 Okay. Good morning and welcome everyone to the 11th meeting of the net zero energy and transport committee for 2022, which we are conducting in hybrid format this week with some of us in the room and others attending remotely. We have apologies from the convener, Dean Lockhart, and from Mark Ruskell. I am chairing this meeting in Dean Lockhart's absence. Brian W fiddle joins us ddiddordebeth, ddiddordebeth, ddiddordebeth, ddiddordebeth, ddiddordebeth, ddiddordebeth, ddiddordebeth, ddiddordebeth, ddiddordebeth, ddiddordebeth. I'm going to be the first time you have attended the committee as a substitute. I therefore invite you to state whether you have any relevant interest to declare. Thank you, if you're no relevant interest to declare. Thank you, Brian. Graham Simpson will join us later for clarity. I should state that Graham will be attending as a non-committee member, meaning he's entitled to attend the public party of the meeting today and to participate in questioning witnesses at my discretion. witnesses at my discretion. At item 1, we have consideration of whether to take agenda items 4, 5, 6 and 7 in private. Items 4 and 5 is consideration of evidence heard at our two sessions today. Item 6 is consideration of draft letters on carbon capture, utilisation and storage. Finally, item 7 is consideration of the committee's work programme. Do we agree to take those in private? That is agreed. Items 4, 5, 6 and 7 will be taken in private. We will now move on to agenda item 2. Our next item is an evidence session in relation to our inquiry into the role of local government and its cross-sectoral partners in financing and delivering a net zero Scotland. I refer members to the clerks and spice papers for that item. We launched this inquiry in December to look into progress at local level in reaching net zero targets. This inquiry is also considering what role the Scottish Government and its agencies can play in supporting and challenging local government to work well with its partners and how local government can play its part in ensuring a just transition to net zero. We are now at phase 2 of our inquiry looking in depth at key themes to have emerged from our initial evidence sessions and our call for written views. Today, we are continuing on a theme of vocational skills and workforce readiness for net zero targets that we began last week. I am pleased to welcome our panellists who are joining us remotely. Ian Hill, industry insight manager and Ian Hughes, engagement director of Scotland from the construction industry training board. Gordon Nelson, Scotland director, federation of master builders. Martin Rehn, technical and skills manager, Scottish and Northern Ireland plumbing employers federation. Grant Tierney, chair, local authority building standards Scotland. Thank you for accepting our invitation. We are delighted to have you here. We have allocated around 75 minutes for this panel. We welcome comprehensive answers, but with five panellists you will appreciate we also welcome concise answers where possible. Members will ask questions in turn and I remind them to direct the question to a specific person on the panel or to set out a running order for answering the questions that are relevant. I will begin and thereafter I will go to Natalie Dawn for the first question from our members. I would like to ask the first question in relation to looking at industry more broadly and areas in the workforce where witnesses expect current skills gaps to increase or new skills gaps to emerge in relation to the transition to net zero and perhaps I could come to Ian Hill first followed by Gordon Nelson. I think in terms of net zero and the move towards that I think it's quite clear that it's going to affect all areas of construction. It's going to affect the new build and it's going to affect the retrofit, because it's about how buildings are constructed, the fabric of them, but then how they're heated inside. I think it is going to be a tricky one to see what the skills demand is going to be. I mean, we can see if we forecast five years forward and we generally find there's going to be a skills gap there in terms of numbers but also the changes within the skills as well. The bit that's tricky is normally the trajectory for net zero is going to be, and I think that's something hopefully we'll touch on later, because the skills respond to the demand and I think you can see certain areas where there's going to be demand but the tricky one is obviously the retrofit for existing homes and how that's going to be played out. I don't know if Ian Hughes wants to comment on any of that. Ian Hughes Yes, yes, thank you. Our own research is showing that around 22,500 roles will need to be created within construction by 2028. Some of those are quite significant in terms of specific occupations, such as project managers, trade supervisors and building envelop specialists in particular. Having spoken to industry on an on-going basis, we feel that the majority of the shortages will be filled and created through upskilling and retraining of existing workforce. I think that the gap in terms of the net zero agenda is a gap that has to be looked at in parallel with overall skills gaps within construction itself, because we're not looking at 22,500 brand-new occupations or 22,500 jobs. We are looking for industry to upskill and retrain that existing workforce in a number of areas to deliver large-scale interventions such as retrofitting on their occupied and public housing in Scotland. I ask Gordon Nelson the same question about what skills gaps or new skills industry itself is expecting to have to develop. Certainly, as far as we're concerned, our members are the SME building contractors across Scotland whose end client is a homeowner. What we're experiencing now is acute skills pressures at the moment within industry. Labour shortages across the construction craft trade, such as carpenters and joiners, bricklayers, plasterers and roofers. However, I agree with the points made by the CITB that, when we focus on retrofit to decarbonise our housing stock, it is about upskilling the existing workforce. What our members do is focus on being a domestic main contractor, and their focus is on the fabric and insulation measures, such as reducing the heat demand of homes. In their particular case, it is a question of upskilling and retraining their skills, their operatives, their supervisors, to meet, hopefully, what will be established as a demand for amongst homeowners in particular to improve the energy efficiency of their homes and reduce their heat demand. That, consequently, will have a positive impact on reducing Scotland's carbon emissions. That is my summary of where things stand at the moment. Are you convinced that the companies that are your members are doing enough just now to help to retrain an upskill existing workforce, if that is the main focus? It is a difficult one. In one way, it could be described as a bit of a chicken and egg situation, because the members around Scotland, from Shetland all the way down to the Freeson Galloway, are aware of net zero 2045 and understand that a major component of that is on improving the energy efficiency of our existing homes and buildings. They have a lot of the skills in place already. They are used to engaging with homeowners in particular and other clients, advising them and winning over their confidence. At the same time, a lot of their works now are on the home improvements marketplace, refurbishments, renovations, new kitchens, bathrooms and so forth. However, what they have found so far is a lack of demand for the energy efficiency fabric upgrades and the technology systems, because all of our members will subcontract to plumbers, electricians and other specialists to install energy systems such as heat pumps, for example. There is a lack of demand. A lot of members know that business owners want to direct their business where there is a future marketplace. However, without evidence of a marketplace, they do not have the confidence at this particular stage to invest in the necessary upskilling and retraining. They want to, but at the same time, being commercial and also dealing with the cost pressures now, with building material increases over the past six months, they are minded to keep the focus on what they describe as business as usual, rather than invest in a particular marketplace, which for many they do not see it as existing just yet. Can I come now to Martin Reign, if you would like to comment on either skills gaps that are likely to increase current skills gaps or new skills gaps that you are anticipating, and what your members are doing to try to address that? Good morning. Thank you very much for the invite to give evidence today. I suppose that the current situation in the supply chain is that our members often report that they do not have enough qualified people to carry out the work. That puts a real strain on their businesses and, naturally, our workforce is decreasing, and we are probably not bringing enough new talent into our sector. That puts a real pressure on a business. Workloads at the moment are very high, and that could be due to Covid. There is a real demand out there, and that is right across the market from new builds to retrofits to conversions and building upgrades of people's homes and such. For a business to invest in reskilling or upskilling someone, it takes a lot of time, it takes a lot of resource, so it puts a financial strain on them. With current traditional plumbing and heating works being in demand at the moment, that is where those companies see their work. It is very hard to convince them to start making a transition into net zero skills when they have already got a lot of work that they are struggling to address and to complete. We need to support those businesses in taking on more apprentices into the industry. We really support apprenticeships, because the skills development in Scotland is saying that 92 per cent of apprentices often go on to stay in employment, whether that is in the same sector that they are trained in, but that is a positive outlook. We are a big support for apprenticeships, so we would like to see more apprentices coming into the system to support those businesses. Again, it is that financial risk or financial challenge that that business faces, because it takes a lot of resource to upskill somebody and bring somebody into the industry. Thank you very much, and I will come now to Grant, hearing who understands maybe on audio only. Grant, can you maybe comment on what you have heard and where you think the new skills gaps are likely to emerge or the current skills gaps? Obviously, we have already heard that there needs to be a demand from local authorities, and obviously from local authority building standards, you might have a sense of, is there enough demand currently coming from local authorities to help stimulate training not only in local authority areas but also in the private sector? Yes. Good morning, everyone, and thank you for giving me the opportunity to provide evidence today. I think that, undoubtedly, net zero is going to bring a change to our guidance, and ultimately that will require some skills gaps to be filled. What we have been looking at quite a lot recently is what is called our workforce strategy, and a couple of key elements of our workforce strategy include things like a competency assessment system. This is a single comprehensive set of competencies for all staff working in the building standards profession. It was launched in June 2021 and we are approaching the end of the first 12 months pilot. What that actually does is it demonstrates the competency amongst the existing professionals within the workplace, but more importantly, highlights skills gaps and identifies where training is actually required, and that allows us to target it. Moving on from that, what we have also done as part of the workforce strategy is to develop a learning hub. It is a two-part piece of work. It is a virtual learning environment where we can provide bespoke building standards, self-learning modules to all building standards professionals to plug that skills gap. With demand, as with most of the construction industry, we have an ageing demographic within the workforce, so we are also, as part of the workforce strategy, developing vocational pathways. Those take a number of directions. The principal one to mention is our modern apprenticeship scheme. In partnership with local colleges and the building standards division in the Scottish Government, labs have been working to create a modern apprenticeship scheme. We have successfully got 22 apprentices as cohorts that will enter the profession this year. Again, that is just bringing new bodies into the profession to hopefully plug those gaps moving forward. There are other elements to this in terms of promoting the profession, implementing professional frameworks, but I am happy to expand on those later in the discussion. I am glad that we have got you visually as well. With the CITB saying that there are 22,500 new skilled jobs required, significantly a number of them from existing workforce, what is the intensity and length of training or retraining that would be required to upskill people for this demand in your particular areas? First of all, if I can come to the two Aeons or decide which one is Aeon Hill, I will come to first. The training bit will vary slightly. It depends on where the learner starts and where they want to end up the pre-existing knowledge. It will also vary a little bit by the different occupations as well. You can be talking one to two years, you can be talking three to four years, it does vary. I do not think that there is a clear answer on that and it might be corrected by the