Plenary, 17 Sep 2009

Meeting date: Thursday, September 17, 2009

Official Report 751KB pdf

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Diageo

Good morning. The first item of business is a debate on motion S3M-4862, in the name of John Swinney, on Diageo. I point out right at the start that we have no spare time whatsoever available in the debate, so I ask members to stick strictly to their speaking times.

Diageo's restructuring announcement on 1 July set out the company's plans to shed 900 jobs in Kilmarnock and Port Dundas. It was immediately recognised that the impacts on those communities were potentially devastating, and that led to a united campaign across Scotland, across this Parliament and in the House of Commons to safeguard those vulnerable communities at risk. A task force of East Ayrshire Council and Glasgow City Council, the GMB and Unite trade unions, local elected politicians of all parties, Scottish Enterprise and the Government developed a workable proposal that we presented to Diageo. In my opinion, the task force was a successful partnership of interests, and I once again pay tribute to the sustained commitment of all the parties in developing an alternative proposal.

Like many others, I am profoundly disappointed that Diageo did not respond positively to the proposal. This morning's debate provides an important opportunity to reflect on the work of the task force and allows the Parliament to look forward. To date, we have been united in our efforts to address the effects of Diageo's announcement, and we owe it to the individuals and communities that will be affected to work to mitigate the impacts that the company's decision will have. In that respect, although I reserve my position on the arguments that will be deployed, the amendments that have been lodged by Mr Brownlee and Mr Brown assist in the articulation of a considered position by Parliament. At the conclusion of the debate, Mr Mather will reflect on the points that they will make.

Rightly, the Parliament has already considered the issue. On 2 September, I made a statement in which I set out the task force's work to develop the alternative proposal. That day, we also had Willie Coffey's members' business debate, which focused on Kilmarnock's contribution to Diageo over generations and highlighted the devastating effects of the company's plans on the town. My statement also referred to the situation in Port Dundas and the implications for the workforce there. Those were useful events, and I welcomed the repeated statements of support from across the chamber for the discussions that I was to hold, on behalf of the task force, with the company the following day.

The task force developed credible proposals to safeguard employment that involved the development of a greenfield site in Kilmarnock and the maintenance of activity at Port Dundas. Copies of the proposition that was put to Diageo have been placed in the Scottish Parliament information centre for the information of members.

The document that was presented to Diageo was not designed to be the end of the story. It was part of the process of developing a plan that met the interests of all parties across Scotland. It was clear in the document that we were not seeking to interfere in the operation of a globally successful business. The task force's creation and response were recognition of the impact that the company's decision will have.

The proposal was developed in a way that reflected the fact that in order to take further action, we needed additional and specific information from Diageo. It was presented in a way that was designed to give the company ownership and to ensure that its business needs were met. The task force was clear about how we thought that the value gap between our proposal and Diageo's proposals could be reduced. Among the opportunities to reduce the value gap that were identified were the use of shared services, a reduction in redundancy payments, increased productivity and honest offers from the trade unions to change working practices. The trade unions have a long record of taking such an attitude and adopting such an approach at Diageo's centres of production.

Through those measures, we estimated that the value gap could be reduced significantly, to around £3 million to £4 million per annum. The gap was not completely closed, and we earnestly hoped that Diageo would be willing to recognise its corporate and historical responsibilities to Kilmarnock and Port Dundas, and to reach an equitable solution.

The proposal was developed through the combined efforts of the task force, which brought together not only the skills of the public sector, but business expertise and, particularly from the unions, a clear understanding of the operations of the whisky industry. Using that knowledge, the task force suggested that continued activity by Diageo at Port Dundas was a viable option. That reflected the reality that the closure of Port Dundas was dependent on a number of Diageo investments coming together on time. We argued that a delay in the final decision would also allow Diageo to make an informed decision in the light of the current economic climate. For example, whisky export sales dipped significantly in the first quarter of 2009 but increased in the second quarter of the year.

The task force's proposal set out the possibility of a greenfield site being developed in Kilmarnock. That would never have safeguarded all the jobs at risk, but it would have maintained Diageo as a sizeable employer in Kilmarnock. As well as safeguarding direct employment at the plant, it would have contributed significantly to indirect employment in the community. Our response has always recognised that the impact of Diageo's proposals will be wider than the 900 direct job losses, devastating as they undoubtedly are.

Before Mr Swinney leaves the market issue, does he accept that because whisky is a long-maturing product, the market now is in some ways related to the market in a year or two's time, which is when the whisky that is currently being produced will go out to consumers?

Mr Brown makes a fair point, which reiterates the fact that decisions must be taken on a long-term and sustainable basis. I do not think that any of us considers that the market problems that have prevailed for the past 12 months are in any way typical of the market environment that we are likely to experience for a prolonged period. In that context, companies must be extremely careful about the decisions that they make.

In the course of discussions with Diageo, I made it clear that the potential existed for the provision of public sector support, although any investment would have to meet the state aid rules and demonstrate public value. I reassure Parliament that Diageo was never, and never will be, offered a blank cheque. We wanted to discuss with the company opportunities for providing support that would reduce the final value gap, but only where that would lead to public benefits, such as safeguarding jobs in the vulnerable communities. Although investment is to be made in Fife, there will still be a net loss of Scottish jobs and an imbalance in economic activity across the country.

The task force's proposals were for discussion and development with the company, but Diageo took the view that they did not fit its business model. I speak on behalf of many people across Scotland—not just members of the task force—when I express our disappointment in the company's response. Diageo indicated that its decision marked a point of closure in discussions with the Government about an alternative business plan.

Although I respect the requirement of Diageo management to make decisions that it believes are in the best interests of shareholders, I fundamentally believe that Diageo has not properly appreciated the impacts of the proposed job losses, which will not just affect the communities and individuals concerned but result in costs that the public sector will be expected to pick up. The EKOS consultancy estimated those costs to be in the range of £7 million to £14 million a year. Diageo has taken the view that its discussions with the Government about an alternative business plan are closed. We now have a duty to focus on some of the challenges that arise from that decision.

On Monday evening, I chaired a meeting of the task force to review progress and next steps. It was a useful meeting. Quite correctly, the trade unions are continuing to engage with Diageo to pursue the statutory rights of the workers who will be affected, and they will continue to develop further options. I have committed to providing all the necessary information that we hold that might be of help to them.

Has the cabinet secretary had any dialogue with Diageo since last Wednesday's announcement about the formal consultation process that the trade unions are going through?

I have discussed a number of issues with Diageo, including that one. However, Diageo is dealing with the issue; it is not for the Government to be involved in direct discussions on such matters.

I raised with Diageo the wider issue of the regeneration of the communities and sites that will be affected. That fits into the wider obligation of the Government and the public sector to focus our work on supporting those who lose their jobs—sometimes whole families are affected—and regenerating the communities around Hill Street in Kilmarnock and in Port Dundas.

The task force agreed that East Ayrshire Council and Glasgow City Council would ensure that regeneration proposals are specific to local circumstances and opportunities. An assessment of regeneration options and retraining and skills needs will be undertaken as a priority. A representative of Skills Development Scotland was present at the task force meeting on Monday. That organisation will be responsible for putting in place the partnership action for continuing employment—PACE—teams, which will be activated to ensure that every effort is taken to support the individuals affected.

Scottish Development International will be active in trying to secure inward investment into the Kilmarnock area to ensure that all business opportunities are properly supported. The Government and our enterprise agencies will be active partners in supporting the local authority-led teams to lead the process of regeneration and renewal in the communities. Job losses will not occur until next year, but every effort must be made to reduce the invidious uncertainty that individuals in the affected communities face.

The task force will continue to meet regularly to co-ordinate common issues. We know that the impacts in Kilmarnock and Port Dundas will be significant, and we recognise the valuable role that East Ayrshire Council and Glasgow City Council can play in ensuring that we make progress on the agenda to renew the affected areas.

A key issue for the task force with its on-going responsibility will be to manage engagement with Diageo. We must ensure Diageo's support for regeneration activities, and the Government will work with all its energy to ensure that that happens. However, Diageo must address the regeneration agenda in due recognition of its responsibilities to communities that have contributed to the company's development over many years. It must leave behind a positive legacy, meet its responsibilities to its employees, and ensure that the sites are restored and available for new use.

We have set an agenda for supporting the communities, using all the tools at our disposal. However, events over the past two months have shown that there is a wider set of issues around the whisky industry. The trade unions have highlighted their concern at the increasing use of Transfer of Undertakings (Protection of Employment) Regulations to transfer staff, such as those at Hurlford, between companies, and many have commented on the need to consider the level of value added that is retained in Scotland and the opportunities to maximise that.

The Economy, Energy and Tourism Committee is currently considering a proposal for an inquiry. I would value its consideration, particularly in respect of looking forward to a successful future for whisky in the country of its birth. The whisky industry is a major contributor to our economy and history. We want to work with it and others to enhance the enormous value that it brings to Scotland and to ensure that it makes a significant contribution to the future of the country.

In conclusion, I reiterate my gratitude to everyone who has been involved in the work to date. Diageo's response was unwelcome, but we must move on, focus on supporting the individuals and communities that have been severely affected by the announcement and ensure that they are reassured by the support that the Government and our agencies can offer.

I move,

That the Parliament recognises the work of the Diageo Taskforce to safeguard jobs in the west of Scotland; notes with real disappointment that the taskforce and Diageo were unable to agree a way forward; recognises that support for the individuals and communities affected is a major priority; calls on the Scottish Government to support the trades unions in their efforts to ensure that an extension on the proposed closure of Port Dundas is fully considered, that the proposed new jobs in Leven are permanent and high quality in nature and the formal consultation process between Diageo and trades unions is extended to ensure that all necessary steps are taken to mitigate the closure of the Kilmarnock packaging plant, and supports the continued work of taskforce members to tackle the devastating impacts that the job losses will have on the affected communities.

I am particularly grateful for the extra details that the cabinet secretary has given about the Government's view on how things will proceed, and for his comments on the necessary regeneration of the affected areas and the retraining opportunities that will be provided. I am particularly heartened by his comments about Scottish Development International and the need to attract inward investment. I will develop those points at length later.

None of us—not even members who represent Fife, where new jobs will be created under Diageo's plans—would for a moment deny that there will be a real and serious impact on communities in Kilmarnock and Glasgow. We know that large-scale job losses can devastate communities at any time, but there is a greater impact on areas such as Kilmarnock, where jobs are concentrated and money from direct employment and indirect benefits will be taken away from the local economy. All parties that are represented in the chamber recognise the impact of the announcements on those communities. That was shown in the members' business debate led by Willie Coffey at the beginning of September and in the cross-party campaign prior to that.

Whether we like it or not, things have moved on. We have Diageo's response to the task force's proposals and know that, in the company's view at least, no workable alternative was proposed. We cannot reasonably expect companies to do whatever Governments tell them to do or to follow every suggestion that task forces or any other groups make, but we can reasonably ask that they consider all the options and listen to alternatives that may not have been considered. That is what was asked of Diageo. It was always a strong possibility that, having given such consideration, the company would decide to press ahead with the original proposals. Indeed, it would be surprising if a company the size of Diageo had not considered all options before making an announcement.

Mr Brownlee makes a fair point. In the past, Diageo has been involved in pre-consultation with the trade unions, but that did not happen on this occasion. Does Mr Brownlee support such an approach? Should there be better engagement with the workforce before such decisions are taken?

Ultimately, individual companies must make decisions, but we would all agree that it makes life a lot easier for everyone involved if the workforce, unions, companies and the Government all pull in the same direction. As a general principle, consultation makes things better, but, obviously, it may not be possible in some situations.

People do not expect that Governments will always be able to prevent job losses, but they expect Governments to do what they can to prevent them. Diageo provides another lesson—if we needed one—about the limits of what any Government can do.

We could use the debate to state our opinions on Diageo's decision—indeed, I am sure that some members will choose to do so—but a decision has been made and it seems virtually impossible to believe that whatever is said in Parliament today will cause a change of heart. Indeed, Diageo has said that the matter is closed. That is why the Conservative amendment looks to the future and focuses on what can be done not just to mitigate the impact of job losses in Kilmarnock and Port Dundas, but to turn the local economies around and build a sustainable and diversified range of employment opportunities. Our amendment looks at the broader need for the whole of Scotland to attract more investment in order to create and retain jobs in the years ahead. Simply attacking Diageo because of a decision that it has made will do nothing to bring new investment to Scotland or offer new hope to anyone who faces losing their livelihood as a result of that decision. We must look to the future. We must all—including those of us in opposition—be aware of the impact of our portrayal of Scotland as a place in which to do business on people who may be seeking to invest in it. We cannot allow anger at one decision to spill over into a broader perception that Scotland is a place where it is difficult to do business; if we do, we will lose many more jobs to our competitor nations.

