Meeting of the Parliament 10 February 2026 [Draft]
The Community Wealth Building (Scotland) Bill is not just a means of trading a slogan; it represents a recognition that Scotland’s wealth is based in the local communities that we live in. It is often forgotten that 1.2 million jobs in Scotland—more than half of all private sector employment—are created and sustained by small and medium-sized enterprises, which are the foundations on which this country’s prosperity depends. Combined with the powers of the state, both local and national, they shape our lives, building up wealth in our communities and allowing each next new generation to be richer than the last.
Yet, for far too long, our policy in Scotland has relentlessly focused on a laissez-faire dependence on the initiative and enterprise of foreign corporations, and foreign ownership and investment from multinationals, rather than building up our home-grown talent and enterprise potential. That is how Scotland has become one of the most foreign-owned economies in the world. As a result, it has experienced a net outflow of wealth in every year since records began. That is not a trivial sum. We are talking about more than a quarter of a trillion pounds leaving Scotland between 1998 and the latest figures in 2021. That is the result of decades of people actively choosing the multinational rather than the local.
We can go back to the Toothill report of 1962, which determined that Scotland’s heavy industrial base was beyond reform and that, as a nation, we had to depend on external investment, primarily from the United States, into our light industries. We seem not to have shaken that dependence ever since. That has come at tremendous cost to our prosperity. Scotland is one of the most foreign-owned countries in the world and one of only a handful of such countries that are both rich and developed but not microstates or outright tax havens.
Gross national income provides a useful indicator for us. The Government has been undertaking experimental statistics, although I note that it has not done so since 2021. GNI provides a measure of the country’s total national income, including all the income earned by its residents and businesses both at home and abroad. It contrasts with gross domestic product—GDP—which measures the income of anyone within a country’s boundaries, regardless of who produces it. It is a useful indicator, at a macro level, of community wealth building. GNI tends to be based on ownership, whereas GDP is based simply on location. If we compare GDP with GNI in the latest statistics from 2021, we can see that £36.5 billion was extracted from Scotland in that year, largely in the form of profits and dividends to foreign-owned companies and shareholders, while only £26.4 billion flowed into Scotland, largely as foreign investment income. That represents a net outflow of £10.1 billion. It is important to note that that is 5.5 per cent of GDP, which is greater than the average of any World Bank income group, including the world’s least developed and most heavily indebted nations.
Only five polities in the World Bank’s GNI database are richer in GNI per capita than Scotland while having a higher rate of outward economic flow: San Marino, Singapore, Ireland, Luxembourg and the Cayman Islands. We need to address that structural problem and properly interrogate the nature of foreign direct investment. That is why we have pushed the Government through amendments to the bill. The Government does not properly scrutinise the nature of foreign direct investment projects to ensure that they actually add net value to the Scottish economy.
I admit that, like many of my Labour colleagues, I was sceptical about the Community Wealth Building (Scotland) Bill as introduced—it was a mouse of a bill, as Richard Leonard referred to it. I was worried that it would create lots of paperwork for underresourced local authorities, that it would be about just an empty slogan and that the opportunity to meaningfully create community wealth building would be lost. We are perhaps still sceptical in some respects, but I am pleased that we have been able to work constructively with the Government and colleagues from across the chamber to fashion a stronger bill that will genuinely support community wealth building activities—to give the mouse some teeth, I suppose.
We have worked to achieve the inclusion of community-owned financial institutions such as credit unions in the Government’s community wealth building strategic statement and as an option in the action plans. The Scottish Government has committed to procurement reform and community empowerment reviews—both of which are sorely needed—in the next session of the Parliament.
I would have liked there to be more measures supporting co-operatives and for there to be greater scope in the organisations that will be included under the action plans. I note the concerns that have been raised about the surreptitious rundown of Co-operative Development Scotland, and I was disappointed that the Government resisted the amendments in the name of my colleague Richard Leonard. However, we recognise that the bill is a useful starting point, and it will be up to the next Parliament to ensure that its promise truly comes to fruition.
We need to ensure that councils and public bodies are properly resourced so that community wealth building plans turn into real community wealth building activity. We must also ensure that, when procurement processes are reviewed in relation to how they keep to community wealth building goals, we then act accordingly and make the changes that will be required to use public purchasing power to drive wealth building in Scotland.
The prize of a Scotland in which wealth-generating activities circulate within our communities is one that is worth striving towards. I hope that we will be able to consider the bill as the beginning, not the end, of our community wealth building journey.