people that will come after me if that is okay. If you can maybe ask Ian Hughes if he wants to comment. Is that full-time or is that to retraining of existing staff while they are doing other work as well? I think that when you look at where you are targeting the retraining, there is a number of areas. One can embed, and we have started this process, one can embed net zero learning units in apprenticeships. Once an apprenticeship may take anything between two years and four years, embedding the learning during their whole learning journey and experience will give them the skills when they qualify to move into that space. The alternative route is when you look at an existing employee who may have skills within the workforce that need to be upskilled and upgraded to move them into a net zero environment. In many cases that could take a few months, it could be as quick as that basically. Again, it depends on exactly what is required. The more difficult the skill, the more technical the skill, it tends to take longer. A lot of the retrofit work, whether it is external cladding or rendering, whether it is basically internal fit-outs, in many cases tradespeople have good skill levels, they just need to move up a gear and move up a certain level to get the right competency. It does not have to be a qualification, necessarily, to work within a net zero environment, mainly within that retrofit space that we discussed earlier. If we can come to Gordon Nelson in it, we are trying to get a handle on how long this retraining or new training for the new skills will take and the intensity of it. It is supported by Ian Hughes' point about embedding sustainability within apprenticeship frameworks. That is something for the longer term. Obviously, a typical construction craft apprenticeship in Scotland runs for four years, and there are other modules in the apprenticeship philosophy that are shorter than that. On upskilling the existing workforce, yes, there are shorter measures in place. One thing that we are involved in, along with others, including Martin and Stipf, is developing an installer skills matrix for energy efficiency measures, so that industry will be able to see what the upskilling pathways would be for their operatives and supervisors. That way, the installer skills matrix outlines the minimum qualifications and recognition of prior learning, for example, that the existing skills and trades for both the technician side electricians, heating engineers, for example, and for the building and insulation side, too. Those particular pathways are broken down by particular measures. The idea behind the skills matrix is to give industry the confidence and the map to see where, if they choose to, they can access the relevant training, who provides it, how long it is and what measure it is, so that they can have a competent workforce to deliver retrofit, or, rather, particular other net zero aspirations. Can I ask Martin, if he wants to briefly comment on what he thinks will be required? Yes. Currently, we have a very competent workforce in the plumbing and heating industry, who have what I would call time served, served apprenticeships. Those people can be quickly upskilled on, for example, a heat pump training course that could take a week to two weeks. Those companies deal with delivering heat services on a regular basis, more traditional heat types, such as gas and oil and such. They have those fundamental skills. It is a quicker winner, I suppose, a simpler fix to work on that current workforce. Of course, the modern apprenticeships, that is a marvellous long-term thing. Again, we can adjust those to include more net zero focused competencies within them. There are two strategies there, short-term and long-term. However, I will work for us at the moment and it is very competent of what they do, and it would be quite a quick win in this situation. Thank you very much. I will now move to Natalie Donne, who is remote to ask the next question, and to remind members that not all questions have to be allocated to all members, but it has been very helpful at the beginning to hear from all of you. Thank you very much, convener, and good morning to the panel. Following on from the discussion on skills gaps, we have heard this morning about the 22,500 roles that will need to be created. In a previous session, the committee heard that there could be a concern that some of those new skilled roles might have a limited shelf life, so in terms of retrofit and buildings, as we have already discussed. Are the witnesses aware of that concern? Can you give any information on what can be done to ensure that any new skilled roles that are created during this transition are sustained and to ensure that there is demand for workers to acquire the necessary skills? I will go to Iain Hill first, and then Iain Hill after that, please. Thank you for that. Construction, by its very nature, changes constantly. Individuals have to change their skills levels and upskill on a constant basis. It never stands still, basically. We are seeing innovation and changes in the sector on an on-going basis. Employers take a lead on that. Agencies like herself, we assist and work with employers to upskill and retrain. When you look at the upskilling required for net zero, those skills do not go away, but they will be added to constantly. I think that the transferability of skills is important here, because when you have an individual who is constantly learning, constantly retraining and upskilling, he or she basically has pathways and pipelines into other occupations and other areas within construction that they can lend their skills to. I think that nothing should be done in terms of upskilling and isolation. We are always looking at upskilling individuals to improve their career opportunities and their skills level, because, ultimately, that will improve the business performance of employers in Scotland. It is another changing environment. We would not just upskill someone just for net zero. They have multiple skills at their disposal. We are looking at specific add-ons to their existing skillset that satisfy the needs of a net zero environment. Those add-ons can change and can be taken away, but they are normally added to continually. I see it as a positive step forward for the individual in particular. Thank you very much. I was just coming to Ian Hill next, sorry, if you had any time. I was going for the microphone to come off mute there. I think that, as Ian said and as I alluded to earlier, net zero is going to be part of the bill environment going forward. It is going to affect every piece of work. Particularly the retrofit being sustainable, you are looking at a programme of work that is going to span at least 20 years. Even if you are looking at installing things such as heat pumps and buildings, those are still going to have to be maintained afterwards. It is not a case of putting them in and leaving it. The skills there are not going to be sustainable, because what is built now is going to be around for at least 20, 30 or 40 years, if not longer. They will need service, maintenance and on-going work. That is really positive to hear that it will not just be those skills on their own. Obviously, they will be transferable skills for when they might be needed in other areas, I am assuming. In terms of apprenticeships that we have already discussed this morning, are any of the panel aware—in fact, I will come to Martin on this story, because I think that it was your self-discussing the apprenticeships—whether the current apprenticeships or training are being adapted to ensure that those that are coming through for those new-skilled roles, there will be a place for them within other areas in the future, sort of following on from what Ian has commented there. If I could come to Martin, thank you. The modern apprenticeships get reviewed on a regular basis. We go to industry and ask industry what they want and what they need, so if they are not seeing a real demand for renewables, they might not come back and ask for those things to be embedded into a modern apprenticeship, for example. We have to guide them a little bit on that and say that we can see the future from policy and what government is saying and the targets that are addressed. We change them and they evolve over time to embed those net zero skills within. We are a big support of apprenticeships because they give them ability to people. The learner, the person that goes through that has the ability to have a wider career prospects and a better future. We do not like things that are too focused on just one skill. One of Ian's mentioned earlier, it is about adding to the current skill set moving forward. Naturally, when demand comes—when I said demand, you have to look at the marketplace, the people who are asking for that work—that can drive businesses to start asking for other things. It is probably more of an organic evolution of the industry, if you see what I am saying. Whether that organic movement and transitional suit will match the targets of government, I am not too sure. Work does go on there and it does evolve naturally. That is very positive to hear. I think that the main concern is that workers or new-skilled roles might be too focused and that could lead to issues later down the line. I am quite happy to leave it there unless any other panel wants to come in. Obviously, we are wanting in this inquiry to focus quite a lot on your work in relationships with local government, and local government is procuring demand as well. That would be helpful in any of the answers that you might want to provide later on. I can come to Liam Kerr now, please. I will direct my first question specifically to Gordon Nelson and Martin Rein. We heard earlier on about the need to create around 22,000 jobs. Gordon said earlier about the need to upskill the current workforce. SDS told the committee in evidence that the current labour market is as hot by which I think it meant that there is a high demand for labour, there is a shortage of labour due to things like the pandemic. Are you finding that there are already skills or labour shortages? If so, how is this impacting your members and their operations and indeed the planning for the upskilling that you talked about? It is having a very big impact, I would say, certainly. In the last two stated trade surveys, which is a qualitative survey of our members under business confidence, we did find that skills shortages are right up there, particularly on the craft skills, I mentioned carpets and joiners, bricklayers and what we are seeing, particularly since the end of the construction trade restrictions in April last year. The first four months of last year, non-essential construction work was not permitted inside people's homes in Scotland due to Covid protection measures. Then we had a huge release of pent-up demand for domestic home improvement works, a huge booming demand. On the house building side, a booming business in that regard, we are seeing a huge competition for workers across Scotland with wage increases being a key sign of that. There is a huge challenge, particularly for smaller and micro-sized firms. It will be absolutely critical to delivering retrofit measures in local areas of Scotland on a small scale but across a huge, committed basis. In that particular case, how are they going to look ahead when they are applying their business, they are dealing with significant wage increases plus material price increases because of the shortages of key building materials? It is a massive challenge for us at the FNB to explain to our members the big potential that they could have in delivering retrofit across Scotland and where the upskilling might be. That is not pretending that it is not going to be particularly difficult to do that. We need to look at developing a national retrofit strategy that gives industry, particularly SMEs, the confidence that there is a stable pipeline of work out there that is properly funded, supported and co-ordinated by local authorities. Then, it has more confidence to invest in the relevant upskilling in solar skills matrix, through relevant pathways with local colleges and other trading providers. Then, we would see that a particular pinch on skills and the lack of confidence of industry to upskill, hopefully, be addressed. However, it needs a co-ordinated strategy and to give industry, particularly SMEs, the confidence that there will be a critical part of delivering the retrofit solution, if you forgive my phrase. Thank you. A garden gave such a comprehensive response to that. We are very similar and we have the same challenges in our sector. The number one complaint possibly from our members that could be a sole trade, a micro business all the way up to a larger contractor, is that we cannot find enough qualified people to carry out the work for us. It is a challenge at the moment. We hear stories of employees leaving one company going to another one, because they are being attracted there because the wages are better. They are trying to entice them in because they need to satisfy their contracts. There are situations where some of the businesses may not take on a contract because they know that they cannot fulfil it, so they are at risk of not completing a contract and letting somebody down. It is a real challenge at the moment with that. Again, it goes back to that apprenticeship and bringing people in long-term for the future and really starting to build on that at the moment. It is a real difficulty for any business at the moment. It is good for employees, qualified plumbers in the industry at the moment. They are all in work, which is really positive, but it is not good for the businesses because we need more people. I will direct the follow-up question to