The Government is right to set out in its economic strategy the ambition for Scotland to be the most attractive place in Europe to do business. We should all aim for that. We must recognise that Scotland's attractiveness to global businesses depends on the combination of a number of factors. It is not about Scotland being the lowest-cost place to do business or about a race to the bottom in respect of wages, terms and conditions or anything else, although it is obvious that the costs of doing business here are important; rather, it is about ensuring that we have as skilled and productive a workforce as we can get, a transport infrastructure to overcome the disadvantages of geography, and a political system and a government—at all levels—that are aimed at encouraging investment.

Scotland is not alone in setting out its stall for new investment. Every country in the world is doing that. We have to compete globally, and there is no reason why we cannot do so. We cannot afford to set our face against that. Countries that compete globally will lay the foundations for future success; those that retreat into protectionism or parochialism will pay a heavy price in jobs and prosperity in the years to come.

Throughout Scotland, 75,000 people have lost their jobs in the past year. This debate is not about why that has happened. Most economists expect total job losses to continue to grow long after the economic recovery has taken hold. I will express that number differently. Even if no one else loses a job, for the past year we have had the equivalent of one Diageo announcement every other day. Based on what has happened in past recessions, the bad news will keep coming for some time.

The Conservatives accept that Diageo's plans will result in a disproportionate blow to the local economy, particularly in Kilmarnock, and that that may justify a greater level of support from the Government than the raw number of job losses alone suggests. However, that leads to fundamental questions about the role of Government and how much support communities can reasonably expect when they suffer job losses or when such losses are proposed, now or in future; and to a reasonable question about how effective such support might be.

A consistent approach is needed from Government in offering support to prevent and mitigate job losses. In some parts of Scotland, such as East Ayrshire, broader and longer economic decline has been masked to some extent by the presence of major employers. The Diageo decision would be a severe blow in any circumstances, but in the context of the particular situation in the local labour market, it is all the more serious. To put it bluntly, there was an economic problem in East Ayrshire before Diageo decided to pull out.

Statistics that were released yesterday by the Committee of Scottish Clearing Bankers show that the number of new businesses that were created in East Ayrshire in the second quarter of 2009 was down by a third from the previous year. In Glasgow, the numbers are down by 30 per cent. Both those areas are experiencing a greater decline than Scotland as a whole, for which the figures are down by around a fifth, and Scotland itself has underperformed in new business creation in comparison with other countries. I think that all parties agree that we need to improve on that; indeed, increasing business start-ups is another Government target that I assume would have cross-party support.

We might be lucky with regard to the actions of SDI, and the Government might secure new inward investment from a major employer to replace the jobs that are lost.

Mr Brownlee's line of argument runs the risk of undervaluing the efforts by agencies and Government to identify economic opportunities and to land deals that result in greater employment. Will he clarify whether he is in any way questioning whether that is a purposeful role for the Government to undertake?

I am not at all. My point is that the chances of our securing inward investment to replace those jobs in one fell swoop are probably less than the chances of our being able to replace the jobs through the creation of indigenous businesses and a larger number of smaller businesses. That is why the Government must, as well as seeking inward investment, focus on trying to grow new businesses in areas of Scotland such as East Ayrshire.

Diageo has indicated that it wants to play a part in the regeneration of Kilmarnock and the Government is right to engage with the company on that because there must be a major contribution to regenerate the local area. All parties have so far shown a great deal of energy in opposing Diageo's plans, but the responsible thing to do now is to show the same energy in attempting to ensure a future beyond Diageo for Kilmarnock and Port Dundas, and a future for Diageo in Fife and elsewhere. That should be the focus of all members in the chamber during the years ahead, and that is what the Government should concentrate on.

I move amendment S3M-4862.1, to insert at end:

"; calls on the Scottish Government to work together with the UK Government, local authorities and relevant agencies to encourage new job creation and new business start-ups in the affected communities and elsewhere in Scotland; recognises that Scotland must compete in a global market for the investment necessary to create and safeguard jobs, and calls on the Scottish Government to ensure that its actions are aimed at maximising such investment."

I thank the cabinet secretary for his comments and for the context that he gave us in speaking to his motion this morning.

The Liberal Democrat amendment in my name makes the basic point—as my colleague Ross Finnie did in the members' debate recently and will no doubt do again today—that no man, and no company, is an island. Decisions by major players in the Scottish economy that result in major job losses and local economic damage are a matter of major public interest, and are rightly scrutinised closely by the public and viewed by most of us as needing to be based on a persuasive and principled case that takes some account of loyal employees and the interests of the communities that have hosted their businesses over so many years.

Following Diageo's decision to confirm the closures, the Liberal Democrat amendment raises some basic questions about the principles that underlie—and those that should underlie—the Scottish Government's approach to the matter. Derek Brownlee made a good point about the fact that Scotland must be an attractive place in which to do business, and there are some tensions with that in some of the propositions.

The campaign against the Diageo closures has united public opinion across Scotland and made—dare I say it—many unlikely allies. It has become a totemic campaign, partly because of the importance of whisky to Scotland and to Scotland's image and self-image, and partly because of the way in which a major global company of great importance to Scotland has interplayed with the Scottish Government.

I get the impression that the extent of the publicity and the adverse comment came as somewhat of a surprise to Diageo. However, since the crisis in the financial system, there has been something of a shift in the tectonic plates. Some of the shine has gone from globalism; there is no longer the same belief in the virtues of untrammelled markets; and global companies, in banking and in other sectors such as this, are much more in the spotlight and must be much more accountable to the public than before. All of that is right.

There may be some wriggle room on the edges that will help the workforces—delaying the closure of Port Dundas distillery, for example—but the stark reality, as the cabinet secretary mentioned, is that the original decision has, rightly or wrongly, been confirmed by Diageo. We must now focus primarily on the implications for the workforce, the local areas that are affected and the industry, and on how Government is best able to intervene.

It is worth noting, as the Government's motion does, that some of the lost jobs are offset by new jobs in Leven, although there is nonetheless a net loss to the economy. As a Glasgow MSP, however, I know that Diageo's decision to close Port Dundas distillery will have a devastating impact on the people in the area. We can continue to campaign for the company to delay the closure, but that will be only a temporary respite.

We now need real action from the Scottish and United Kingdom Governments, and, as has been mentioned, from the local councils—along with, I hope, a positive contribution by Diageo—to get the people who are soon to be unemployed back into quality work as soon as possible.

Does Mr Brown accept that the whole point of trying to get a stay of execution for Port Dundas is to allow and to help the workforce to move more easily into other employment or into training?

I accept that that is a valid point. There are several levels of context in the situation, and the member chooses to put it in that particular way.

I have met the unions and the company. My small efforts achieved nothing to overturn the closures but neither, of course, did the larger efforts of the Scottish Government, which is a matter of huge regret to all members in the chamber. Some people have wondered about the future of the whisky industry as a whole, and whether there are deep-seated problems ahead for Scotland's most iconic product—although most of us will view that in the light of Diageo's profit levels of more than £2 billion.

I confess that I am troubled by a number of issues, such as the fact that an international company of major importance to Scotland thinks that it can walk away from its social and environmental responsibilities, and the approach that the company has taken to the proposals. I am troubled by the proposition that public money, whether it comes from the local authority or from central Government, should be offered to that global company simply to ensure a different configuration of plants and workforce, and I will return to that point later. I am also troubled by whether the Scottish Government is showing a consistent approach to job losses of different types and in different places.

I will discuss those issues in turn, beginning first with the question of responsibilities. On the one hand, Diageo and other big global players must make the commercial and management decisions that suit their business. That is not, as the Government and others accept, something for politicians or Governments to second guess.

Will the member give way?

I need to make a little more progress, Mr Park.

We have neither the facts nor the expertise on the matter; and even Scottish Enterprise and professional consultants do not have those in full measure, although they can make an important contribution.

On the other hand, commercial decisions by some companies will, because of the size of the social, environmental or employment consequences, have large-scale effects on the public interest. In such cases, the effects on the local community or the public purse are such that Government, which represents the public interest, inevitably has a responsibility and an input and the company, as part of its corporate social responsibility—however that is defined—also has duties to the public interest. The cabinet secretary usefully laid down some markers for the approach that he and we expect Diageo to take in the days and months ahead. Over the years, Governments have acknowledged the duties on companies and have introduced legislation on notice periods for larger-scale redundancy. Somewhat imperfectly, Governments have also, through planning controls and other methods, imposed duties on cleaning up industrial contamination. Industry has acknowledged the existence of those larger duties, although not as much as it should have in relation to corporations that abandon particular locations.

Secondly, there are undoubtedly some issues with regard to the company's approach, which Mr Park touched on in his earlier intervention. There was no advance notice and no involvement of the workforce, the unions or central or local Government in the decision-making process, despite the fact that the involvement of those elements could have had a positive effect in contributing to the decision as well as in engaging in consultation after it was made.

I doubt whether there was ever a serious will to engage with alternative plans or to allow any consultation process to influence the outcome. Diageo had, in effect, two simple propositions: that the level of requirement and changing technology meant that they had three bottling facilities rather than two, which did for Kilmarnock, and that the company had identified an overcapacity in grain distilling, which sounded the death-knell for Port Dundas. Diageo did not accept that the BDO Stoy Hayward report offered, as the media described it, a real solution to either challenge.

On that, and on the Port Dundas distillery in particular, I simply reiterate the point that I made earlier in an intervention. Whisky is not a short-term commodity. I was brought up on a distillery in Aberdeenshire where my father had the highly unpopular job of being an exciseman or gauger; his job was to guard the Government's interests in the revenue. As a matter of total irrelevance, I add that Robert Burns had that job for a period. The relevant point is that whisky matures over years before it is ready for sale. The market for whisky is a long-term market where long-term decisions have to be taken. As John Swinney said in his reply to my intervention, the important thing is not the current position of the market but what it will be in the months and years to come. The current market trends may not be the market trends in 10 or 15 years' time.

It seems passing strange that the distillery should survive the economic vicissitudes of the 19th century, the first world war, the slump, the great crash, the second world war—although I think it closed then—the three-day week and Mrs Thatcher, only to fall after nearly 200 years as a victim of the current pressures.

Thirdly, I turn to public money, which is a difficult area. In the event, Diageo said that it did not feel that it would be appropriate for such a highly profitable global company to take Government money. That would have been difficult to justify, given that the company had announced profits of more than £2 billion before that stage. However, the Scottish Government argued that, across the piece, the consequences of the closures would fall on the public purse and that, on balance, there was a case for spending money to avoid that.

Fourthly, on consistency, there is no doubt that the closure proposals have had a lot of Government attention but, as Derek Brownlee said, they do not represent the biggest net job losses. Job losses in the textile industry in the Borders, the much-maligned financial services industry and the construction industry have not received the same attention. The Scottish Government must give us some clarity on the principles that underlie its approach.

I am sorry, but I am in my final minute.

When is the use of Government money appropriate? John Swinney said something about that. When is a major, A1 engagement with a company appropriate? What is it realistic for Government to seek to achieve? What tools are available to Government to safeguard the public interest? Those things have to be looked at.

At the end of the day, we are manifestly not in the economic conditions of recent years. We need sharpened tools and new approaches to make a difference and sort out support for employees, and that will require the combined efforts of the Scottish and UK Governments as well as those of councils.

I move amendment S3M-4862.2, to insert after "Parliament":

"believes that major commercial decisions in Scotland should be made in the context of sustainable economic development; regrets that the proposals by Diageo to close Port Dundas Distillery in Glasgow and the Kilmarnock packaging plant abandoned long-standing workforces and plants while taking little responsibility for the consequent public costs of their decisions; urges the Scottish Government to ensure that government support of communities faced with major job losses is applied consistently across all communities in Scotland;".

Over the past 18 months, we have witnessed closures and job losses that have affected every part of the country and every MSP. We can roll off names such as NCR, Freescale, Vesuvius and Vion. The thing that really concerns me—I raised it earlier—is the way in which the Diageo announcement was made and the lack of consultation with the workforce before the decision. That was a major mistake by Diageo. In the past, Diageo engaged with its workforce very well and took the workforce with it. They worked closely to meet some of the global challenges that have been mentioned this morning so that the company could be competitive not just in the UK but much more widely.

