then decides not to grant the loan?

Why can millions and millions of pounds go to other parts of the country when Dundee cannot get one penny for McGill?

Four hundred and fifty people are losing their jobs.

The minister who failed to act should consider his position, given that utter negligence.

Jamie Hepburn:

Ms Marra should have listened a little more closely to the answers that I gave.

At no juncture did I say—and it is not the case—that a company has to be account managed if it is to approach Scottish Enterprise for assistance.

The point is that, if a company has that prior engagement, it might be better placed to get earlier intervention if it is having financial difficulties.

I am sure that Ms Marra understood that that was my point.

Ms Marra said that no investment is going to Dundee.

We have just announced a £150 million city region deal, so the idea that we are not investing in Dundee does not bear scrutiny.

The immediate circumstances that are before us are that we have a company that, unfortunately, is not able to continue to trade, despite the best efforts of Scottish Enterprise and my officials and—let me tell Ms Marra right now—despite my best efforts in engaging directly with the company and some of its major debtors, both at my offer and at their request for intervention.

Unfortunately, we have not been able to ensure that the company can sustain itself.

We will do everything that we can to get the workforce back into employment.

That is our priority.

We will do everything that we can to support the administrator in getting a buyer.

I hope that everyone in Parliament welcomes that action and will collectively commit to it.