Grant Tierney and the two Eons at the CITB. In the last answer, Gordon just talked about the need to develop a plan or a co-ordinated strategy. The Scottish Government and Skills Development Scotland published a climate emergency skills action plan in December 2020, which, presumably, aims to achieve what Gordon rightly was suggesting we need to. It begs the question, Grant and Eons, what engagement your organisations had with that action plan, for example, or any of you on the implementation group. In your view, is it on track to ensure that the necessary skills are in place to support our transition to a net zero economy? If not, who needs to act and what needs to happen? Grant Tierney, first of all, please. I think that we have been looking at these items and are probably getting on for us since 2019, when our futures board's work streams were first discussed. That came on the back of some high-profile construction failures. With regard to skills development, we are looking at that through our engagement with colleges for our modern apprenticeships, where we are looking at the requirements within industry. We are then looking at the current course content and providing bespoke learning to enhance the existing learning that is there. In addition to that, we also provide lecturing specifically to the current university courses for graduate apprenticeships, and that is with Glasgow Caledonian University. Apologies, you were breaking up when you were asking the question, so I do not know if I picked up on everything you were asking there. Thank you, Grant. That was an interesting answer. As a part of that, do you have any comment on the climate emergency skills action plan from December 2020? How has that impacted on your organisation? Is it on track, most importantly, as far as you are aware? That will be fed into local authority building standards through the changes in the energy section and sustainability section of our technical guidance. That is currently out for consultation just now. The consultation period is closed, and we will hopefully be getting the new regulations from the Scottish Government soon that we will then be able to upskill on accordingly. What you are speaking about with regard to the net zero will be covered in our energy section. That has not arrived at us yet, but it will have been taken into consideration when writing the new regulations. Very grateful. Can I pose the same question first of all to Ian Hill then, please? Hi, Liam. I think that the climate emergency skills action plan, that we would have factored in when we were doing our net zero research, which was produced 2019-2020. We have taken that into account. The more interesting question that you posed was, is it on track and what needs to happen? The on track is going to be a bit difficult one with what happened with Covid. That really disrupted the market. In terms of what needs to happen in the future, that links into the point that Gordon was making. Industry still needs that clear pipeline of how the ambition within the plan is going to be delivered. When you look at the scale of work in Scotland, you have 2.5 million homes, 1.5 million are about owner-occupied. There is still a lack of clarity about how that is going to be delivered and translate from ambition into work in the ground. As Gordon and Martin have said, without that clear pipeline of how it is going to be achieved, there is always going to be a bit of a delay in businesses making investment into training. I am very grateful. It seems to me that that is the crucial point, but then it begs the question if a clear plan is required to implement the climate emergency action plan, who is going to drive that? Who is the onus on to create that clear plan that it sounds like you are all desperate for? On that one, Liam, I think that we have all got a part to play, but, ultimately, some of that has to become from Government. You will be aware of this. The Government has got two main levers that we can incentivise or legislate for making changes. It is how those levers are pulled that will stimulate the market. If you go back to what has happened with the Green Deal and the Green Homes grant, there have been two attempts to stimulate that oner-occupied market and get energy efficiency upgrades happening. Neither have really delivered, so I think that the Scottish Government has got another stab at it. It is the difficult one—how are you going to get oner-occupied homes to make energy efficiency upgrades? Everyone will be looking for the answer for that. We will try to help as much as we can, I think. That is very helpful. Ian Hughes, do you have anything to add to that? Yes, if you do not mind that. I can just read out very briefly, verbatim, a recommendation made to the Scottish CITB Council, which is your governing body, on this topic. In conjunction with the partnership with Skills Development Scotland, CITB should move to develop a detailed and specific skills plan for retrofits. This plan should map how skills demand will be met in line with the broader retrofit plans, sequenced and funded accordingly. New standards and quals will need to be developed, existing ones updated and provision-aligned, with the skills needed to deliver retrofits on a national scale. In terms of taking a lead on this, Skills Development Scotland being the national government skills body and CITB working in conjunction with industry in particular, we feel that there is a gap and that there is a need to map a retrofit plan out between now and 2025 to look at how that is sequenced over the following decades and how it is funded in particular, because at the present time, as has been discussed this morning, with the SMEs and micros in particular and the supply chain needing the confidence before they will really invest and take ownership of the net zero agenda, I think that we all need to be working to a plan that allows us to share it with our industry partners and our employers in order for them to fully understand the opportunities that are available. Some companies are ahead of the curve here. We have members, we have industry partners who are investing as we speak because they see what's coming. The majority are waiting to see if it fits them in terms of their own business requirements. I'm very grateful to the panel, unless Gordon and or Martin have anything particularly to add, I'll hand back to the convener. It was very helpful. I'll now move on to Monica Lennon for her question. Thank you, convener, and good morning to our panel today. Last week, the committee had a really good panel session looking at planning and the skills that planners will need, particularly in local government. The Royal Town Planning Institute published research in June of last year, and that found that local authority planning budgets have reduced by 42 per cent since 2009. I wondered if you could say if this reduction in resource has had an impact on how your members engage with planning departments, perhaps come to Gordon Nelson first and then Martin Reign? Hello, Monica. Yes, certainly what we've found from our conversation members and our service is that, not only for our larger members and the housebuilders amongst the membership, the delays in achieving family planning permission and the time that it takes for the permission to come through has been a consistent problem and still is. That does, particularly for smaller developers where they don't have the capital as much as larger developers do, it adds to the risk from their perspective as commercial enterprises. One thing that has fed back to me is summarising what our members' view would be on planning resources. It certainly supports planning-free increases if it resulted in an improved, more resilient service. They are aware that local authorities, particularly plan departments, have been struggling for a number of years with not enough planning skills across local authorities, and they sympathise with that. At the same time, if there are going to be more resources and fee increases, will they expect that to be delivered in terms of an improved service? Yes, it is certainly a current challenge, and I think that it could be something for the future as well. At the same time, some of our members who are aware of the NPF-4 consultation and national planning framework for that, there is a lot of that there about net zero and low-carbon aspirations. If that can be joined up with the resources element to so that it is aligned, that might help to release some bottlenecks. However, certainly speaking on behalf of our members who are smaller developers, it is a particular challenge. They are sympathetic with the resources constraints of local authorities. To some extent, without dragging grant necessary, it also applies to building standards profession 2. They are aware that there needs to be a resilient workforce among the regulations side within local authorities, both planning and building standards. That is really helpful, Gordon. I suppose that it does not impact us directly, because our companies tend to provide services on a subcontract basis to builders, developers and such, but it does affect them. What I would say with plumbing and heating companies is that they tend to do what they have to do or what they are asked to do. I think that I can revert back to what Ian was saying earlier about legislation playing a big part here in the new build sector. What you will find is that if they are made to do things, they will naturally do that. We have seen that in the plumbing and heating sector in the past, where legislation is coming in on different ways of doing things and different requirements. The plumbing companies naturally evolve to do it how they are meant to do it. The real challenge, like we have talked about earlier, is that retrofit market. It is more of an indirect impact on us. If there is hold-ups higher up the chain, it will definitely impact our businesses. They would look to Pivot to provide services elsewhere, where you did not have planning involved, you do not have building standards involved, so much more domestic-based work. I cannot have an indirect impact on us. Grantian, if you would like to attempt an answer at that and maybe bring in the building standards perspective, because planning and building standards are very closely linked. Yes, thank you Monica. Although we are very closely linked, it is a different set of circumstances that we are dealing with. We have been monitoring nationally our workforce data since 2019, and we can now start to map some trends. I mentioned earlier that we do have an ageing demographic profile, and it is anticipated that there may be a bit of shortfall of about 10 per cent with regards to the supply and demand for a workforce. That is across a fairly static workforce of around 600 people nationally. It is not quite the same issue that planning is tackling at this point in time. Encouragingly, we have now got a lot more staff who have been with us for a longer period of time, so now there are nine more people in the industry who have got 10 years experience. Positively, the gaps that we are filling there are a number of graduate apprentices and now modern apprentices coming into the industry. That is looking quite positively. There is just recently launched that the Scottish Government is reviewing the building standards fee income. It will look back to the last fee income in 2017 to see what impact the fee changes made at that point in time. We are also going to consider some of the new works that we are going to have to do as a result of the future board. That is being taken into consideration with regard to any fees. The verification side of building standards is intended to be self-funding from fee income alone, and that includes 30 per cent charge for overheads. What is often the challenge is that, when the fees come into the local authorities, they are used in the correct places to enhance the service. Grant, you mentioned apprentices. We touched on that last week that, in Scotland, there is not a route for planning apprentices at the moment. I think that that happened in England. In terms of growing the pipeline of planners, do you see a potential role for an apprenticeship route? Is that with regard to planning, or is that with regard to building standards? Yes, for planning, I think that you said that there is an apprenticeship route for building standards. I may have picked it up incorrectly. There certainly is a modern apprenticeship route for building standards, so it is something that we have been working on continuously for a number of months. We are very proud that 22 apprentices will begin their training this year, so they will be employed by local authorities and they will be studying that in Fife and Inverness colleges. They will start those college courses in August, and the recruitment of those modern apprentices will be happening soon. Labs have met their colleagues at Hobbes and explained our workforce strategy and the journey that we have been on, so they can hopefully learn some of the lessons from the positive work that we have been doing in that regard. One of the apprentices is just one asset of filling the workforce. It does not just stop there, so raising the profile of the profession, which is being done currently by our ambassadors, and that is at schools, colleges and universities. It is not just one thing that will solve this problem. You need to approach it from several aspects. That interaction with people at an early stage, raising awareness of the profession and showing them that there is a career is how you grab their attention in the first instance. CITB has published commentary looking at the number of new skill jobs that will be required in order to achieve the transition to net zero. Does CITB