When we had the opportunity to question the Cabinet Secretary for Finance and Sustainable Growth on the matter a couple of weeks ago, which we all welcomed, I asked him about Diageo's approach. There has been a lot of concern and discomfort about it because the trade union movement previously held up the company as an example of how to do business. For me, it has been a summer of unnecessary uncertainty. We need to get that message out loud and clear from the Parliament this morning.

Some members might wonder why there is no Labour Party amendment to debate. I am happy to provide an explanation. Given the cross-party nature of the campaign, and after speaking to senior officials from Unite and the GMB, we were pleased to take up the Scottish Government's offer of a consensus motion. In our view, that approach reflects not only the cross-party nature of the campaign but, much more important, the wishes of the trade unions. I will come to the Liberal Democrat and Conservative amendments later, after I have highlighted our contribution to the Scottish Government's motion.

Our main focus is to ensure that the Scottish Government continues to support the trade unions and the task force in their efforts to maximise employment opportunities for Diageo workers across all its sites in Scotland. There are real concerns about the timescale for closure of the Port Dundas facility and what that means not just for the individuals who work there but for capacity in the business. My colleague Patricia Ferguson will say more about that. That is why the motion seeks to ensure

"that an extension on the proposed closure of Port Dundas is fully considered".

Concerns have also been raised about the nature of the proposed new jobs in Leven, which is a site that I know well. It is important that the new investment that goes into the Fife plant delivers high-quality employment for the people of Fife. In my view, that should involve permanent jobs, not temporary or agency work, and workers should be on the same conditions of employment as the existing workforce.

Although the work of the task force has been and will continue to be supported, it is important to recognise that it has been an unintended barrier to the trade unions in the formal consultation process. Due to circumstances, somewhat unfortunately, Unite and GMB shop stewards and officials are highly skilled in the area. Little over a week of the 90-day consultation period remains, and I am sure that members will agree that that places an unrealistic pressure on the negotiations that have to take place. I hope that Diageo will look sympathetically at the proposal for the period to be extended, particularly given the significant job losses that are proposed at Port Dundas and the devastating impact on the Kilmarnock area.

The Scottish Government's response is vital, particularly for Ayrshire. I have long argued in the Parliament for greater investment in redundancy support and skills, and those areas were addressed in this year's budget agreement on a Scotland-wide basis. What we have developing in Kilmarnock will require a robust response from all the agencies. My colleagues Irene Oldfather and Cathy Jamieson will say much more about that, and I am sure that they will have some constructive suggestions to make.

The Liberal Democrat amendment covers a number of key issues. The suggestion that we need similar responses from the Scottish Government to future job losses throughout the country is sensible and reasonable. However, in effect the amendment knocks out the words that we agreed initially with the trade unions and then with the Scottish Government. To support it would therefore put us in a difficult position.

Our amendment does not seek to knock out anything. It inserts things into the motion. It does not delete any details.

It knocks out three of the main prongs that the trade unions highlighted as their strategy. We wanted to reflect those views. However, we will see where the debate goes later.

The Conservative amendment focuses on the creation of employment in the areas that will be affected by the proposed job losses. That approach has worked to a significant degree in the past and it is relevant to the Scottish Government's response.

However we look at it, there are lessons to be learned from the process. As Robert Brown said, it has brought together a number of unlikely allies. I recognise the role that the First Minister has played. In the past, we have called on the Scottish Government to take an active approach to minimising job losses. Having spoken to some of the shop stewards, I think that there was concern about an adversarial relationship between the First Minister's office and Diageo, and Paul Walsh in particular. That needs to be reflected upon.

I mentioned the importance of involving trade unions in such decisions and sharing information with them. I welcome the fact that the trade unions were involved in developing the alternative proposal, but after speaking to shop stewards from Unite yesterday, I am a little confused about when they were given sight of the alternative proposal. Was it before or after the company had seen it? It would be pretty useful if the cabinet secretary or the Minister for Enterprise, Energy and Tourism clarified that when they sum up.

I am in my last minute.

I firmly believe that the workforce is Diageo's greatest asset. I have never doubted that, and my conversations and contact with shop stewards during the summer reinforced that view. Diageo has skilled and effective workers who care about their industry and their communities. One of them said to me yesterday that they have been given so many reasons why Port Dundas has to close that they wondered why it was open in the first place. The injection of that level of humour into the discussion shows that, although the situation is serious, the workers are looking to the future with some optimism. I am pleased that the Economy, Energy and Tourism Committee will look at the industry much more widely, and I hope that there will be trade union involvement in that inquiry.

Today, we need to send the workforce a message of full support and confirm that we will be by its side all the way through the process.

We come now to speeches from back benchers. I repeat that we have absolutely no extra time available, so strict time limits will apply.

I stand here again to speak in support of the 700 Johnnie Walker workers in Kilmarnock and Hurlford who are demoralised, but not defeated.

The events since Diageo's announcement on 1 July, which was ratified on 9 September, that it intends to sever all links between Kilmarnock and Johnnie Walker have been a devastating blow to the town that gave birth to the famous striding man. It is little wonder that a mass campaign was mobilised to support the cause, to articulate an alternative and to persuade the company's leaders that a huge injustice was about to be done. Of course there has been anger, but we must not forget that people are simply trying their best to protect their livelihoods and an iconic product that they hold dear—a product that is so much a part of the town of Kilmarnock. Make no mistake: the Diageo proposal will rip the heart from a community that has served the company well in its short tenure in charge of Johnnie Walker. The loss of 700 jobs in the town will make it the worst unemployment black spot in Scotland and will carry serious social and economic consequences.

However, I will not give up the fight to persuade Diageo bosses that this is a huge mistake, unrivalled in the corporate world. That a successful and respected company reporting very healthy profits amidst a recession should cast aside all its 700 workers in the town that gave life to the famous Johnnie Walker red label is truly beyond belief.

That is why in my letter to the company's chief officer, Paul Walsh, I asked him to look beyond the figures, visit the Kilmarnock plant—for the first time, I understand—justify his case personally, listen to the workers and reassess the situation for himself. I can guarantee that he will be met with courtesy and respect from a workforce that has demonstrated with passion and, indeed, great dignity in the most depressing circumstances. Someone once said that a weak man has doubts before making a decision, whereas a strong man has them afterwards. I am convinced that if Mr Walsh comes to Kilmarnock to hear his workers talk passionately about Johnnie Walker he, too, will begin to doubt the wisdom of walking away and leaving us empty-handed. How else is he to measure such commitment, and what value might he attach to it?

Should we fail in our task, it is still vital that the chief officer personally demonstrates his company's commitment to honour its social responsibilities to the employees and the town and to help us begin a new journey without Johnnie Walker. The company must make a substantial commitment and leave a substantial legacy to help the community to build that new future. Surely, after 189 years of the community making such a contribution, we can expect the company to do that. The local task force in East Ayrshire Council will certainly be working flat out to map out that new future.

The campaign in Kilmarnock was not based on a beauty contest between communities in Scotland. I have said before—and repeat this morning—that the case for closure fell apart when the £2.6 billion profits were announced. Surely we could all reasonably expect a secure future with a company that has reported such profits. If such massive downsizing is required in a time of plenty, God help the business in a time of poverty.

The task force proposal was—and still is—strong. Backed by the Scottish Government and East Ayrshire Council and supported by the workers and trade unions at Johnnie Walker, it offers a fully serviced greenfield site and whisky heritage centre with immediate access to the motorway network, a fully redeveloped site in the town and, crucially, the safe-keeping and continuation of the Johnnie Walker brand identity in Kilmarnock. That is a good deal and would not threaten the future of key investments being made elsewhere.

Last week, I had the pleasure of meeting Mrs Betty Heath, John Walker's great-granddaughter. For me, she epitomised the campaign and reinforced my belief that Diageo has got this badly wrong. She spoke with great emotion and passion about her family's connection with the town and the Johnnie Walker brand, and felt that the legacy had been entrusted to the company for safe-keeping. It was not to be discarded and simply thrown into the bin, and to say that she felt let down by the company is a monumental understatement.

What does the future hold for Scotch whisky, Scotland's most iconic industry? As the Cabinet Secretary for Finance and Sustainable Growth has said, I have asked the Parliament's Economy, Energy and Tourism Committee to examine current strategy and direction and to invite all stakeholders to make an input into such an inquiry. We owe it to ourselves and future generations to preserve and develop this fine industry.

Thanking all those who walked with us in Kilmarnock on 26 July can never be enough. The politicians who chose to join us, the unions, the local football club and the churches all stood up and were counted. The workers and people of Kilmarnock remain determined and cannot accept the loss of our famous son, Johnnie Walker. He is in our hearts and our blood, and we will fight to keep him.

No less a person than Abraham Lincoln said that the possibility of failure should not stop us supporting a cause that we believe to be just. The workers at Johnnie Walker in Kilmarnock and Hurlford will embrace such noble sentiments. They can expect my full support.

Today Port Dundas is best known for its distillery and bottling plant. However, in 1811, when the first distillery opened, the whisky industry was only part of a vibrant industrial scene. Port Dundas was built at the end of the 18th century as a terminus of the Forth and Clyde canal, and until the Clyde was deepened in the mid-19th century it was Glasgow's premier port. In 1825 alone, almost 100,000 tonnes of goods were brought into the city via Port Dundas and passengers were regularly transported along the canal from Port Dundas to far-distant locations such as Edinburgh.

It is clear, therefore, that when Daniel McFarlane established his distillery at Port Dundas in 1811, it was already an important industrial port for Glasgow. Over the years, ownership of the distillery and the cooperage has changed many times and the buildings have been rebuilt, most notably in 1903 after a major fire, and renovated on several occasions to bring them up to date and make them fit for purpose.

So when a new gas compressor was delivered to the distillery in June, it seemed that the process of upgrading was continuing in the present day. It also seemed to give truth to what the workforce was told last year, which was that there was still demand for the spirit that they produced. In fact, demand was increasing.

As a result, the shock of the workers at the announcement of 1 July was very real. After all, they had been co-operating with Diageo and had negotiated a series of changes to their conditions to help to keep the company profitable. Given that it was not revealed to anyone in advance and indeed was made after the Parliament had adjourned for the summer recess, the announcement, which led to the mothballing of the gas compressor, really took the workers by surprise.

We have rehearsed in the chamber the reasons why we believe Diageo to be wrong and why we believe that the closure of the Port Dundas and Kilmarnock plants should not go ahead. Indeed, Mr Swinney outlined those very reasons this morning. I want to concentrate on one particular issue that affects Port Dundas.

We know that the demand for whisky is increasing; that markets such as India and China have huge potential for the sale of all spirit-based alcohol; and that Cameronbridge will not come on stream for another two years. What we do not know is why Diageo has rejected out of hand the sensible suggestion made first by the trade unions and then by the task force that Port Dundas should be given a stay of execution until Cameronbridge is up and running. If the company is correct in its prediction that it needs about 175 million litres of spirit a year, the closure of Port Dundas at this time will leave it 30 million litres short until Cameronbridge opens. Of course, Port Dundas produces 40 million litres of spirit a year. If the Indian and Chinese markets develop as predicted, with India alone potentially looking for an additional six million cases of whisky per annum, Diageo might find itself unable to take advantage of that growth in the years ahead.

Given the loyalty and commitment shown by the Port Dundas workforce over many years, the least that Diageo could have done was listen to the reasonable, valid arguments that were being made by the very people who have made the company the world leader that it is. When I met management officials in July to be told very clearly that Diageo would close Port Dundas—no ifs, no buts—I must admit that I was very surprised, given that the consultation period had just begun.

I was therefore delighted when, a couple of weeks later, I heard senior officials from the company say clearly in an interview on the BBC that they were open to suggestions and that they would consider alternatives. However, given their reaction to the task force report, it appears that, when they spoke on the BBC, they were simply saying what they thought the television audience wanted to hear.

As members have said, if Diageo presses ahead with the closure, it is important that the Scottish Government continues to work with the trade unions. I was pleased to hear Mr Swinney's remarks on that in his opening speech. It is also important that Mr Swinney tells us what the Scottish Government will do to ensure that Diageo meets its obligations to the workers and their communities. Diageo must not be allowed to shirk those obligations.

I reassure Patricia Ferguson that I intend to take seriously Diageo's obligation to contribute to regeneration at Port Dundas and Kilmarnock. She rightly marshals the argument that the company has an obligation given the many years of commitment from the workforce. The Government wants to hold it to that.

I am grateful to the cabinet secretary for that intervention. I hope that Diageo takes the issue as seriously as he does.

I say to Derek Brownlee that the closures have a real cost. There is a cost to the local communities and to everyone who is involved at Diageo. There is also the onward cost to the Scottish Government and the two local authorities that are involved, as they try to find alternative employment opportunities in the areas. I hope that that will be taken seriously and I hope that Mr Brownlee and his colleagues will consider that, too.

