Finance, Employment and Sustainable Growth Questions

During Portfolio Question time, Mid-Scotland and Fife MSP Murdo Fraser questioned John Swinney on Scottish Government aid to the Amazon Distribution Centre in Fife.

Amazon were initially granted Scottish Government support after the online retailer claimed the plant would support 750 jobs, yet today only half that number are employed.

Chamber exchange attached below

Murdo Fraser (Mid Scotland and Fife) (Con): To ask the Scottish Government how it ensures that companies setting up or expanding activities in Scotland comply with the conditions attached to any financial assistance it has granted. (S4O-01562)

The Cabinet Secretary for Finance, Employment and Sustainable Growth (John Swinney): All available schemes of financial assistance have clear monitoring and audit processes set out in the terms of the award of assistance, and projects are monitored to ensure compliance with national rules and agreed terms and conditions.

Murdo Fraser: When Amazon came to Fife last year, it received more than £8 million in support from the Scottish Government. At that time, Amazon promised to create 750 permanent jobs but, to date, only half of them have been delivered, with many other workers on short-term or casual contracts. What is the Scottish Government doing to ensure that companies such as Amazon not only pay their taxes but, more importantly, keep their promises?

John Swinney: As Mr Fraser will know, the Scottish Government does not have responsibility for the collection of the taxes for which Amazon is liable, other than in relation to the payment of non-domestic rates for the property that it occupies in Dunfermline. The tax collection issues are very much the property of Her Majesty’s Revenue and Customs, which I remind Mr Fraser is a reserved organisation.

On the Scottish Government’s responsibilities in relation to the payment of grant awards, the payments are made in instalments—typically over several years—as job and capital expenditure targets are met. Scottish Enterprise is responsible for monitoring all the grant payments, and it requires companies to submit formal applications for payment of the instalments, which usually include a formal certification of the claim by an independent accountant.

When the grant has been paid, Scottish Enterprise monitors the project for a fixed period that is set out in the grant agreement and requires the company to submit formal monitoring reports to ensure that all the conditions have been met. In all circumstances, the payments are monitored regularly. On occasions when companies have for example had grant paid to them and then decided to scale down their operation, we reclaim grant from them by virtue of the monitoring processes that we undertake.

I assure Mr Fraser and the Parliament that the administration of grant payments through the regional selective assistance system is taken very seriously. We will continue to monitor the issues in relation to Amazon and all other recipients of regional selective assistance.

Speaking outside the chamber Murdo Fraser MSP said:

“I welcome the clarity from Mr Swinney’s answer. I seriously hope that the Amazon distribution centre is subject to a rigorous audit process in relation to the £8 million pounds it received from Scottish Enterprise.

“During the planning process I fully supported the Amazon distribution centre and I continue to do so, however questions must be raised as to the claims that were made at that time.

“Initially it was claimed that the centre would support 750 permanent jobs with a further 750 temporary roles during peak times and Christmas. Cyclical fluctuations in the UK economy may have prevented this from happening. However, it must be acknowledged that these claims were made last year on the centre’s opening day during the height of depressed consumption. What has changed since then?

“Amazon has recently experienced ire from both press and public in relation to their tax affairs. With UK pre-tax profits of £74m on sales of £3.3billion last year the online retailer appears to be in rude health. I would like to know how much more growth is required to achieve the forecasted number of jobs.”