have a sense of how ready the skill assessment industry is to deliver the skilled roles? I am not sure which of the Aeons wants to go first. Ian Hill. That is fine. You have popped up first. Go for it, Mr Hughes. Can I respond to your planning question first and then I will go back to this one? I graduated as a planner about 100 years ago now. On the concept of a planning apprenticeship, there is a graduate apprenticeship model in Scotland that is used increasingly so by careers such as civil engineering. In my opinion, there is no reason why you could not develop a graduate's apprenticeship for planning graduates as opposed to the full-time role. That would need employers like local authorities to be the employer, because the graduate's apprenticeship model is part-time at university and part-time within the workplace. If the shortages are such, it is something that should and could be looked at fairly quickly. On your specific question about the skills, when you look at the challenge and the scale of what is required, if you look at the whole-house retrofit just within the housing market in Scotland, Scotland has two and a half million occupied homes. One and a half million are owner-occupied, 600,000 housing associations are local authority, 400,000 private and about 18,000 new-build units go up every year in Scotland. If all that has to be captured within a retrofit strategy or a net zero strategy, that has significant implications just in terms of the phasing of that and the timescales involved. A colleague said earlier that the process would—we know that it will move into decades and will probably never stop because you have to not just retrofit once, you have to try and make sure that it is not just a heating system you have put in but a whole-house approach. A heating system going into a housing unit that leaks energy has poor windows, poor insulation and is pretty much a waste of time. That whole-house approach in terms of the scale of the homes that we have in Scotland will have clear implications on the skills and numbers of individuals that we need to bring in to deliver that workload. The 22.5,000 figure that I mentioned earlier on is not for the whole next 20 to 30 years, it is to take us up to the next 10 years, between the eight and 10 years. Looking further afield than that Ian Hill should come in now, he is the research expert. Looking further afield beyond 10 years, it becomes increasingly more difficult because the variables are more difficult when you do not have a clear pipeline of investment laid-outs. If you had an investment plan for 30 years in infrastructure within housing, you could start looking at the research over that period in terms of what skills were required difficult at the present time because we do not look that far afield. Ian Hill, do you want to pick that point up in terms of that research capability in what is required longer term? I agree with what Ian Hill said. The main issue around the skills is that the skills are not existent because they are. If you are looking at what has been put in retrofit measures, it is things that are here at this moment in time. If you look at the skills around for energy assessors because you will need retrofit co-ordinators as well, they are already existent. The main problem is that pipeline of demand is coming through in the future, the number. It is a big number, which is what you look at. It is how that translates through. In terms of what Ian Hill was saying, we generally have skills forecast about five years out. Any skills forecasting over the past few years has been really difficult. Even if you start to go beyond five years, it gets trickier. We do a rolling five-year forecast for the sector. We do look a little bit longer than that. The net zero one was an example of that, but that was based on a set of assumptions that were made at a point in time. It was based on meeting the Committee for Climate Change's targets and their pathway to seeing net zero deliver through to 2050. It would be fair to say that those assumptions have probably shifted a little bit. We have probably lost at least one or two years with Covid, and that means that there is still a lot of work to be delivered. The clock is ticking on that a little bit. I think that the skills are there. It is delivering the amount of skills in response to the demand. That is the challenge. Just to pick up on what Ian Hughes said a moment ago about the lack of longer-term certainty about investment, that alignment with investment plans is clearly important. Do you have any views on what should be done to provide more certainty about investment over maybe not as long as 30 years, but certainly longer than what we have now? Was that a question to me, Monica Rennie? Well yes, if you had anything to add, it is not compulsory to have a view. I think for business. Business will always look for certainty. Gordon and Martin have commented on that as well. There will be a certain element, a certain number of businesses that will take a risk, will take a pun. Most of it will be risk of errors. They are looking at fairly short-term programmes of work. Having that clear pipeline takes away some of that uncertainty, takes away some of that risk and gives the conditions for people to invest and train it, because that is ultimately what it is in investment in the future. Ian, was there anything that you wanted to add to that? I think that it is that confidence within the SME and medium sector in particular as to what is coming down the road. We have one of our council members in the Scotland City B Council Scotland, A.C. Light, her marriage and director, Jennifer Finne, works in this space in terms of external cladding within a net zero agenda. She procures only through local authorities and public sector procurement. She is investing in her business and training and skills through the creation of skills academies within the business because she is already in the space and she tenders within procurement to deliver within a net zero agenda. She still has some training support needs in which we will hopefully be able to assist. That company is a good example of a company that has a niche space at the present time, is looking to grow its business within a net zero procurement route through local authorities in particular and is investing via skills academies in its people to get the right training and the right skills level for them to deliver those contracts. She is probably worth speaking to her at another a different time because she has confidence in her business's ability to move into the space and grow her business. Other organisations or other businesses are waiting to see at the present time. That is very helpful. Back to you, convener. Thank you very much and we will now move on to Jackie Dunbar. Thank you, convener. Good morning, panel. Thank you for coming along today. In some of our previous evidence sessions, the committee has heard about the retaining staff and local authorities. I know in some of Monica's first questions you were discussing the planning services and the building standards, but are you aware of any other services within the local authorities where you think that that is a concern that you have been made aware of? If so, what impact has that had on you and your members? Can I go to Grant first and then, maybe, Martin? Hi, thank you. I can only speak on behalf of building standards within local authorities but, fortunately, we are in a profession where there is not necessarily a direct equivalent out in the private practice world. We are quite good when it comes to retaining existing staff. We do not often lose staff. If they do move, they move to another building standards position within a different local authority. I do not really see that as an issue being for building standards, but I cannot comment on other local authority services other than building standards. I know that building standards work closely with other departments. That is just why I was asking if you had maybe seen anything. If I can go to Martin, please, in regards to his services. Staff retention, I cannot comment on local authorities because we are not really engaged with local authorities. Our employers are good employers. They have good conditions of work that is decided through the Scottish Northern Ireland joint industry board, which is a partnership with SNPF in the United Nations. We have good working conditions in the industry. At the moment, as I said earlier, it is a perfect time for employees to move about. There are opportunities for them because companies are looking to complete contracts, so they need that labour in there. You get some staff that will move around. I think that what has been raised earlier is that the numbers in the industry are declining naturally through retirement. The work process is getting old, but that is the real challenge for us on our side of things. However, the working conditions are good, so retention is pretty good within our companies. I was wondering if any of the IANS would have any insight into the shortages. My apologies for following yet any of the IANS. I know that I have read that. I have a pinchpoint for me. My previous job to CITB was in property and construction and development. Speaking to local authority colleagues, a pinchpoint seems to be around procurement teams. They seem to struggle in terms of the numbers and the skills that are required in procurement. I work with large local authorities, and that is not having a pop-up individuals at all. If people leave or procurement units were downsized and experienced and skilled people left local authorities, how do you replace them and how do you get the right skills? That takes time. If there is not a pipeline of procurement experts from the pipeline, we tend to come from the private sector. If they do not move into the public sector, you will see a gap there. If there is a gap in procurement, there is potentially a knock-on effect, because that procurement in many cases in Scotland is the pipeline for huge, almost 50 per cent of construction work in Scotland comes via public sector procurement. If there are pinchpoints there, that will have a knock-on effect in planning, in building control and in even specification in terms of standards. I think that it is an area where, if I am not an expert on, it is just casting my personal experience that there is potentially an area there that has been people leaving or downsizing of units and it has taken a while to get that back up to speed again. Iain Hill, do you have anything to add? I have nothing to add over what he used already. I did not want to jack you to start with that. No, not at all. I will be honest. The procurement side of things was not one that I would consider, so the answer was extremely helpful. My second question is in regards to last week's evidence session, where Colleges Scotland highlighted that the new-taste cities region deal, which was signed in December 2020, was a positive example of how partnership work in bringing together public and private sector to deliver the outcomes, especially on the climate goals. If anyone has had any engagement with that city region deal or, in fact, any of the other city region deals, can I start off with maybe Iain Hill, please? Probably Iain might be a better one to start with on this one. I have not had any direct engagement with the city region. We are having some engagement with Glasgow city region. They are quite keen on using our labour forecasting tool to look at their skills needs going forward. As part of that, even though Glasgow city region is not aware of it at this moment in time, we will be building in our net zero capability within that as well, so hopefully we will be able to offer that one going forward. We have just got an agreement signed on that one. I think Iain, I am not sure if you are fully aware of that as well, but we have actually just got on that sort of with Glasgow city region. We are involved with all the city deals and all the major infrastructure contracts specifically. We have a product called a client-based approach that is substantially how do employers, when they are tendering or procuring work, how do they build in social values and social benefits in terms of skills and training? That product has been adopted by all of the tier 1s, which are the large organisations, the large employers in Scotland. That filters through into city deals, for example, when we work on where we are involved in the Tayside and Glasgow. We assist employers and clients to maximise the social benefits within procurement through that client-based approach, which is a product that measures impact and KPIs and is embedded in the tendering process itself. Thank you very much. I am not sure if any of the other panel members would like to give me a comment, if not, I will hand back to you. Thank you. I think that Gordon Tierney had wanted to come back in on one of the questions from Gordon Nelson. Yes, thank you. On the current topic of local authorities and resources, it is a previous question. Support the Government about procurement. That is something that is fed back by some of our members who work with local authorities delivering construction services, be that repairs, maintenance and improvement works to public sector estates. The skills and resources of the procurement team and local authorities is anecdotally certainly a concern among some of our members, too. Just going back previously, when we were talking about the skills plan, looking more broadly, the skills plan, the client-based skills action plan, is one major piece of a jigsaw that would include the likes of clearer standards, accreditation, creating demand, materials, equipment and compliance. It is a major piece of a jigsaw, but it is still a piece