Will the member take an intervention?

The member is concluding.

Questions must be asked about Diageo's commitment to Fife. It would be appalling if full-time posts with reasonable salaries were replaced by low-paid jobs on temporary or even day-to-day contracts. I hope that that will be taken seriously, too.

Throughout the campaign, the workers have shown determination and dignity, which does them great credit. It has been an honour to support them thus far and, like Willie Coffey, I will continue to do so. Willie Coffey was right to talk about the history of Johnnie Walker. It is a proud history, as the histories of Kilmarnock and Port Dundas show.

I am sorry, but the member must wind up.

It is right that the Parliament has the opportunity to show its opposition to Diageo's plans and I hope that we will do that at 5 o'clock today. However, is it not a shame that a company that is as big and successful as Diageo should be content to be remembered for ending the whisky industry in Kilmarnock and Port Dundas?

I indulged the member because of her constituency interest, but we do not have enough time for everybody to get their speaking allocation. If everyone overruns, even by quarter of a minute, the final speaker will get virtually no time at all. Members must stick rigidly to the time limits.

Diageo's proposals for closures and job losses in Glasgow and Kilmarnock have thrown up many challenges for all those who have done all that they can to save a future for workers in our communities. The issue has also thrown up a huge challenge for people elsewhere. That is certainly the case in Fife, where there is a real prospect of an increase in Diageo's workforce as a result of the closure of the Port Dundas and Kilmarnock sites. That has placed workers, unions, communities and politicians in Fife in an invidious position. No one wanted to be seen as promoting jobs in one community at the expense of misery in another. I am pleased that that has not happened. Of course, it is only natural for people in Fife to welcome the job creation and expansion in their area, but the workers, unions, communities and politicians there have seen the bigger picture. We have not been pitched against one another in our struggle for jobs; rather, we have remained united across party-political lines and across regions.

We must all remember that, although we are discussing proposals that affect communities in Glasgow and Kilmarnock today, it could be other members' communities tomorrow. I need not look very far to illustrate that. For instance, job losses are pending in Livingston. I wish Angela Constance MSP and the workers who face unemployment as a result of the Bausch & Lomb closure my best in attempting to protect jobs. We must remain united and ensure that we support jobs in our communities wherever and whenever they are threatened, whether that is in Glasgow, Kilmarnock, Livingston or Fife.

Much has been said about the efforts to save the Diageo jobs. Although the occasional comment might have been out of step with the united efforts, by and large, people in the task force and beyond have remained united and solidarity has been shown. I pay tribute to all those involved. I note that there is no Labour amendment, and I very much welcome the joint approach from Scotland's two main parties to dealing with job losses. It is absolutely vital that the Scottish National Party, our party of Government in Scotland, and Labour, our main Opposition party, stay united in our efforts to support Diageo workers and to mitigate the effects of the looming job losses. Dealing with those job losses is not about politicians; rather, it is about the workers, the unions and the communities around Port Dundas and Kilmarnock, who need our continued help and assistance. I am encouraged that the motion speaks about supporting the continued work of the task force, as that is vital.

I strongly welcome the fact that the trade unions are actively attempting to extend the life of the Port Dundas site beyond the closure date that Diageo proposes. I urge Diageo to review its proposed closure date and to give real consideration to the possibility that Cameronbridge will not be fully up and running by that time. I ask Diageo once more to review the risk of centralising much of its white and dark spirit distillation in one location, with a view to buying any shortfalls on the open market. A market upturn in sales or an unforeseen problem with the centralised distillation facility could leave Diageo seriously exposed in meeting spirit demand. Even at this late stage, an extended lifespan for Port Dundas might be not only socially responsible in relation to the Glasgow workforce, but prudent for Diageo in business terms. I welcome the Scottish Government's continued support for the unions in their efforts to press Diageo on that.

I pay massive tribute to the workers and unions, who, for example, showed a willingness to demonstrate wage constraint way before the prospect of closure was on the horizon. Workers and unions were already responding to challenging times, because they were realistic about the need for change, but also committed to Diageo. John Swinney has outlined how the task force closed the value gap between Diageo's plans for closure and the task force's alternatives. I have said before in the Parliament that Diageo must get the balance right between maximising its profits and meeting its social responsibilities. If that balance is not struck, we have unfettered capitalism, which benefits no community in Scotland or anywhere in the world. I believe that Diageo has got the balance wrong with the closure, but it must now ensure that it meets its social responsibilities by assisting with regeneration in the affected areas. I pledge to do all that I can to assist in Port Dundas. The site has a prime location, just north of Glasgow city centre and set above the M8 motorway. Whatever the future for the site, whether commercial, residential or mixed use, we must ensure that jobs are created for the local community and that the community is consulted on the plans.

I reiterate my strong belief that the unions still have an incredibly good case for extending the life of the Port Dundas distillery. Diageo has nothing to lose and everything to gain by doing that. As other members have said, the longer the site remains open and workers are employed there, the greater the opportunity for the task force and the Scottish Government to reskill workers and diversify employment in the area. I pay tribute once more to all who are involved in the campaign. I have been proud to be part of it and I will continue to help the communities and workers in my constituency who have lost out.

Our thoughts are with the workforce at the Diageo sites in Kilmarnock and Port Dundas in Glasgow and their families. We support a robust strategy from the Government to help those who face redundancy. In Kilmarnock, the local MP, Des Browne, is calling for a recovery plan for the area. I hope that the Government will make available appropriate resources to support such a plan. I was pleased to hear the cabinet secretary's commitment on that this morning. It is important for Diageo's reputation that it commits to supporting regeneration activities in the communities that it is leaving behind. As other members have said, it is also important that members and others stay united when there is a threat to any community in Scotland.

Given the scale of the proposed job losses, it would have been in order for Diageo to alert the Scottish Government to its plans in advance of its announcements.

As an MSP who is concerned about employment throughout Scotland, I commend the trade unions Unite and the GMB on their determination and commitment to intensify their campaign to save jobs throughout Diageo's Scottish operations. Unite has called for a detailed financial audit of Diageo's trading performance to justify cuts. Scottish Labour is working closely with the trade unions to get agreement from Diageo to grant the Port Dundas plant a year's stay of execution, which surely makes sense to all parties.

Both trade unions are angry that Diageo announced the closure of the Kilmarnock and Port Dundas sites before the end of the 90-day statutory consultation process. As a Fife MSP, I urge Diageo to comply with the trade unions' demands for an extension to the consultation and I support them as they continue to fight for every possible alternative approach to the closure. The company was wrong to announce the job losses without engaging in proper consultation with the trade unions.

Although those job losses have implications for workers at the Leven site, the £86 million investment to expand the Leven package is the latest in a series of investments by Diageo to expand the Cameronbridge distillery in Fife. Cameronbridge has received £40 million of investment over the past two years, and last year it was announced that the company will create a bioenergy facility to ensure that Cameronbridge meets the highest environmental standards. Production of that green energy plan has built on the momentum for clean energy and supports Scotland's ambitious climate change targets. The investment will also support 100 local construction jobs over the next three years, which the whole Parliament will welcome.

Fife has shared the pain through its experience of the reduction in its whisky industry, of which there are many examples. Even with the new investment, there will be fewer jobs in the whisky industry than there have been over the past 10, 15 and 20 years. As a member of the Economy, Energy and Tourism Committee, I look forward to discussing the future of that important industry.

The Diageo investment is a boost for the people of Levenmouth. Levenmouth, which has a population of 38,000, has the highest rates of unemployment and numbers of people claiming benefits in Fife. It has been called the sick man of Fife. More children in Levenmouth live in single-parent families and receive free school meals than elsewhere in the region, and Levenmouth has the highest mortality rate and lowest life expectancy in Fife. Fewer people in Levenmouth own their home or a car than elsewhere in the region. The prospect of employment in the town will have a significant impact on the community's health and wellbeing. The cabinet secretary claimed that the work of the Diageo task force safeguards, and will continue to safeguard, economically fragile and at-risk communities. That is very important for all the communities that we have mentioned this morning—the point cannot be overstated.

Levenmouth has struggled economically since the closure of its mines, and employment is key to improving the lives of people in the area. Not only is there an opportunity to restore a higher level of employment to one of the most economically depressed areas of Fife, but there is a promise of job security for those already employed by the area's last significant employer. Central Fife has the third-lowest average wage of any constituency in Scotland, and if the Diageo investment can restore some financial security, it will be welcome.

As my colleague Patricia Ferguson and others have said, it is important that the company dispels the rumours that nearly half the prospective jobs in Leven will be temporary or short-term contracts, which will provide no security for workers and no compensation when their contracts are terminated. I call on Diageo to confirm that the new jobs will be high quality, full time and permanent. That will guarantee the local community's confidence and allow the company to make the most of the investment. I also call on Diageo to work with the trade unions at the Leven plant to ensure confidence in the future.

To support the new employment opportunities at Diageo, the priority must now be to improve housing and transport connections to the Levenmouth, which suffers from poor road and rail connections. I ask the Scottish Government to support local campaigns to upgrade the Redhouse roundabout. The interchange is vital to Levenmouth and the wider Fife community. I urge the Government to reconsider the upgrade submission, support the additional 400 jobs in Levenmouth and what I hope will be continued regeneration, and help people in Levenmouth to break down the barriers in the cycle of deprivation.

There was no dancing in the streets of Leven last week when the news came through that Diageo's plans to locate 400 jobs in the area were to go ahead. As we have heard, that part of Fife knows all about job losses caused by industrial restructuring. Levenmouth saw hundreds of jobs go when the pits closed and more recently when the oilfield platform fabrication yard at Methil came to the end of its business life.

Diageo's local workforce at the Cameronbridge distillery and the Banbeath bottling plant were, of course, pleased that the company showed confidence in their skills and loyalty, but all were aware that their good fortune meant 900 jobs going at Kilmarnock and Port Dundas in Glasgow, with the heartbreaking consequences for the families involved. All recognised how devastating that blow must have been. I pay tribute to those members in the chamber who have represented so passionately their constituents in their communities, in this debate and elsewhere.

I am encouraged that Diageo has said that it is willing to work with the Government to mitigate and minimise the impact and to help to regenerate the communities involved. There will be social consequences of Diageo's decision, and the company must react to its social responsibilities. Although I appreciate how difficult it is for families to uproot, I understand that Diageo is determined to prioritise applications from workers who are willing to move from the west to the expanded Banbeath plant at Leven. The local authority, Fife Council, is fully aware of the likely housing needs in that respect.

Ross Finnie gave an eloquent speech in Willie Coffey's recent members' business debate in which he talked about loyalty and companies' responsibility towards their employees. I agreed with much of what he said, but as a trained accountant, Ross Finnie will also recognise that in the ferocious world of global competition, no company can continue to embed inefficiencies in its operation. Ross Finnie stressed that the important word is "sustainable". It is interesting that Diageo used exactly the same word in responding to the task force's alternative proposals. It was important that the task force was set up and that its alternative vision for the Kilmarnock and Port Dundas operations was presented to Diageo. The proposals were considered, including the offer of a greenfield site at Kilmarnock, but Diageo decided that the alternative proposals were simply not economically sustainable—there is that word again.

Diageo has social responsibilities towards its workforce, which include a responsibility to its remaining 4,000 employees in Scotland, who comprise two out of every five people who are directly employed in the Scotch whisky industry.

Diageo is the world's premium drinks business, trading in more than 180 countries worldwide. Although whisky is important, it is only one of the drinks that the company produces—its other products include vodka, gin and rum, as well as beers and wines and ready-to-drink beverages, many of which are distilled and bottled at the Cameronbridge and Leven facilities in Fife.

It cannot be said that Diageo has starved its Scottish operation of funds. More than £500 million has been invested over the past five years, including, as we have heard, £86 million in its distilling and packing businesses in Fife, which are scheduled for a further £100 million investment. The company has made it clear that it sees its highly motivated Levenmouth workforce as a major asset, and in turn the workforce regards Diageo as an excellent local employer.

The company cannot be accused of ducking its responsibilities when it comes to sustaining a viable business and large numbers of jobs in Scotland as a whole, especially in the teeth of a global recession. As Diageo has stressed, it has never sought public funding for its proposals and believes instead that public moneys should be directed to the economies of Kilmarnock and Glasgow, although I accept fully that that will be scant consolation to those who are due to lose their jobs in the west. I urge the Government to renew its efforts, along with the local authorities and other stakeholders including Diageo, to pick up the pieces and help to regenerate the communities of Kilmarnock and Port Dundas as quickly as possible.