of a jigsaw in order to stimulate and integrate retrofit measures around the country to give industry the confidence. Skills are critical, yes, but at the same time it is much wider than that. That is something that we are looking to work at as well, so that is why I wanted to come in earlier. Thank you for picking me up. Thank you very much, Gordon. I will now move on to Brian Whittle. Good morning to the panel. I was listening to Ian Hughes' reply to my colleague Jack in the Mars question that raises an issue around the Edinburgh Climate Change Institute highlighting a skills gap perhaps in relation to the way in which green projects are being financed and perhaps there is a lack of skills in developing business cases. I wonder if you would like to comment on that, I suppose, because most of the finance that would come through would be cascaded through local authorities. Would you suggest that perhaps that is an area that we need to look at? Excuse me. I think that our space within local authority finance would be the procurement route, as I mentioned earlier, just in terms of how much influence we can have nationally in terms of utilising procurement as a vehicle to focus consistently on what we are trying to achieve within zero in particular. Within the decision making process of what those priorities should be nationally, it has to be a collective decision with local authorities because they all have slightly nuanced approaches to community benefits and social benefits within procurement itself. If we had a conversation that did the focus over the next 20, 30 years within that space would be to ensure that the skills within a net zero environment where the social benefit we want to see from local authority funding, I think that that would be a huge step forward because the funding is there. It exists. What you are doing is focusing some of that added value with the employers who utilise that funding within the public sector. You are adding value, if you like, to the net zero agenda in terms of a bit more focus and creating a bit more confidence that you had the ability to upskill where required within that procurement channel itself. It is a huge investment space. It goes through local authorities in particular. I think that there is a tremendous opportunity to consistently roll out the benefits of that within a net zero agenda. Thank you very much. It is fair help, Mr Hughes. I think that it is an anendum to that. From what you are saying here, there are obviously new skills required and being developed. We are learning as we go on this net zero agenda. Is there enough interaction between the private public sector to ensure that the outcomes are as we would want them? I probably cannot comment on the interaction, but I would comment on the regional differences that we are part of. When you look at our employers in the islands, for example, Orkney, Shetland or Eden and the Western Isles, they have very different needs and requirements in terms of delivering the net zero agenda within their communities than we have in the central belt of Scotland, for example. The local authorities in terms of their geographical location will have slightly different approaches because the needs are different, but the end game, if you like, is the same in terms of that national target. I think that local authorities being able to share that and collaborate in that experience would only be a positive step forward. I want to have a question to Martin Rain. The retrofitting of homes has been mentioned, and I suppose that we will use that as an example. We know that the Scottish Government has set a target between 2025 and 2030 of retrofitting on 1 million homes with heat pumps, so 200,000 heat pumps per year. I suppose that that depicts how much demand will increase on the workforce as a result of that activity. Are there enough resources in place to make sure that we have an upskilled workforce that allows for those targets to be reached? I suppose we are looking at doubling that output pretty much, year on year, to get up to those numbers. I think 2025, it was 64,000 renewable energy systems to be installed. We have got to ask the question, what are we asking our supply chain to do? There is a demand for renewables at the moment, so are we asking these current businesses to start doubling their output every year? That is a lot for any business to do, doubling sides year on year, or are we doubling the amount of people who can do this sort of work moving forward? Those are the questions that we are asking. If you talk about a company doubling their output, you have to think about the equipment, the components and the appliances that they are installing. They do cost a lot more money than what a traditional central heating boiler would cost, so you are then taking on more risk of the business. You require more credit, and when you are laying a lot of money out on the line, that is a massive financial risk to any business. At the moment, labour-wise and employment-wise, we have not got enough people, so we definitely need to bring more people into the industry to start them on those modern apprenticeships to get them upskilled. They are ready for five, six years down the line, and we also need to look at our current workforce and go for those quick wins, those quick solutions of reskilling and upskilling on short courses that will allow them to go on and succeed. Can I bring Grant Tierney in and add into that in terms of the financing of Net Zero? Do you think that it is all lying at the moment with the private sector or where the public sector is sitting with the upskilling or potentially financing the upskilling of the workforce? I have touched on how we identify skills gaps and how we provide knowledge to upskill that. We are getting funding from the Scottish Government to assist us with that. With regard to the last question about the workforce, there are skills there. When we look about heat pumps coming into buildings, we need to determine whether or not anyone's permission is there to see what impact that will have on local authority building standards services. We have worked previously with partners in the private sector when we speak about our warmer homes initiatives, where we have sat down and we have given them a clear blueprint on what it is that they need to do when they are applying for warrants so that they can move quickly through the building warrant process if required. I would also mention that there is a Scottish-type approval scheme, which is engagement between local authorities and private stakeholders, which streamlines the building warrant process. I hope that that is how local authority and private sector engagement are working together. There is evidence of that to remove any of the concerns about the upskilling and the increased activity in the site of things. If I could finish off, I will ask Ian Hill. Given that there is a need to increase the number of people working in the sector, do you think that a bit of work needs to be done in raising the awareness, understanding and public opportunity to the public and private sector workforce in the net zero environment? Perhaps we are not doing enough to highlight that. I think that everyone is aware of the opportunity. I think that there is enough work there that is highlighted to the scale of the challenge. I think that what you have got from the meeting today is the guidance about how that opportunity is going to translate to action on the ground. That is the gap. That is probably the bit that is missing. If we could go back to the question about the heat pumps, I would not forget the fact that, if you put heat pumps into building, you are still going to have to put repairs to the fabric. There is no point in putting in heat pumps if the buildings are going to leak energy through the fabric. The Scottish Government might have a target for heat pumps. There are going to be other retrofit measures that it will need to put in. There has got to be a whole house approach. You probably also want to make sure that, if you are doing a retrofit, you are doing it once. It is not a case of doing some stuff in the next five or ten years, and then improving it again in another 10 or 15 years. You want to be trying to get as close to that net zero target as you can at the moment. I think that there is a real opportunity for the local authorities and local associations to leak the way on this. Thank you. It was just, I suppose, really to identify something that has worked really well over the last year, and SDS introduced their AEG grant, which was £5,000 for employers to take on an apprentice during Covid. Pre-Covid, we would tend to take about 300 apprentices in the first year. With this AEG grant, it has allowed us to take on 391 apprentices for 2021-22, so it really shows a positive outcome for financial support to those employers. There has also been some funding. It was a low-carbon fund, which was a fund made available through the MG Savings Trust, which allowed employers to upskill their staff on the heat pump training courses or solar thermal training courses, and that was very successful. Things like that do work. I suppose that those are solutions that we could possibly look at moving forward. Thank you very much to our panel for taking part this morning. The committee will have a private discussion on the evidence that has been taken today once our public meeting ends, and indeed, if there are any reflections particularly on what you wish for local government, as key partners of local government, we would be keen to hear from you as a supplementary to this session, if you so choose. We now bring this part of the meeting to a close. I am now going to briefly suspend the meeting for the set-up for our next agenda item, and our witnesses can now leave the session. Thank you very much. I suspend the meeting. Welcome back, and we now turn our attention to Piano Ferries. This session was scheduled following Piano's 17 March announcement on staffing and on suspension of services. I refer members to the clerks and spices papers for this item issued on Friday. I welcome Peter Hibblethwaite, chief executive officer Piano Ferries. Thank you for accepting our invitation at short notice, and for your reply to our letter that was received at 8.56 am this morning. We have allocated around an hour for this session. Mr Hibblethwaite, I understand that you like to make an opening statement. Thank you very much. First of all, I say thank you for letting me make the opening statement to explain what has been a very difficult and unquestionably controversial decision, but it is a necessary one. Before I do that, I want to reiterate to you, if I may, in my apology to 800 seafarers and their families, and specifically to this committee, the 39 seafarers and their families that were affected who live in Scotland. The backdrop here is that Piano has lost an unsustainable amount of money over the past few years and has not been viable for a number of years and has not been competitive for that same length of time. Without a material change in the business, I would not be here answering questions about the loss of hundreds of jobs, as difficult as that is. I would be here talking about the loss of thousands of jobs, because without material change to the business, we would have had to close it. The business has been funded to the tune of hundreds of millions of pounds by our shareholder who has never, not once, taken a dividend from the business, but it is not sustainable and it is not possible to expect a shareholder to unconditionally support a business that has no plans to change. Sadly, we had to bring about significant change. At the core of that was this very difficult decision where we had to change our operating model. It occurs to me that I do not think that I have fully explained why this change to our operating model is so material. I would just like to take a second to do that. The vast majority of the impact of the decision sits on the Dover Calais route. It is better explained where we used to operate four full-time crews. In reality, it was more like 4.8 when you account for sickness and training, but we had to pay for four full-time crews who worked 24 hours, 24 weeks a year. This new model is a different way of doing business, and we are outsourcing our crewing arrangement. Through that, we will only be paying for two crews and only paying when they work. It gives us clearly significant savings, but also an increased level of flexibility for us to compete. The model is radically different from where we were, but it is recognised and used in 80 per cent of shipping across the globe, and the crews industry moved to decades ago. Having made this very difficult decision and where we needed to go from a model point of view, why we implement that decision the way we did. We assessed all options available to us, but, ultimately, we, the board, concluded that all routes, with the exception of the way that we implemented that, led to the closure of the business and, as I said, a loss of thousands of jobs rather than very sadly hundreds. Therefore, because of such a critical decision and because it was so radical, it was our conclusion that no union could possibly accept our proposal, and therefore any consultation would have frankly been a sham. We are compensating people, as we are required to, in full and up front for the failure to consult. On top of that, we are overlaying a significant package, a redundancy package, which is, we believe, the largest redundancy package ever issued in maritime history. There has been a lot of talk about how big it is in the top end, but I think that the thing that is most important is that, although we did not cap the top, what we did do is cap the bottom. For the people who