However, had the task force proposals been accepted, there would have been a real risk of placing the future of the company's white spirit business at Levenmouth and jobs elsewhere in Scotland in jeopardy.

Will the member give way?

I am sorry; I am on my final paragraph.

The company rejected the proposals and claimed that they did not provide a sustainable business model that would be good for Diageo or Scotland. On the facts as we have them, it is difficult to disagree with that assessment.

I start by expressing my sympathy for the workforce at Kilmarnock, who now face the possibility of redundancy or transferring to Leven. I am aware that a statutory consultation is on-going between the company and the unions, which has yet to run its course

It is ironic that the one area that will benefit from the news of the closure of the Johnnie Walker plant in Kilmarnock is my constituency of Central Fife, because it is the one area that understands the devastating blow of the closure of that plant. In the village of Markinch, where I live, we understand only too well what it means to lose an iconic brand. In 1983, when the Distillers Company Ltd closed the Haig bottling plant in Markinch, 340 people were made redundant and 220 workers were transferred to Leven.

Last year, many members travelled by train to Markinch for the Glenrothes by-election. They cannot have failed to notice the red brick buildings beside the station, which used to house Haig's. Indeed, the Liberals and the Conservatives had their campaign headquarters in the old Haig's building.

Markinch is a village of fewer than 3,000 people. Haig's had been on the site in Markinch for more than 100 years. Nearly every household in the village had at least one person who worked there. When the Haig brand moved from its home in Markinch, we, too, knew the real effects—economic and emotional—of an iconic brand being moved from its home.

Around the same time that Distillers closed Haig's, it also removed 11 of its malt whisky distilleries in Scotland. The MP for the area, Willie Hamilton, and Harry Ewing MP, who spent most of his life in Leven—and who sadly died last year—managed to secure an adjournment debate in the House of Commons on 4 March 1983. I urge members to read the Hansard report of that debate, because, like me, they will be amazed to see that the arguments that were used against Distillers are identical to those that have been used in the Kilmarnock campaign against Diageo today. Those arguments are about the lack of consultation and social responsibility and the company walking away from an iconic brand.

The rationalisation of the whisky industry in Scotland did not begin with Diageo; it has been going on for a long time. I know that the task force and the local MSP Willie Coffey and Des Browne have worked hard and will continue to do so to ensure that a climate is created that will attract new employment to Kilmarnock. I recognise the huge challenge that that presents, but I am sure that those involved will not stint in their efforts to overcome this blow to the communities.

I welcomed the original decision and the final decision by Diageo to invest £100 million in Leven. As has been said, Levenmouth is an area of high and long-term unemployment; it has never recovered from the pits being shut down. However, I have great hopes for the energy park in Methil. Diageo is undoubtedly Levenmouth's largest employer. It has already invested heavily over the years in Leven and Cameronbridge. The whole of the UK white spirit industry, including Gordon's gin, as well as grain whisky is produced at Cameronbridge.

Haig's took over the Cameronbridge distillery in 1822, but there had been a distillery on the site for a number of years. Cameronbridge was the first distillery in the world to produce grain whisky.

I was delighted when Diageo announced that it intended to build a £65 million bioenergy plant at the distillery. It is a matter of pride to me that the oldest grain distillery in the world is now at the forefront of renewable technology. The new bioenergy plant will generate nearly all the steam and electricity needed to operate Cameronbridge. It will result in 56,000 tonnes of CO2 being removed from the air, which is the equivalent of removing 44,000 cars from the streets of Scotland. More important, it will result in a huge saving in energy costs. That investment has enabled Leven and Cameronbridge to compete world wide.

I know that I did not make myself popular when I argued that the investment that Diageo had earmarked for Leven had to continue. It was my view then, and it is my view now, that if the investment does not go into Leven, the long-term future of Leven will be put at risk. I do not regret what I did.

It is imperative that Future Skills Scotland and others work with the people of Kilmarnock to provide training and reskilling. However, it is a fact that the new jobs in Leven present a once-in-a-generation opportunity for the area. As others have said, it is an area of high unemployment, with people living on benefits, and has the third-lowest average wage of any constituency in Scotland.

I ask the cabinet secretary, once it is clear—

I am sorry, but the member's time is up.

I worked in the shipbuilding industry during its difficult decline, was made redundant and served a period of unemployment. I now represent a community that is well aware of the consequences of losing a major employer, or a number of major employers, and knows all the pain of being overdependent on large employers in shipbuilding, engineering, electronics and, now, the service industry.

I also worked for a number of years as a trade union organiser in the whisky industry. That was a decade or more ago now, when we were dealing with the problems of overcapacity and overproduction. At that time, we had great bragging rights about who got the best wages—Chivas, Johnnie Walker, Hiram Walker or Cutty Sark at Drumchapel. We believed that we were in an internal market, but of course we were not; we were competing with those companies' bottling plants in the Philippines and elsewhere in the world.

When Diageo took over, it won the argument and the J&B plant in Dumbarton in which I organised closed down with a loss of about 400 jobs. Given my experience, I have every sympathy with the people in Kilmarnock, because I know at first hand the challenges that they face individually and as a community.

Over the years, if I have learned anything it is that change is inevitable. Whether we live in an independent Scotland or a Scotland that is part of the UK, under any Government change is inevitable. We as politicians have to recognise—as I did as a trade union official and as an individual in the past—that our role is not necessarily to prevent change but to manage and facilitate it over a period of time to ensure that the least damage possible is done to workers and their communities.

I do not blame MSPs and MPs for fighting their corner for their constituents. Willie Coffey has done well, as have Des Browne and others. They are elected to articulate the anger and frustration that their communities feel. I do not blame the First Minister for being angry with Diageo for its poor communication. I do not blame them, because I have been there and done that. However, I am concerned about the damage that might have been done to the relationship with one of Scotland's most significant employers. That needs to be addressed. I am concerned about the message that is sent to other employers, which might be dissuaded from engaging with the Government and its agencies on what they need to do to change to equip them for the future, as a result of the negativity surrounding the Diageo decision. After all, we all recognise that it is not a popularity contest. It is not a competition to see who cares most about the workers who are affected. Those people deserve better than that. Honesty is hard, and there will be no cheers at the end of this process for doing the right thing. The very least that the workers deserve now is honesty.

For the past few months, we have all collectively tried to hold the waters back, but, in the end, the reality defeated the rhetoric. Now we have to face facts and learn lessons from that experience. That means being honest about what a Government—any Government—can achieve and what we can deliver politically. We need a clear and consistent approach that we can apply anywhere, every time a company or a sector faces challenges, no matter whether it is big or small, urban or rural. We need to establish confidence in that approach, with a clear policy that encourages companies to come to us early, not at the point of crisis, after a decision has been made. We need to understand and respect the needs of companies to grow, survive and be competitive, as well as to meet their social responsibilities. Instead of becoming sidetracked with what we cannot deliver for people who are losing their jobs, we need a process that is committed to what we can deliver. That means adequately funding and resourcing partnership action for continuing employment and supporting people, not to save people's jobs but to get them their next one.

I apologise to the minister for mentioning this again, but at HEROtsc—a contact centre in Greenock that shed more than 150 jobs earlier this year—I was concerned about the level of support that was provided to the employees who lost their jobs. It is not clear whether additional resources were assigned to that situation or whether the intervention was successful. With the prospect of significant change facing 700 workers at T-Mobile, I repeat my call to the Government to engage with the call centre industry before it is, once again, too late.

Despite my reservations, I believe that the PACE approach is a good one. However, we will get out of it only what we put into it. It must be not only a response mechanism but a delivery mechanism. Employers, businesses and communities need reassurance that there will be support, that similar or better jobs will be provided, and that communities will be protected from the impact of difficult decisions. How we reacted in the past few weeks was how we reacted 20 years ago to mass unemployment.

Along with other members, I marched in Kilmarnock in 1983 with shop steward Duncan McNeil against the closure of our local shipyard, which resulted in the loss of 7,500 jobs.

Much of the debate has, quite properly, been devoted to highlighting the immediacy of the problem facing Kilmarnock and Glasgow, and the very real difficulties in Levenmouth. I want to spend the few minutes that are available to me reflecting on the kind of economic debate of which we in Scotland should be a part. The Liberal Democrats make no apology for raising the issue of sustainable economic development. I will come to what that means in the context of the recent decision.

Sustainable development is not a new concept. Indeed, it would be interesting if large international firms looked up the definition that is most commonly accepted, which is in the 1987 Brundtland report. The report defines sustainable development as

"development that meets the needs of the present without compromising the ability of future generations to meet their own needs."

That concept is not new to the Liberal Democrats. The 17th century Liberal philosopher Locke wrote extensively on the responsibility of politicians to act as trustees for their communities, and on their need, as trustees, to hand on that community in the state in which they inherited it.

The aftermath of the Diageo decision, combined with the current economic recession, makes it timely for us in Scotland and in the Parliament to ask what kind of economic development we wish to promote. In the same way, we ought to be debating the kind of financial institutions and regulatory framework that we wish to support and promote.

I stress that the Liberal Democrat amendment is not an attack on Diageo per se; the point is simply that Diageo's economic model is typical of many international companies that pay scant regard to the imperative to embrace the principles of sustainable economic development. As Ted Brocklebank ably pointed out, many companies use the word "sustainable" selectively, without regard to its meaning. Sustainable economic development does not embed inefficiency. It does not prevent companies from making necessary changes. It does not stop technological progress and—regrettably, but inevitably—it does not stop redundancies taking place. However, it requires companies to view their economic progress as being inextricably linked with the attendant social and environmental costs. Taking that approach would effect a sea change in the way in which we approach the current situation.

Diageo and its like see those issues as something apart—someone else's problem. "We want to dump two plants and two workforces and move on. So what?"

The approach that the member has just laid out is not the way in which a company is expected to operate if it is worried about its balance sheet. Does the member accept that such an approach would require a fundamental change to our accounting principles?

I am just coming to that. I am trying to inject into the debate a sense that we need to have such a rethink, because the problem could keep occurring. Derek Brownlee made a number of valid points about having to deal with today on its own terms. Nigel Don is right—unless we change how we measure progress, we will have problems. The Diageo response is redolent of the type of thinking that has resulted in the current rate of consumption, which means that we require three planets, when I think that everyone in the chamber knows that we have only one.

I have no difficulty in accepting that the Kilmarnock plant is not as efficient as it might be, but the decision on how to make it efficient could have been based on a sustainable model. To go back to Ted Brocklebank's point, in Diageo's assessment, the plant is not—in its words—sustainable. However, as was intimated by Nigel Don, the accountants and those who measured the company's plan took no account of the social and environmental costs. Inevitably, they came to a totally different conclusion. I understand that those members who represent the most-affected constituencies do not immediately wish to engage in a long-term debate, but I hope that the Liberal Democrats' contribution today sets out that there is a need for a fundamental rethink. As other members have stated, this kind of problem recurs, and unless there is a fundamental change in our thinking, there will be no change. I commend the Liberal Democrat amendment.

Among his remarks, the cabinet secretary urged us to learn from the Johnnie Walker decision and to look to the future. We must consider that the decision has arisen from Diageo following a consolidation agenda.

In 2007, Diageo announced the investment of hundreds of millions of pounds in a huge new malt distillery at Roseisle on Speyside and in the development of Cameronbridge and Shieldhall, but that was before the world recession. At a time of flattened demand, there is a difference between the sales progress of white and brown spirits. As Wendy Alexander said in the Economy, Energy and Tourism Committee:

"The issue then was the loss of brown spirits to white spirits—demand was growing much more quickly for vodka than for whisky".—[Official Report, Economy, Energy and Tourism Committee, 9 September 2009; c 2340.]

We have to ask ourselves what Diageo's priorities are. In August, it stated that net sales had increase by 15 per cent. Smirnoff sales were up 17 per cent, Captain Morgan sales were up 29 per cent and Johnnie Walker sales were up 4 per cent. The debate must take into account the effects of Diageo's priorities on the company's thinking and on people throughout Scotland.

A farmer who lives close to me, Hector Munro of Foulis, said in a recent letter that there are

"large surpluses of malting barley in both UK and Europe plus World grain stocks"

are

"generally higher than they have been at any time in the past decade … Faced with this scenario and with no regional protection for Scottish malting barley, the vital ingredient of that iconic-branded product, Scotch Whisky",

which he grows, his business is in doubt. We need to take account of the way in which Diageo's demand for products affects people such as our barley farmers.