are less well paid and be with us for a shorter period of time, who would normally have received a much smaller payment, we capped the minimum payment at £15,000. Where we sit today is that 765 out of 786 seafarers have started the process to accept that, and we will support the remaining 20-ish seafarers if they need any support making their decision about where they are going to accept our offer. One last thing to say. Now we move to two priorities. First, finding new jobs for those 800 seafarers. We have engaged in a number of different organisations to do that, but it is a clear objective of ours. Secondly, to restart our business. In reference to this committee, particularly Llancair and Sart service, I would like to bring back safely to a full schedule to deliver the trade requirements for the route between Scotland and Northern Ireland. Thank you very much. We can now move on to questions. Can you explain what is currently happening with the European causeway and what regulations are you not complying with? We have said all the way through this that we would not let any ships go back into service unless they were fully safe. This is not a process that we are prepared to rush. This is not a process that is limited by money or anything like that. We have worked hand-in-glove with the regulators. In fact, I met the chief exec of the regulator yesterday. We had inspections of both the causeway and the highlander. The highlander was passed to do a single voyage. The causeway, we have some challenges on. Most of them, so there were 20 defects, 12 of them were technical, 4 of them were administrative paperwork-type issues and 4 of them were crew-related. That is absolutely correct. That is how it should work. The regulator and us should work together to work out whether a ship is ready to return to service or not. We both concluded that that ship is not ready to return to service yet. You have acknowledged breaking the requirement of the trade union and labour relations consolidation act 1992 for business reasons. Are there any other laws that you would consider breaking if a similar situation arose? Can you understand why passengers would be very worried about travelling with a ferry company happy to break the law? We failed to consult. I do not deny that. We are compensating people in full for that failure to consult as we are required to. This was a unique situation. We are talking about saving a company. We are talking about genuinely saving thousands of jobs that would otherwise have been irrecoverably lost. We found ourselves in a unique situation. In that unique situation, we took the path that we took because, as I say, all routes led to irrecoverably losing those thousands of jobs. Of course, I understand that this is controversial. I read the headlines as much as anybody else. However, I believe that consumers and industry is better served by a piano that exists than doesn't. It is understood that the UK Government may bring in new laws as soon as this week. Would you commit to comply with any future UK legislation in this area? Of course. I cannot really comment on what the Secretary of State for Transport might bring in, but there is talk, as you know, about national minimum wage. I want to be absolutely clear. The route that runs between Scotland and Northern Ireland as a domestic route, we are required to pay national minimum wage. We do pay national minimum wage and we will continue to pay national minimum wage. If that were extended elsewhere, we will completely comply with it. This has not been about rates of pay. This has been about a fundamentally different model and having a level playing field for us to be able to compete and take a company that was not viable to a company that could compete. Do you have any remorse? On many occasions, I have reiterated how sorry I am for the impact that this has had on 800 seafarers, 39 who live in Scotland, their families, the 2,200 people who remain in the organisation that have had to answer a number of difficult questions. I am very, very personally and personally deeply sorry for that. I do, however, believe, historically, that we would be talking about the irrecoverable loss of thousands of jobs had we not taken the very difficult decision that we took. Do you have any regret? Do you have any shame? I do not think that this is about me personally. I think that this is about saving an organisation, saving thousands of jobs. I regret that the impact that this has had, absolutely I regret the impact that this has had on 800 seafarers and their families. Unfortunately, it was a very difficult but necessary decision. Do you have any shame for yourself or for your company? I do not think that I should feature in this. I am not really worried about me. I am worried about saving an organisation and thousands of jobs. That is not hyperbole. I really feel that. That is a critical decision that had to be made, otherwise this business would have closed. A company director who breaks the law, I think, is a serious responsibility for any individual. I want to move on to finance before I move on to Liam Kerr in this area. The board of P&O Ferries Holdings considered this business to be a going concern with its annual accounts when it was signed on 10 December 2021. Can you explain what changed in the last three months from a going concern to the summary sacking of 800 workers? Going concern with the support of our sharehold. What has changed is that it is not appropriate for me or the P&O board to expect unconditional support for a business that is without their financial support viable without a plan to change. We have received extraordinary levels of support, as has the British economy, over £2 billion worth of investment, but it is not appropriate for the P&O board to continue to expect unconditional support and have no plan to become a viable business in its own right. Liam Kerr. Thank you, convener. Good morning, Mr Hebelswaite. P&O accepts that UK employment law is not merely broken but fundamentally offended. You are paying out £36 million under settlements to make that acceptable to the employees that are presumably needed to include notice, holidays, a settlement sum, an aggravation uplift and a 90-day collective consultation award per employee. One would have thought that there must also be an upfront cost per month for the agency supply. First of all, what is the cost of the agencies? How long do your projections show it will be before P&O breaks even on the settlement sums, the agency fees, the legal fees and the management time such that this makes commercial sense? You are right that this has been a very costly process. It is not about the short-term financials. It is about giving P&O a long-term future or closing it. We have been very generous in our settlements, as I think you are indicating, and frankly, as we should be and as our shareholder would expect. The payback for this ranges from, depending on which scenario it works out, ranges from 18 months to a two and a half years type thing. It has an appropriate business case, which of course it should, but it is about long term keeping a business competitive or making a business competitive and viable. Ultimately setting us up as part of a programme of change of which this was the most difficult one and future changes will be positive and growth orientated, but this is about long term not about the P&L for the next few months. Just as a point of order, I am not sure that I was suggesting that you are being very generous since you mentioned it. It is interesting that a two-year payback leads to the conclusion that you cannot do the statutory required consultation, but I will let others pick up on that. One of the things that I think is interesting from various parties' point of view is that P&O registered losses of around £130 million in 2019-2020. The suggestion is that for 2021 there will be a further £100 million loss to which DP World has offered a facility of £100 million. How certain are you that P&O is good for the £36 million settlement and the agency's fees? Have you given the agency's guarantees? One would have thought that they may feel that they are taking something of a financial risk doing business with a company that you described earlier as unviable and which chooses to ignore the law of the land if a bit of money is thrown around. This is a P&O board decision supported by finance from our shareholder. We are absolutely confident about our ability to pay our bills. Of course, we have entered into a contract with the new crewing management company that both of us are confident that it is appropriate. Just let me ask a part of that question again. Did you give them guarantees? P&O accepts that UK employment law was broken such that hundreds of employees could potentially have prosecuted unfair dismissal claims and it is difficult to see how they could have been successfully defended. I have no doubt in your planning that you have appreciated that the primary remedy for a successful unfair dismissal claim is reinstatement. What planning did you do for a situation in which a tribunal orders the reinstatement of all those employees? Did you plan to comply with such an order or would that authority have been ignored as well? Had that situation come to pass, what loyalty would you have shown to the new agencies in that situation? Our assessment was that we would not get to that situation and the reality is that the reinstating of our previous model, a forceful reinstatement of our previous model, would have put us straight back into the position where this is a business that would pose. Yes, but haven't you just said that you would have ignored any such order from a tribunal? No, so our assessment was that we would not find ourselves in that position. So we did fail to consult and we are compensating people in full with that and we are doing everything that we are required to do. No further questions, convener. Monica Lennon. Thank you, convener. Good morning, Mr Hebbelswates. What bonus will you receive for driving for this new way of doing business and when will you receive it? There are no objectives, a bonus of all objectives for me to deliver this. I can't tell you how far that is from any of our thinking. We are talking about saving a business and avoiding the irrecoverable loss of thousands of jobs. My personal bonus schemes have got nothing to do with this. We are talking about saving a business. We are not talking about me and how much money I get paid. If you could just answer the question, are you expecting to receive a bonus in this financial year or in the next financial year? No, I'm not expecting to receive a bonus. I have no idea what my bonus scheme looks like. Thank you. You've now had two ships detained by the Coast Guard on safety grounds. Will there be any more? I hope not, but we are working very—we are under a level of scrutiny and there are very, very thorough projects going on. We are working very, very, very closely. This is exactly how it should work. No ships will go out or should go out. There are anything less than absolutely safe. I'm not going to rush this. We're going to work very closely with us. We're going to give our fleet team full support. We're having an open book arrangement with the regulators. We're in regular dialogue with the regulators. This is how it should work. Ships should be passed as fully safe, and never has there been more thorough approach to it by us or the regulators. We fully welcome that. You don't sound very confident, Mr Heppethwaite. Do you understand why many passengers are cancelling their ships and also want to boycott PNO ferries? I am absolutely confident that no ships will be going out that are not safe. No ships are going to see that they are not safe. If there is any ambiguity in my answer previously, please let me be 100 per cent clear about this. We have always said that we don't have a business unless we have a safe business, and no ships are going out to sail unless they are safe. As assessed by us and the regulator. I have been looking back at your comments to the select committee at the House of Commons last week. We know that you fired 800 experienced workers with an average service of 20 years. You sent in security guards with balaclavas and handcuffs. It is an extreme act of corporate terrorism. The select committee published its ruling yesterday, and it ruled that you are not a fit and proper person to run a company that operates critical national infrastructure. When will you design? There is quite a lot in that. I want to be absolutely clear that there is a lot of press that is frankly inaccurate. We did employ a security firm of professionals to keep our ships safe, but much, much more importantly, our people are safe at a very emotional time for them. The facts of the day, rather than the headlines of the day, the facts of the day, no balaclavas, none of those things that were reported on and there wasn't a single incident, not one, of anybody being hurt, of anything inappropriate happening. Those are the facts of what happens. I am just listening. I am trying to believe you, but you have confessed to being a law breaker, so it is hard to believe anything that comes out of your mouth. To be fair, I have accepted responsibility for failing to consult. We are compensating people in full for that. I have apologised to 800 seafarers and their family, and I continue to do that, but I must reiterate that we are talking about saving thousands and thousands of jobs that would otherwise have been irrecoverably lost. My resignation is that I have no plans to resign, and I need to see that through. I need to get this business back up on its feet. I need to make it competitive, viable and give us an opportunity to grow in the future. Service the needs of Northern