Diageo has a range of distilleries, including 15 small distilleries in Speyside. In volume terms, they do not add up to the production of its main competitors—Glenfiddich or the Macallan—hence the idea of developing Roseisle. Will we see a consolidation of malt whisky distilling if world demand for brown spirits continues to move more slowly than demand for white spirits?

As a Scottish distiller, Diageo needs to show sustained loyalty to the complete process of whisky distilling in Scotland. As Wendy Alexander also said at committee:

"The right analogy is with French wine production, and the real issue, which the GMB raised, is whether bottling in Scotland is compelled. Because of the influence of some of the large players in the industry, the Scotch Whisky Association does not support bottling in Scotland, which is astonishing … The big strategic decision on whisky is whether there is a move to insisting on its being distilled and bottled here. It is interesting that the trade body for Scotch whisky does not favour that position."—[Official Report, Economy, Energy and Tourism Committee, 9 September 2009; c 2341.]

This is the danger in which we find ourselves.

Can we in the Highlands and Islands expect to see consolidation in malt distilling, as has happened with grain distilling? When Guinness took over DCL, it said that it would not cut the number of distilleries. However, the question of cutting the number of distilleries in regions of Scotland and consolidating production has not been removed.

With mega-distilleries replacing the diverse regional nature of our iconic whisky industry, Diageo has to be asked what positive legacy it will leave for Scotland. Is what is good for the Diageo business model also good for Scotland? What level of value will be retained in Scotland? As a previous speaker said, that must be maximised.

I am concerned when Diageo makes statements such as:

"The company has created a flavour map to categorise whisky by taste rather than region in an attempt to demystify the drink and attract new customers."

Scotland wishes to retain the regional nature of whisky production and bottling. We do not wish to be left with a bad taste in the mouth from Diageo's business decisions.

Walking to the Parliament this morning, I found myself confronted by a huge billboard advert, the message of which was that we should all walk to work. I found it ironic that that admirable Scottish Government campaign is supported by Diageo. The message will bring little comfort to the Diageo workers who are losing their jobs. They may find that they not only have no work to walk to but no option other than to walk. Those people may not be able to afford to use their cars any more.

I was, like so many other members, enormously disappointed to hear Diageo's decision on the future of the Johnnie Walker plant. The Kilmarnock Standard summed up that disappointment in a front-page article in which it described the decision as a

"knife in the heart of Kilmarnock".

It is hard to describe the mood in the town. As Willie Coffey knows well, the people from throughout the community who worked so hard on the campaign to save the plant are now looking for a lead on how to move forward. I thank the trade union Unite, of which I am a member, and the other trade unions for their campaigning efforts in joining together with the wider community in opposition to the plans. The issue has united the town. As we go forward, I am sure that people will unite again to try to secure a positive future for Kilmarnock.

John Park spoke about the negotiations and the approach that was taken. I do not want to attribute blame or criticism: too many people have worked too hard for politicians to start throwing mud at one another. There are situations in which rousing speeches and hard-man tactics get results—as a trade unionist, I know that—but there are other times when negotiation, patience, quiet diplomacy and hard work are required. In that regard, I praise the local MP, Des Browne, Willie Coffey as the local MSP, and the cabinet secretary for the roles that they played in attempting to secure a positive outcome.

A similar effort will now be required to minimise the blow to Kilmarnock and the wider Ayrshire economy. Over the past 20 to 30 years, the community has had to endure a huge amount of change. The scars of that change can still be seen. Anyone who was, as I was, born and brought up in Kilmarnock knows the impact that the loss of all the major industries has had on the town and the wider Ayrshire area—we are talking of communities that are still trying to rebuild following pit closures. There is a need for urgent action to ensure that that part of Ayrshire does not again see unemployment statistics such as were common only 15 years ago.

Des Browne is calling for a Kilmarnock recovery plan, the aim of which would be to avoid the town's becoming an unemployment black spot. I believe, given the industrial decline that Ayrshire has had to endure over recent years, that such a package is both necessary and appropriate. I ask that the plan be set in the context of tackling the wider industrial decline, particularly in the former coalfield areas, which are still suffering from pit closures and so forth. On 11 February 2009—following the Vesuvius UK closure—Jim Mather, the Minister for Enterprise, Energy and Tourism, told Des Browne that he would chair a pan-Ayrshire economic meeting. In his summing up, I ask the minister to explain what is happening on that proposal and how it is being taken forward. People in the area feel that if Scottish Government ministers were prepared to fund Diageo to stay in Kilmarnock, they should now ensure that that cash is put into helping the workforce and the local economy, including the small businesses that will be affected by the closure.

In the 3 September debate on Diageo, I said much about the company's actions; my view has not changed one bit. I believe that its handling of the situation has been a disgrace from beginning to end. It has callously disregarded a loyal workforce and community. The success of the Johnnie Walker brand was achieved on the back of the hard work and commitment of that workforce. There is a danger is that the Diageo brand has been tarnished.

I welcome the plans to hold a committee inquiry. My constituency includes other whisky interests—firms that are ensuring that they invest in and support local jobs. We should look at ways of supporting those firms in the future.

We have heard much about the need for Diageo to look to its social responsibility. As I suggested at the start of my speech, Diageo may put its name to worthy billboard advertising campaigns, but that is not enough. The sustainability of communities requires investment, including in their people. I was pleased to hear the cabinet secretary say that he wants to ensure that Diageo is held to what it says about its social responsibility. Do we have any more detail on what Diageo plans to do?

We have to move on, but in doing so we must not move away from supporting the people who are affected by the closure. As we rightly debate the subject, including the wider economic issues, workers in Kilmarnock and Port Dundas are worried about how they will pay their mortgages and bills when the closure comes. We must do everything we can to support the trade unions in their fight for the best deal for those workers.

In 1820, using the proceeds of the sale of his family farm, Johnnie Walker—recently orphaned and aged 14—sets up a shop dealing in groceries, wines and spirits in Sandbed Street near Kilmarnock Cross. He begins to blend whisky on the premises and, over the coming years, the business concentrates increasingly on the sale of wines and whisky.

Fast forward to 2009, and we find that Johnnie Walker whisky is still in Kilmarnock, that it has become the number 1 Scotch whisky and that it has been a major employer of generations of local families. It is therefore not surprising that the closure announcement came as a hammer blow to the workers, support businesses and the community as a whole.

The empathy that is felt in the town and beyond for those who are affected by the announcement was graphically illustrated by the public rally on 26 July, which I was pleased to join, and in which 20,000 people took to the streets in an effort to raise awareness of the issue and to keep Johnnie Walker in Kilmarnock. After the rally, everyone collectively held their breath and hoped against hope that the task force's alternative proposal, which the Cabinet Secretary for Finance and Sustainable Growth put to the company, would include a new aspect that Diageo had not covered and which might result in a reversal of the decision. Sadly, that was not the case and the closure decision was confirmed. The news has been received almost with a sense of inevitability and quiet resignation by the workforce, which recognises that although historic links are important, so are hard economic facts.

Diageo has set out the facts clearly. First, the restructuring proposal that involves the closure of both the Kilmarnock and Port Dundas sites is being implemented to secure the long-term sustainability of the company and to underpin the success of its operation in Scotland and the jobs of 4,000 Diageo workers here. Secondly, the company has 38 packaging lines and needs only 28, which can be manned on two sites. Thirdly, the alternative proposal of the task force and the Scottish Government merely embedded the inefficiencies in packaging.

Significantly, during discussions that I had with at least one rival drinks company, it was confirmed that the Diageo bottling and packaging costs, and therefore that aspect of its operation in Scotland, are not competitive. As a result, Diageo made it crystal clear that it could remain in Scotland with a successful operation only if it had a cost-effective manufacturing base, through the proposal to create new jobs at the Leven plant and to close Kilmarnock and Port Dundas.

It is worth taking stock at this point. Clearly, shock at the announcement of the closures and disappointment at the realisation that the Kilmarnock and Port Dundas jobs could not be saved have triggered some raw emotion. That is entirely understandable in the circumstances, but some of the language and comments from politicians and others about Diageo have been intemperate, ill advised and, ultimately, counterproductive. There has been much talk and not a little political muscle flexing, with various parties—including, I am sorry to say, the First Minister—stating that Diageo would not be allowed to walk away from Kilmarnock. In fairness to the company, I understand that it was acutely aware before its decision was taken of the horrific impact that its decision would have on the local economy. For that reason, its focus was on doing everything in its power to support efforts to mitigate the economic impact of the losses.

If the company was so concerned about the impact of its decision on Kilmarnock, why did it not tell the workforce in advance?

I am coming to that very point. Although the company understood that the decision would be challenged and that other proposals would be put forward, in its mind every base had been covered and the period of uncertainty was merely adding to the stress and agony of the job losses and detracting from its efforts to find alternative solutions. For that reason, Diageo ensured that Johnnie Walker workers did not hear the news of the job losses on radio or television, but first hand from the Diageo management.

Criticism of the company for not discussing the closure proposal with the First Minister or the Cabinet Secretary for Finance and Sustainable Growth fails to take account of the fact that Diageo is an international company that competes on a global scale and which must take unpalatable decisions to keep that status. In other words, the company is not looking for a handout from the Government or turning to politicians for solutions. Phrases such as "throwing the workers on the scrapheap" and the cabinet secretary's statement that he still does not

"believe that Diageo appreciate the social consequences of their financial decision in turning their backs on 200 years of history in Port Dundas and Kilmarnock"

are unfair and unjustified. More important, they do absolutely nothing to help the workers and other businesses affected by the job losses. Furthermore, such rhetoric will do nothing to encourage other global companies to consider locating in Scotland.

It is now time for everyone to pull together and to work with Diageo. I am encouraged by the cabinet secretary's regeneration proposals. We are proud to have Diageo as a major employer in Scotland. We now need everyone to pull together in an effort to use the company and the expertise of other key players to devise an innovative and practical strategy to replace the jobs that have been lost and to attract new businesses and companies to Kilmarnock and Port Dundas. Quite simply, these loyal and skilled workers deserve nothing less.

I express my sadness, disappointment and anger at the forthcoming closures of the Diageo Port Dundas and Kilmarnock bottling plants. The closure of the latter will undoubtedly have a negative impact on many of my constituents and on Ayrshire as a whole.

As every sensible person knows—many members have reiterated the point today—the closures are outwith the control of the Scottish Government. Diageo is a private company that has made a decision based purely on corporate gain. The Scottish Government may criticise such a decision, attempt to persuade Diageo that the plants should remain open and even produce alternative proposals, through the hard work of the task force and all those across the party divides who contributed to it, but there is nothing to stop Diageo moving any of its operations elsewhere.

As Willie Coffey said, last year Diageo raked in more than £2 billion of profit during the worst recession in decades. As we have heard, such profits are due in no small part to one of its biggest-selling brands—Johnnie Walker—which is continuing to grow, and to the workforce that is dedicated to making it. However, Diageo is demanding even more.

I have been disappointed by the speeches of some Conservative members, who have repeated the myth that the Kilmarnock plant is not cost effective or efficient. If the plant is not efficient, that can only be the fault of the company for failing to invest some of the huge profits that it has made over many years in continuing to stay ahead of the game. Given that Johnnie Walker is the world's best-selling whisky, I fail to see how the argument that the plant is inefficient and that Diageo must be competitive can be sustained.

The jobs in Fife are welcome, but they offer little solace to the people of Ayrshire and Glasgow who are directly affected by the closures. Jobs losses will not be limited to direct employment: jobs in ancillary industries and in the wider economy, from retail to transport and recreation, will all be adversely affected. Three quarters of the job losses will be indirect, because every person who is directly employed in the whisky industry supports at least three other jobs.

I agree with much of what Kenneth Gibson has said. Given his criticism of the Conservatives, does he accept that even the task force report said that the Kilmarnock plant is inefficient? That is why it suggested that a new plant be built on a greenfield site, which would still have necessitated some job losses in Kilmarnock.

The important point is that the bulk of the employment would have remained in Kilmarnock. I pay tribute to the task force for its hard work. It presented ideas that would have turned around the situation, to the ultimate advantage of both the company and the workforce.

I agree fully with the many members who have said that Diageo must mitigate the closures' impact on the workforce. In contrast to Derek Brownlee or Iain McMillan of the Confederation of British Industry, I do not believe that a Scottish workforce fighting for its jobs discourages inward investment. A nation with a bit of smeddum is likely to be more dynamic and productive than one that meekly accepts whatever comes its way. I agree with Robert Brown that the likelihood of changing the minds of Paul Walsh and company may always have been small, but it was important that everyone did what they could to engage with the company. Unfortunately, as John Park highlighted, even from the beginning the company did not keep its workforce fully informed of its proposals, which is to be deeply regretted.