Ireland and Scotland on a route that I believe is incredibly exciting. Mr Hebbelswate, you are leading the committee to believe that P and O ferries is somehow unique and special and above the law, and it sounds like you have convinced yourself that you are a saviour, that you are saving workers rather than throwing them overboard. The truth is that you are a failure of a chief executive, and most likely right now in a crowded field the most hated man in Britain. I just have a final question. Mr Hebbelswate, under your leadership, P and O ferries has executed one of the most widely condemned decisions taken by a UK company. Your ethics are lying at the bottom of the seabed. How do you sleep at night? It was a very difficult decision. It was a decision that we implemented as effectively the only option that, in our opinion, we had. It was a decision that was, as I reiterate, designed to save thousands of jobs. I have heard enough, and I can be right back to you. We have heard that you will not resign, but what will it take for you to resign? What needs to happen? I do not know the answer to that. I have had to make an incredibly difficult decision. I do think that it was a better decision than closing the business. I think that we had to implement that decision in a very difficult way. I do not think of myself as some kind of saviour, as your colleague suggested. That is not how I mean to come across. I apologise if it is how I have come across, but I do think that we are talking about binary decisions here. Very difficult decision, but give the company a future. Or do not restructure the company and close it. I am not entirely sure that your sacked employees will agree with that one. Can I ask my colleague Emma Harper? She was down at Cairnryan last week, and she was speaking to some of the folk that have now been sacked. They were raising some really serious concerns in regards to how a new crew can be health and safety trained to a competent standard so quickly. Can you explain how long that will take, and are you confident that they will be trained to a competent standard? Yes, I am confident that they are more than confident that they will be trained to the appropriate standard and that we will not let any ships go out to sail until they are deemed absolutely safe by both us and the regulator. I am not going to rush this. We all want Llan Cairnryan as a route back open and trading as soon as possible, but not as a compromise safely. I do not think that anybody would like that. How long do you think that training will take? I am not actually going to be drawn on an answer to that, not because I am being evasive, but because I am not going to apply a time pressure, something that cannot be compromised. If I can go on to the pay in conditions, can you tell me what the difference is between the sacked crew and the new crew and the differences in pay and terms and conditions? What are the new crew not getting that the old crew did? Again, there are fundamentally different models. There has been a lot of focus on national minimum wage and the discussion that is being carried out in the public. Just to be absolutely clear, on Llan Cairnryan we always had to pay national minimum wage and we will continue to pay national minimum wage. From that point of view, there is no change from the old model to the new model. The difference in the model is not about rates of pay. It is about, particularly on Dovercally, where we have to recruit four full-time crews, whereas the new model means that we only have to pay for two crews when we work. You are saying to me today that every member of the crew will be getting paid exactly the same as what the old members were getting paid and their terms and conditions have not changed. So they will still be receiving holiday pay, employer pension contributions and sick pay, for example? The terms and conditions will change slightly. No question about that. We are now moving to a model that is consistent across all of our routes, but my answer was about national minimum wage, which we will continue to do. The new operating model is not directly comparable. We cannot, this is not an apples and apples thing, but in question 2, will we be paying national minimum wage? Yes. Will we also be making pension contributions, pay for their food, pay for their travel, pay for accommodation? All of that is yes. Is that included in our wages? Is that what is bringing down the terms and conditions? I am still to hear what the differences are to the terms and conditions and maybe I am just not hearing them. I just cannot understand that if there is no change to pay and very little change to terms and conditions, why did you feel the need to sap 800 people to take on new people under new contracts? The vast majority of the impact of that is on Dover, Calais. From your perspective, I do not really think that it matters where it is happening. That is fair. Fundamentally, instead of having to employ four crews, we now only need to employ two crews when they are working. That is the major, major fundamental change. Is not anything like it as much about rates of pay as has been played out in public? That is about a fundamentally different operating model. I still do not think that I am getting much of an answer. I think that I will just pass it back. The passengers will be worried about crews that are not getting paid for half the year, so those crews will have to find other employment for the rest of the year, which means that they will be very, I suspect, extremely weary and tired when they are operating on your ferries. Is that not in and of itself a safety risk? Should, as we expect the UK Government to decide that the payment of the national minimum wage will put you on the same requirements as your competitors, for example Irish ferries, as you refer to in your letter, what is the benefit to MD apart from risk to passengers with crew that are very tired and weary because they have to supplement their income because you have halft the time that they are available for work and paid? It is quite important just to, I did not say that they would be tired and weary, this is an absolutely safe model. This is a model that is used in 80 per cent of shipping around the entire globe. We recognise the intensity of each of our routes and we will put in place appropriate rosters to reflect that. As I reiterate, this is not about us moving to a competitive model, this is not about us undercutting other arrangements, this is about moving to a competitive model. The safety, I assure you, it is safe. I assure you, no ships will be going out to sea that are not safe and, as I say, this is a model that is used in 80 per cent of shipping around the globe. Thank you, convener, and good morning, Mr Heavill-Thrape. Given that your company was facing an imminent collapse, can you outline how the remuniation for senior staff and executives has been reduced alongside that of seafarers? The board level pay has reduced by about 50 per cent in the last couple of years, and we are going to make further changes and reduce the size of the board very shortly. Thank you. In a response to one of my colleagues, you stated that this is not about you, however, I do understand that your salary is over £300,000 before bonuses, something else again picked up by my colleagues. Can you confirm if you took a pay cut to protect the future of the business or did you ensure that your own interests were protected to the detriment of those 800 people who were unlawfully sacked? I was promoted into this job and, given a pay that is consistent with the market and this particular job, I recognise that there are different levels of pay throughout an organisation, but I can assure you that we have reduced the cost of our senior management by as much or more than we have other parts of the business. Can I just confirm in terms of yourself that that is a no then? Have I received a pay cut? I have not received a pay cut. Obviously, we understand that some employees are being paid $515 an hour, which is above the international transport workers' federation pay rates. Would you be happy to work for $515 an hour? The £5.50—I would like to just qualify that if I may for a moment—was for the non-officer group, the group that we call ratings. If you include the officers, clearly the average rate is much, much higher. I do not think that seafaring is all about money. I think that people love it, and that is one of the main reasons that I regret so much, the very difficult decision that we had to make. Your question to me is whether I would work for £5.50 an hour. I have chosen a particular career and a particular route through that, and it has led to me sitting here answering questions—totally appropriately—positioned questions about a very difficult decision that I have had to make. I did not choose a path that led me out to be a seafarer. I was more, would you be happy to work for a £5.50 an hour? I appreciate the comments that it is not all about money, but when you have a family to feed yourself to feed, that is probably not music to everyone's ears. As I said, it is important that this is an international standard of shipping. There is crewed by international crew and we pay above the standards by which we are expected to include national minimum wage and ITF rates. It seems to have been a largely profitable business up until around 2019. Would you not say that recent losses are the result of Covid-19, rather than some fundamental challenges to the business? I sure would not. I think that Piano has not been competitive for a while. I think that it has been in decline for a long period of time and I think that Piano is a business that must become competitive and viable. Can you elaborate on why the company was facing the imminent collapse, which caused this vast amount of redundancies, despite other operators being able to survive without such drastic action? We work in an increasingly competitive environment, as lots and lots of companies do. The reality is that all of us need to move with the times to be able to compete. We, as an organisation, have struggled with this decision for a while. We have been aware that it is an option. I think that it no longer became an option to expect our shareholder to unconditionally and indefinitely carry on funding a business that was not viable or competitive. Okay, thank you. I have no further questions. Thanks, convener. I'll pass back to you. We'll now move on to Brian Whittle. Thank you, convener. Good morning, Mr Hebblewaith. One comment that I would suggest to you is that the new rate regime has not changed the rate of pay. However, what is important is in your take-home pay at the end of the month. That has significantly changed those who it has affected. I want to go back to a point that the convener made early on. When the annual accounts were signed on 10 December 2021, you must have had to be a viable business. Of course, it is illegal to trade insolvent. Three months later, you are asking us to accept that P&O was in such a financial crisis in that period of time that you had to let 800 staff go. Is that what you are asking us to accept, Mr Hebblewaith? P&O has been supported to the tune of hundreds of millions of pounds by our shareholder, who, on a do-thing-this-is-an-important point, never once received a dividend for all that support. It is not appropriate any longer for me to run a business that requires to hold a support with no plans to change and become viable. Therefore, we concluded that we needed to bring about fundamental change in the business so that we could stand on our own two feet without the indefinite financial support of our shareholder. I say to you that, as international businesses of the size of P&O ferries, it is not unusual for the finances to swing from positive to negative in the numbers that you suggest. As I am going back to this again, you could not trade and solve it. In December 2021, P&O was a viable business. Why in that three months has it collapsed so much? With our shareholder support, we are now having to change the business so that we can be a viable and competitive business going forward. I cannot comment on other shipping firms. I have watched the story develop, Mr Hebelthuy, and I would suggest that you and the board are not stupid people. In taking the decision, you must have thought through all the repercussions that may happen. You must have known that there would be significant pushback at the level that it is. You must have known that that would not be allowed to happen. I ask my question to myself and to you as I wonder what the outcomes that P&O is driving at here because you know that you will not be allowed to deliver this in the way that you have delivered it. I do not think that we know that. We will see what the Secretary of State has to say. Of course, we will comply with all that. We are very clear that we have not done anything illegal. You told me that you already admitted that you did something illegal. You broke employment law. You have already admitted that. That is not what I said. What I said is that we failed to consult. For that, we are compensating people in fraud. The headlines are not consistent with what I said. What I said was that we failed to consult and we are compensating people for that. That is different from illegal. We are very confident that we have not done something. If the laws change going forward, we, of course, will comply with those. As I said, that is a fundamental change that moves us on to a level playing field with 80 per cent of global shipping. I think that you will find that when you break the law, that is illegal. However, I cannot accept that you have not considered all eventualities here. You must have known that what you were about to do was going to have significant pushback. I will tell Mr Herbethwight what outcome it is that you are driving for, but I do not believe that you thought that that would be acceptable. I think that there is a question not to leave that unresponded to. We are genuinely trying to save a company. We are genuinely trying to make it competitive and give it a future. That is the outcome that we are driving for and I will bring in Graham Simpson. Thank you very much, convener. Morning, Mr Herbethwight. You mentioned the shareholder quite a bit. Was the shareholder putting pressure on you to do this? No. So, if the shareholder was not putting pressure on you to do it, why did you do it? The P&O board may include it, believe it is no longer appropriate and possible to expect a shareholder who has supported us and the UK economy to quite extraordinary lengths, having never taken a dividend from P&O since owning it, is no longer appropriate or possible to expect the shareholder to unconditionally and indefinitely carry on funding a business that has no plans to make itself viable. However, if the shareholder was not putting pressure on you to do it, then would it not have been sensible to ask the shareholder if they were happy with what you were planning and if they were content with the current arrangements? We had to go to the shareholder for funding. Of course, we went to the European board and we explained our proposal and we gained funding for that. Ultimately, this was a P&O board decision. It did not come from the shareholder. You said earlier that your words were a unique situation. There is nothing unique about companies getting into trouble as you describe it and having to make changes and potentially making redundancies. There is absolutely nothing unique in that. The difference here is that any other company would have gone through proper process, so why didn't you? We have always consulted in the past and we will consult in the future. This was a unique situation. It was our assessment that all routes—believe me, we considered all routes to how we might implement that very difficult decision. Our assessment was that no union could accept our proposal because of the dramatic nature of making a step from our old career model to a new career model. Therefore, consultation would have been a sham. Therefore, in the event that you failed to consult, we are required to have and will fully compensate people for that for the tune of 13 weeks. What was unique about the situation? You have not explained that. Because it was about fundamental change or close the business. In 2020, when we very sadly had to make some redundancies there, we were not at that point looking about something as dramatic as closing the business. This time, this was different. This is a business that needs fundamental change to be able to compete and survive. It needs major steps, of which this is one, and it is by far the most difficult. We concluded that no other route was available to us other than closure. There is absolutely nothing unique about that. Many other companies have faced the same position, and they take a more honorable route than you have chosen. Can I ask you about Grant Shaps? He has written to you and the convener mentioned earlier that Mr Shaps may be bringing in some law changes. If he does that, how will that affect your business? I do not know. It is difficult for me to comment on some changes that we have no sight of, but of course we will comply with what we are required to. Of course, the changes could affect rates of pay. You said earlier that it was not about rates of pay, so presumably you would not be too concerned about that. Is that without the case? We pay national minimum wage on routes that we are currently required to. Llan can run, which I imagine is of particular interest to this committee. We are required to pay national minimum wage, and we do pay national minimum wage. I have one final point to make. Natalie Don asked you earlier about whether you would be prepared to accept £5.50 an hour. I do not think that you would be, because I did a quick calculation on your basic pay, not bonuses, and you are on a princely £156 an hour. That is pretty good going. How do you think that the sacked workers think of you when they look at that kind of rate of pay? As I say, I have chosen a route through my career that has led to me to be sitting here in front of you today answering totally reasonable questions. I did not choose to become a seafarer. I reiterate my heartfelt apology for this difficult decision and how it has impacted 800 seafarers, 39 of whom live in Scotland. Can I ask will the new crew be unionised? The crew management company will have recognition with ITF. It is not for an employer to decide what a union thinks or will respond, it is for the union to decide that. Why did you not respect that fairly fundamental basic principle of employer-employer trade union relations? I do not believe that we did not believe that any union would possibly have accepted our proposal given the fundamental nature of change that we were potentially going to have to propose. If I can move on to further questions on your shareholder, which you have put great store by that you wanted to oblige the shareholder, even though you are saying that you did not instruct you to carry out the actions that you did. Your shareholder has fundamental interests globally, but it also has fundamental strategic interests, for example, in free ports that are currently being developed by the UK Government and green ports that are developed here in Scotland. Do you not think that you are jeopardising not only the reputation of your shareholder but also the strategic aims of your shareholder and that that may prove counterproductive in their interests? I am not here representing our shareholder, so I cannot speak for them. What I would reiterate is that our shareholder is an organisation that has invested over £2 billion and invested more in the UK economy than any other country that it operates in and out of, apart from the UAE, and has been very supportive. Clearly, it is a regret of mine that it has been drawn into this, but it has been very supportive of this business. I bring in Monica Lennon as a supplementary on this before I come to Liam Kerr. I thank you, convener. On the back of your questions, it is clear that Mr Hepple's weight and penile ferries do not respect trade unions. I think that you have just picked a big fight with over half a million trade union members in Scotland, although I never mind the rest of the UK. You had a chat with the First Minister last week. She may have talked to you about the importance of fair work and the fair work convention in Scotland. Right now, there are calls for a boycott of penile ferries and for your company to be effectively blacklisted so that you do not benefit from any public project or public money in the future. If you and AP World are not allowed to be part of a free port in the future, is that a price worth paying for your new way of doing business? It is important that I come back on where you started this. I absolutely respect unions, and we will continue to work with the unions that we work with. This was a radical change that we had to bring about in it, and we just did not believe that a union could possibly accept what we are proposing. I do not think that it is right to say that it does not mean that we do not respect them. One of the principles of fair work is effective voice. You chose to silence the workers and our unions. How is that showing respect? I have full respect for the unions. We will continue to work with all of the unions that we have representing our workers. Hebbelswade, I understand that there are a number of land-based employees of P&O, many of whom will be based at Cairn Ryan. Does P&O have any strategic plans, whether they are finalised or in draft, which would impact them in some way? Obviously, if they are to be restructured, chupied or dismissed, they would be legitimately concerned. No, we do not. Obviously, all parts of our organisation. The Cairn Ryan port is very important to us. We have invested over £40 million in the port. I think that Llan Cairn Ryan is a very exciting opportunity for us to go forward, but the specific answer to your question is no, I do not have plans to make those changes. I will just push that point if you do not mind, Mr Hebbelswade, just for absolute clarity. You are telling this committee that there are no strategic plans, whether in draft or finalised, to do anything to the land-based staff at Cairn Ryan. Is that correct? What I think that you are referring to is a paper outlining options for us to look at how we ran the Cairn Ryan port, none of which were taken forward. There is a document that exists to that effect, but it is from a number of months ago last year, none of those options have been taken forward. That seems to be a slightly different answer to the first one that you gave me if it was respectful to Mr Hebbelswade. I wonder if that is going to be published and publicly available. The land-based employees, one would have thought, would need to know the details. The land-based employees have seen that paper, as have the unions. It was a private document that we went through as all businesses go through in terms of looking at options available. We considered a number of options, as all businesses do, and we chose not to take any of them forward. I have had this conversation with the union and I have had this conversation with the shore-based team in Cairn Ryan. One final thing for me, convener, if I may. It is something that my friend Monica Lennon brought up earlier, which really does trouble me. Mr Hebbelswade, you accept that you willfully, consciously and knowingly broke the law. You offended against UK employment law, a law that the Parliament felt so important that it attached a protective award to it to try and mandate compliance. Does that not trouble you as a company director and make you question whether you are truly a fit and proper person and discharging your fiduciary duties to your company if you are content simply to break one of the strongest laws that Parliament has sought to put in place? To be clear, we failed to consult and we are compensating people in full, absolutely as we should and upfront. My duties as a director are to make this business viable going forward and I was paced with the option of a program of change or the closure of the business. As a company director, I took the only route available to me to preserve thousands and thousands of jobs. That is not your only duty, Mr Hebbelswade, is it? You have fiduciary duties and you have legal duties as a company director. What I asked was whether you considered that you are a fit and proper person who is discharging those duties, not merely the one that you have talked about there, but the full raft of fiduciary duties to your company when you willfully and knowingly took a decision to offend against one of the strongest laws that Parliament has sought to put in place? I did consider that and I believe that I have discharged those duties. No further questions, convener. Going back to the Cairn Ryan seafarers, if you do not mind, Cairn Ryan is a domestic route and pay and do need to comply with the UK employment law at Cairn Ryan and for the staff on that route. Why are the Cairn Ryan seafarers included in the sacking, especially when the new staff are being paid the same as the sacked ones that you said to me earlier? This is about implementing a crewing model that is consistent throughout our organisation, a crewing model that is consistent with 80 per cent of global shipping. Are your questions wide because we are implementing a crewing model, a fundamental change across the whole of our business? It is not an apples with apples thing. We are moving from one crewing model that was uncompetitive and made us unviable to a totally different thing that is consistent with 80 per cent of global shipping. With all due respect, you said to me earlier that the new staff are being paid the same as the sacked ones. Why is the Cairn Ryan seafarers included in that? That is not what I said. What I said was that we were required to pay national minimum wage on the line Cairn Ryan route and we were. In the new model, we are required to pay national minimum wage and we will, of course. You said to me earlier that the pay was the same and the terms and conditions were slightly changed, but not a lot. That is why I am asking why you need to sack the Cairn Ryan seafarers. To be clear, in reference to the rates of pay not changing, I was referencing national minimum wage that we previously paid and we will absolutely be paying going forward. That is not about Llan Cairn Ryan, but about us having a crewing model across the entire organisation that is consistent and competitive. I am sure that there will be some comfort to know that it is not about them. I thank you for attending this session, Mr Hebethwaite. In my 20-plus years as a member of the Scottish Parliament, I am not sure that I have come across an issue with an employer that has united unilaterally right across the chamber such hostility. The people that we represent, our constituents, even those who are not in the south of Scotland or in Cairn Ryan, are absolutely disgusted and dismayed that a company of your reputation and your shareholders' reputation has treated people with such disrespect and lack of dignity at work. I thank you for taking the time to attend this session and we will discuss the evidence that we have received later in this meeting. I now close the public part of the meeting. I wish everyone a restful Easter break. Unfortunately, that will not be the case for the many P&O workers that have suffered at the hands of the chief executive.