For many years, Ayrshire has suffered economic decline relative to the wider Scottish economy. We have heard about pits in Fife, but pits in Ayrshire have also closed and much of the county's manufacturing has been lost in recent decades. To make Ayrshire more attractive to employers and to stimulate economic growth, we need to invest more in its infrastructure and skills. The Johnnie Walker closure will reverberate around the entire county. I am therefore pleased that the cabinet secretary will press Diageo to honour its obligations to the workforce.

In his eulogy to Diageo, Ted Brocklebank did not mention its lack of real consultation of the workers concerning its intentions, which shows the lack of a moral dimension to the company's approach. I hope that it will learn from that. Ross Finnie again made a significant contribution, as he did in the members' business debate on the subject. Corporate greed, rather than competition, appears to have been Diageo's priority. Such decisions make it difficult for companies' supply chains and others to know where they are from year to year, as was highlighted by Rob Gibson. One might also argue that the company abandoning its Kilmarnock heritage could adversely impact on its profits, given the support from around the globe for the campaign against the closure.

On 14 January last year the Minister for Enterprise, Energy and Tourism, Jim Mather, held an economic summit in North Ayrshire, which I helped to organise. I am sure, as Cathy Jamieson has said, that another summit—this time, a pan-Ayrshire summit—is needed to examine how we can take the Ayrshire economy forward following the sad news.

By this point in the debate, many significant and important points have already been made by colleagues across the chamber. The clear point that I feel is worth repeating on behalf of the workers is that Diageo cannot be allowed to walk away from its responsibilities: Diageo owes the people of Kilmarnock and Ayrshire and the workers at Port Dundas a debt and a concerted effort must be made by everyone to restore confidence to those areas.

My constituency, which borders Willie Coffey's, has one of the highest unemployment rates in Scotland, which will be exacerbated by the Diageo job losses. Figures indicate that about 70 to 80 members of the workforce live in Cunninghame South.

As others do, I have deep concerns about the wider implications. Clearly, supplier industries will need to consider carefully how they can sustain employment in the absence of Diageo. Ardagh Glass Ltd in Irvine is one of Diageo's major suppliers, so I ask the minister to consider carefully what measures might be taken to ensure that the knock-on effect on suppliers in my constituency is carefully kept under review, with support being provided where necessary. I wonder where the minister is at the moment, to take on board that point.

I will say a few words about future interventions, initiatives and Government action. We all recognise that there is no quick fix and that the affected communities will need long-term support. The Kilmarnock recovery plan is a very good start and is to be supported. I also support the idea of a further Ayrshire summit, which I hope will encourage stimulus to be extended to fragile communities throughout Ayrshire.

In my area, the Irvine Bay Regeneration Company is well placed as a vehicle for creating new business infrastructure to attract investment and create much-needed employment opportunities in Ayrshire—North Ayrshire, in particular. The Government and Scottish Enterprise have roles to play in assisting that work. Opportunities could arise from proposals to provide new modern office and business space at Annickbank in Irvine. Riverside business park also needs to be revamped, rejuvenated and made fit for purpose. I know that the minister has been in the area, so I hope that he recognised that need. I also hope that he will recognise that such proposals need to be not just supported but financed.

Business infrastructure will be affected and influenced by transport infrastructure. I therefore again draw to the minister's attention a letter from the chief executive of North Ayrshire Council, which states:

"The A737 is recognised by the Council, its partners and importantly the business community as the single most important piece of investment required to improve confidence in the economy of North Ayrshire."

I ask the Scottish Executive to make a commitment to ensure that the resources are made available to undertake that work, thereby sending a very clear message to the people of North Ayrshire that the Scottish Executive has confidence in the local economy.

I wish to raise with the minister the issue of the European globalisation adjustment fund, whereby €500 million is set aside each year to assist workers in Europe where a clear link can be made between job losses and the effects of globalisation. Workers across Europe can benefit, and have benefited, from the fund. Thanks to robust lobbying by the European socialist group, including me, the qualifying threshold was recently reduced by the European Commission from 1,000 job losses to 500. I am certain that we have sufficient creative civil servants and politicians who could examine the criteria and assist in preparing a case. The money may be used for retraining, job searching and temporary income supplements to assist older and disadvantaged workers in particular to remain in, or to return to, the labour market. I urge the minister to explore whether and how Diageo workers might benefit from the fund.

Actions can be taken by Government and other agencies to encourage and support local economic development in the face of the tragedy. The extenuating circumstances demand action that is appropriate to the scale of the challenge that we in Ayrshire now face. The Diageo workers and unemployed people in Ayrshire expect and deserve no less.

This has been an interesting, important and largely constructive debate on a very sad piece of news about the jobs in Kilmarnock. I in no way condone the actions of Diageo, nor how it has handled the restructuring of its business. At the same time, I do not feel that any of us are in a position to condemn the company's final decision, which has ultimately been based on all the facts that it has to hand.

I fully understand the very strong feelings of members such as Willie Coffey, Patricia Ferguson and Robert Brown about the impact that the decision will have on their constituents, particularly where plants are being closed. It is absolutely right that those members fight for the jobs in their areas, and it is absolutely right that East Ayrshire Council, Glasgow City Council and the trade unions also fight to save jobs. I hope that they will recognise that those of us with constituents who work at Cameronbridge or in Leven must act to protect their interests, too. That is not just about potential new jobs; it is also about safeguarding existing jobs, as Tricia Marwick mentioned. In that respect, I have some concerns about the Government's handling of the issue, which I will return to in relation to some of the speeches that have been made.

Members have made some very valuable contributions. Willie Coffey strongly feels the concerns of the 700 workers at Kilmarnock—many of whom are from his constituency—whose jobs are under threat. I slightly disagree with him that the case for closure fell apart with the £2.5 billion profit that Diageo announced. Diageo is a major international company with a turnover of about £10 billion. Thinking of the old Scots phrase, "Many a meikle maks a muckle," it is not possible for a business to make a £2.5 billion profit without looking for efficiencies. If Diageo has identified inefficiencies and overcapacity, it will soon lose profitability if it does not address those issues. I am not saying that Diageo got the right answer, but it had to address those issues.

Willie Coffey and others mentioned the Economy, Energy and Tourism Committee's position on a possible inquiry into the whisky industry. I can clarify that we have not yet taken any decision to hold an inquiry into the whisky industry, but we have commissioned research from the Scottish Parliament information centre on an overview of the industry and the economic impacts of what has happened. We will consider legal issues, including those concerning bottling. We hope to identify further issues regarding the overseas market, trade barriers, an overview of the UK and worldwide spirits markets, trends in the industry and the impact of the Diageo and Whyte & Mackay announcements. Once we have received a report from SPICe, we will make a decision on whether to go on to hold an inquiry.

Patricia Ferguson drew attention to the possibility that the replacement jobs in Fife might not be full-time permanent posts. That is an issue that I am sure all Fife members will be paying close attention to. I am sure that Fife Council and others will, during their discussions with Diageo, be highlighting the need for the posts to be permanent.

Bob Doris highlighted the invidious situation for workers and politicians, in which jobs in one area are being created at the cost of those in another area. He made another interesting point that must be addressed: could centralisation of spirit production at Cameronbridge leave Diageo dangerously exposed should something go wrong at that plant?

Marilyn Livingstone raised issues around unemployment rates in Fife and mentioned that Levenmouth has one of the highest rates in the country, which has been the case for many years. It is known as the sick man of Fife. She spoke about the importance not just of creating new jobs in Levenmouth but of protecting existing ones. That is very important to us. She also mentioned the Redhouse roundabout. The Government should also consider actively supporting the Levenmouth rail-line proposal, rather than just saying it, because the line could have a significant impact on job security in the area.

Tricia Marwick talked about the long-term future of jobs at Leven, which could have been put at risk. That is a big concern that I have about the Government's handling of the situation. Although the Government rightly considered the economic impact on Kilmarnock, East Ayrshire and Port Dundas in its study, it forgot to consider the economic impact on Fife. The Government's role is to look at Scotland as a whole. It should have taken a more even-handed approach and ensured that, as part of its analysis, consideration was given not just to the economic benefits that would be gained if jobs came to Fife but to the impact on the long-term future of the Levenmouth plant and the Cameronbridge distillery should investment not come to Fife. Such issues were not addressed. They should have been.

Duncan McNeil made a valuable contribution to the debate. He expressed concern about the damage that might have been done to relationships not just with Diageo, but with other companies. The First Minister's participation in the protest march, for example, which I think was inappropriate, might discourage companies from engaging with the Government, Scottish Enterprise and other agencies at an early stage. It is absolutely appropriate for MSPs who represent constituencies to get involved, but the role of Government ministers is to engage constructively with trade unions and companies, and not to take part in public demonstrations, which might damage opportunities for proper engagement. The Government should look carefully at its role in that regard. It is not about political posturing; it is about being statesmanlike and doing what is right for Scotland. The Government got it wrong on that occasion.

We heard a great speech from Ross Finnie. It was nice to hear Locke mentioned in a parliamentary debate, and I thank Ross Finnie for that.

There is much more to say, but I am running out of time. It is important that we learn lessons from the exercise. We must consider how the Government engages with companies on job losses and ensure that we get the best deal for Scotland at all times.

I think that all members would have preferred this debate not to have been necessary. Members of all parties have expressed disappointment about Diageo's eventual decision and about the inability of the task force, which put in a lot of work, to reach an agreement with the company about a way forward.

The overriding emotion must be disappointment, in particular about the 900 jobs that will be lost in Port Dundas and Kilmarnock. The net loss of jobs will be smaller, but that does not take anything away from the fact that 900 families will be directly affected. Given the concentration of those jobs in relatively small geographical areas, there will be an effect on communities, on people who supply local businesses and on local shops. Even if local shops do not have direct links with Diageo, the company's employees will spend their money there. The net effect will be wide. There is also more than a tinge of sadness at the end of a 190-year link between Kilmarnock and Johnnie Walker. Willie Coffey made that point well.

I praise the work of the task force. I do not agree with everything that the Government did, but I think that the task force took a constructive and positive stance. There was a partnership approach, which involved all political parties. I got the impression that, around the table, sleeves were rolled up, numbers were crunched and an attempt was made to come up with a solution that the company might not have thought of. The task force was ultimately unsuccessful, and the company has said clearly that it considers the matter closed and that it is getting on with the consultation and taking matters forward. That is disappointing but, as Derek Brownlee said, we must deal with the reality on the ground.

What are the next steps? First, we need to see the UK Government and Scottish Government working together hand in hand, along with local councils and agencies, to ensure that we do whatever we can do for the communities that are directly affected. The cabinet secretary made positive comments about the role of SDI, Skills Development Scotland's seat at the table, the work of PACE and the on-going work of Scottish Enterprise to consider what it can do. Much of what he said in that regard was welcome.

Can we take action to reskill or upskill people who face redundancy? Can there be economic regeneration in the communities that are directly affected, so that a hammer blow—as Margaret Mitchell described it—in the short term does not lead to long-term decline. Tricia Marwick made a good point about what happened in Markinch after 1983; in 25 years' time we do not want Kilmarnock still to be dealing with the trouble that will be caused by the plant's closure next year or the year after.

It sounds like the Government will be doing what it should be doing in the short term, but I stress strongly to Mr Swinney and Mr Mather that the whisky industry should be considered in the long term. The number 1 issue that the industry has raised with me is its fear of minimum pricing. I raised the issue in the members' business debate on Diageo two weeks ago, and I make no apology for doing so again. The minimum pricing policy, which was announced in the Government's programme, has been considered purely through the prism of health; its economic impact on the whisky industry has not been considered in great detail.

Mr Mather will be well aware that, at the recent Scottish Council for Development and Industry conference, the industry and in particular the Scotch Whisky Association made it absolutely clear what it thinks of the proposal. I read in The Herald yesterday that the SWA predicts that minimum pricing could reduce the value of the industry by £600 million. That would represent a 20 per cent cut in the industry—[Interruption.] If Mr Swinney wants to challenge that and give me his analysis of the impact, I will be happy to take an intervention.

I am delighted to intervene. Mr Brown must recognise that the whisky industry produces a premium product and that minimum pricing is unlikely to affect any whisky production in Scotland. That undermines the analysis that he has presented to the Parliament.

Mr Brown, be careful. The motion does not mention price fixing or anything like that; it is about Diageo. Can we stick to that?

May I answer the point that the cabinet secretary made?

Briefly. You are short of time.

Thank you. As Mr Swinney knows, exports account for 90 per cent of the whisky industry. It is the export industry that the SWA is worried about.

The Government has said many good things about what it will do in the short term, when the effect on communities will be devastating. We must all pull together to see what we can do in the medium and long term.

I am pleased to sum up on behalf of Labour. I will speak in support of Mr Swinney's motion—I am glad that he is here to hear me say that, because that might be the only time in the lifetime of the Parliament that he hears those words from me.

I welcome the comments of Bob Doris—another first—about Labour not lodging an amendment. We made that decision because it is important to maintain cross-party support for the campaign. We listened carefully to what the Tories and the Liberals said, and in particular to Mr Finnie's eloquent speech about what is meant by sustainable economic development. We will reflect on the amendments before we vote at decision time.

When I spoke in the members' business debate on the matter, I focused on the Port Dundas distillery, which faces closure. Many of the people who face redundancy are from my constituency, Strathkelvin and Bearsden.

As I was preparing for today's debate, I read a briefing note that the Scotch Whisky Association provided on 2 September. Like the briefing that we had from Diageo, in which the company attempted to justify its position, the SWA briefing made interesting reading. Diageo is a member of the SWA, so I assume that it agrees with the sentiments that the trade body expressed. The SWA said that the Scotch whisky industry is proving to be resilient in the current economic global trading conditions:

"It was a difficult start to the year … However, by April-May 2009, it would appear that shipments were back in line with those achieved during a strong April-May 2008 … Scotch whisky is a long-term business and distillers are optimistic about future prospects."

Diageo was optimistic too, two years ago, when it told its workers that it would need 175 million litres of whisky per year to meet predicted demand, as Patricia Ferguson said. We are now told that the situation has changed, but market opportunities still remain. The SWA identifies opportunities in the BRIC countries—Brazil, Russia, India and China—particularly India. Those new markets are especially keen on malt whiskies, and a regulation is being introduced that will require that all single malt whisky be bottled in Scotland.

That is more or less the situation just now, as Rob Gibson mentioned, but the Scotch whisky industry strangely does not support such a regulation for blends, as there is an historical trade in bulk blends being shipped overseas. Diageo has a big interest in bulk blend exports. Shipping in bulk means less need for bottling, which can be done at market source by the end user. I hope that, when the Economy, Energy and Tourism Committee considers whether to carry out an inquiry, it will examine that part of the industry carefully.

Is David Whitton aware that only 5 per cent of Diageo blends are shipped abroad to be bottled, compared with 12 per cent of blended whisky from the rest of the Scotch whisky industry being bottled abroad?

That is an important contribution to the debate.

We have heard a lot of numbers this morning. Diageo recently reported its annual profit of £2.4 billion. Its chief executive, Mr Walsh, was paid £3.5 million for making what he called the tough decisions about the company's future, but he is only one part of the worldwide team—4,000 of whom are based in Scotland and make a big contribution to those profits.

According to the Scotch Whisky Association:

"Scotch Whisky distillers are acutely aware of the contribution they make to, and the role they play in, communities across Scotland."

That is particularly relevant in Kilmarnock, the home of Johnnie Walker, as Mr Coffey testified. Last week, the First Minister spoke of Diageo's social responsibility to Kilmarnock—something on which Mr Finnie and others have commented today. My Labour colleague Des Browne, the MP for the town, has called for a Kilmarnock recovery plan to prevent the town from becoming an unemployment black spot, and I welcome the cabinet secretary's indication of the investment that the Scottish National Party Government is willing to make in Kilmarnock and Glasgow to stave off the worst effects of the job losses. I hope that the money that was perhaps earmarked for Diageo to build a new bottling hall is now ring fenced for such a purpose but, more important, we need to know what efforts are being made to ensure that the company pays for some of that recovery plan.

Many members have spoken of the debt that Diageo owes to its workers. It must not be allowed simply to walk away having salved its conscience with redundancy payments. It is true that Diageo is investing elsewhere, but it must come clean about the new jobs in Fife. Are they permanent or casual, full time or part time? Are they with Diageo or an agency? How many will be offered to workers in Kilmarnock and Glasgow, giving them a chance to transfer?

My latest information is that, so far, Diageo has not sat down with the unions to discuss redundancy terms, but it has told the unions that it will cut back production at Cameronbridge to 50 million litres from 65 million litres, taking a further 17 million litres from its jointly owned North British distillery here in Edinburgh, which also has the capacity to produce a further 60 million litres.

As I mentioned, the SWA says that there are market opportunities in the BRIC countries. In addition, the recession is beginning to show signs of ending. The new biomass plant that Mrs Marwick mentioned will power the Fife distillery, but it is not ready yet and will not be for some time. A prudent and profitable company should be securing supply, which could be done by giving Port Dundas a two-year stay of execution. Who knows what the market will look like in 2012? Certainly not Diageo, which thought that it would be producing 175 million litres by now. The firm tells us that it spends £500 million each year on promoting the brands that it makes in Scotland. Is it not confident that such a large sum will lead to increased sales for whisky?

In today's edition of The Herald, there is an interesting letter from a Mr Christopher Jones, a retired Diageo account manager. He runs through the history of the company, which was created by takeover and consolidation, and says that, with hindsight—always an exact science—the inevitability of the decision to close the Johnnie Walker plant in Kilmarnock and the distillery at Port Dundas should have been obvious from Diageo's track record. I beg to differ.

Mr Jones describes the loss of 900 jobs as "collateral damage" in a business that is restructuring and that, if his former employers are guilty of anything, it is a lack of transparency at the outset. That much I certainly agree with. It is a matter of deep regret that a company that is rooted in Scotland was unable to share its thoughts with the Government and its workforce before the shock announcement was made. On this point, I disagree with Mrs Mitchell: multinational companies fare best when they collaborate closely with Governments and their workers.

Diageo has made its decision. Despite the cross-party campaign's best efforts, the company has rejected the alternative business plan and intends to press ahead with closures in Kilmarnock and Port Dundas. What happens next is up to Mr Salmond and Mr Swinney. We welcome Mr Swinney's comments on the involvement of the PACE team and SDI, but how much will the Government invest in the affected communities? I hope that Mr Mather can tell us. What will the Government do to get Diageo to carry out its commitment to support regeneration in the communities that it leaves behind? Will it continue to press for a stay of execution for Port Dundas until the biomass plant in Leven is ready? We—and, more important, the employees of Diageo—need answers to those questions.

The debate has been worth while, constructive and largely consensual. It has identified a number of areas of agreement across the Parliament and highlighted the traditional consensus that businesses have a responsibility to their staff. It has also highlighted the growing cohesion in Scotland and the recognition that public sector approaches to protect the interests of specific communities are appropriate. The episode has also shown the best of the Parliament in our ability to put political differences to one side to fight to support individuals and communities whose livelihoods and futures are at risk. I am proud to be associated with that concerted approach.

There has also been unanimous sharing of deep disappointment with Diageo's decision not to engage in the further development of the task force's alternative proposal. The task force's efforts have been widely recognised as constructive and credible. It produced a consistent and united campaign, raised the profile of that campaign across the globe and marshalled a proposal that should have moved Diageo. Unfortunately, the company has not been moved.

The task force identified ways in which the value gap between Diageo's proposal and alternatives could be reduced. Collectively, it set out opportunities for cost savings through shared services, increased business resilience and alternative working practices that were offered by the unions. It was confident that, with Diageo's support and involvement, further reductions in the value gap could have been made.

The task force's proposal also highlighted the consequences of Diageo's plans. Diageo is the single biggest employer in the affected areas and, in addition to 900 direct job losses, there will also be wider impacts within local communities. As the cabinet secretary said, we truly doubt that the company fully understands the significance and impact of its decisions on individuals, their families and the wider communities.

Corporate responsibility is not just about maintaining jobs. That is not always possible, but engagement with the Government to consider alternative proposals before plans are announced is important, not only because there have been instances of early engagement that have enabled us to safeguard jobs but because it allows support to be provided to mitigate the uncertainties for the individuals who are affected. If one lesson comes out of the episode, it is about the benefits of early engagement. Not only is early engagement in the corporate interest, it is the mature and reasonable step that workers and wider communities expect. Thus, it is also in the indirect interest of businesses and their shareholders.

Diageo's decision not to implement the task force's proposal is extremely disappointing. As the Government, we must work towards developing arrangements to support those who will lose their jobs and livelihoods. Diageo has said that, as far as it is concerned, the issue is closed. However, that is not the case for the unions, which, through statutory arrangements, still have the opportunity to advance the case. We wish them well in that, and the task force organisations have offered them every support.

The Scottish Government will do everything in its powers to support the development of the unions' case, which will build on the task force's work and will doubtless reinforce our belief that there were opportunities to develop its proposal further in conjunction with Diageo. However, as the Government, we must now develop plans to deal with job losses and community impacts. We must give individuals who are likely to be affected certainty that their interests will be looked after.

East Ayrshire Council and Glasgow City Council will lead the response at the local level. The task force will continue to meet to pursue matters of common interest—in particular, holding Diageo to its responsibilities. The Scottish Government and its enterprise agencies will be active partners in all of that, guided by the recognition that, because of their local knowledge and understanding of inherent and obtainable opportunities, the local authorities are best placed to lead.

We are all in no doubt that Diageo must leave behind an acceptable legacy. We will work with Diageo and other partners, through the task force, to ensure that that happens.

That was the fundamental message that we got in members' speeches today. John Swinney set the scene, establishing the pride in the process that had been gone through, the disappointment and, now, the need to move forward to develop both the whisky industry and the communities that have been affected. John Park expressed his surprise at Diageo's actions, given its previous track record with the unions. I visited the Alloa cooperage just last year and saw it as an enlightened workplace. There has, therefore, been surprise and disappointment.

I was also surprised to hear that Robert Brown feels that there has been a lack of consistency on the part of the Government. We have a track record, throughout the recession, in dealing with Vestas, Barclaycard, the Schering-Plough situation, the Rosyth to Zeebrugge ferry and HEROtsc in Larbert. I must show Duncan McNeil the letter that we have received from the managing director of HEROtsc in Larbert—I give that commitment.

Talking of commitments, what Patricia Ferguson got from John Swinney was an absolute commitment that we will work hard to ensure that Diageo plays its full part. I draw on lots of influences—the Danes and Norwegians are also working on corporate social responsibility—and the issue that we must get across to corporate Scotland and the wider corporates is that shareholder value is fine but corporates must go beyond that to endure and grow. If they are to endure and grow, they must adapt, innovate and continually execute better. If they want to do that, they must do two key things: they must align with what their customers need and they must get down among the people who are doing the work at the coalface to find out how the business can move forward. I encourage that approach in the future.

I got a sense of that from Duncan McNeil when he talked about the need for us to manage and facilitate change. That is very much what the Government has been doing in its proactive engagement with the sectors throughout its time in office.

Cathy Jamieson and Kenny Gibson can be sure that I will be keen to take up the cudgels for a wider summit in Ayrshire. The task force's primary focus is properly on the Diageo issue at present, but members will know that I have been running sessions in North Ayrshire, East Ayrshire and South Ayrshire—down in Girvan—this summer. I am keen to pull together more and more.

I acknowledge Ross Finnie's repeated call for a better way to approach sustainable economic development. That sits well in Scotland, where a lot of people of a similar mindset are working together. I advise him to contact the Strathclyde Institute for Operations Management, which is leading the way and offering guidance on that. We can get a better way forward if we act on the consensus that we have seen in the chamber today.

I was concerned to hear Iain Smith say that he feels that Fife is out of the loop. Fife Council was engaged in discussions with BDO Stoy Hayward, and the potential economic benefits to Fife were included in the ECOS report. The task force took very much a Scotland-wide approach, and the cabinet secretary kept Fife Council updated on a regular basis.

In conclusion, I pay tribute to the collective and co-ordinated work of the task force and individual members, which will feed into Ross Finnie's aspiration. Although Diageo has rejected the task force's proposal, we still believe that it was a sound opportunity for further interaction and the development of mutually beneficial strategies and that Diageo was wrong to dismiss that opportunity.

Our priority now is to put plans and arrangements in place to support the individuals and communities that are affected. Those people must be supported in rebuilding their futures. In that context, I welcome what Irene Oldfather said about the new qualifying threshold for the European globalisation adjustment fund. We will certainly look into that, as such assistance will be a priority and a major element in the delivery of support to the communities. We will also continue to engage with the whisky industry proactively on how best to enhance its contribution to Scotland's sustainable economic growth and to the further premiumisation of whisky globally.

I commend to Parliament the motion in John Swinney's name.