 Welcome to the fourth meeting in 2015 of the Economy, Energy and Tourism Committee. I have a welcome for our witnesses who will be joining us shortly in the gallery. I remind everyone to turn off or at least turn to silent all mobile phones and other electronic devices so that they do not interfere with the committee's work. Item 1 on the agenda is to continue our inquiry into the economic impact of the creative industries. I would like to welcome, this morning, joining us from the Scottish Government. We have Fiona Hyslop, who is the Cabinet Secretary for Culture, Europe and External Affairs. John Swinney, Deputy First Minister and Cabinet Secretary for Finance, Constitution and the Economy, and they are joined by Stephanie Simber, who is Senior Policy Officer at Creative Industries and Michelle Campbell, Team Leader, Media and Creative Industries. Welcome to you. Before we get into questions, Fiona Hyslop, do you want to say something by way of an introductory statement? Just very briefly, convener, I would just like to say how much I welcome the committee putting a spotlight on creative industries. It's one of our key sectors. It employs more people than oil and gas. It contributes more to growth of our yardage and economy than life sciences and, as I set out my written evidence, it covers a range of areas that are very important to the economy and, in terms of the value, it adds to our interests there. The one thing to particularly stress—I think that it may have come through in the evidence that you have—is that you can't build a successful creative industry sector unless you have a strong and vibrant cultural sector more generally. That really is the lifeblood of the creativity that can then find expression in a whole range of the different sectors that you have been examining. Obviously, you have been focusing in particular areas, but if you look at the areas of whether it is architecture, fashion or design, in terms of crafts, a whole range of areas such as IT, museums, galleries and the music industry, Scotland is in a strong place in the cultural sense. Obviously, the opportunities for industry to grow is really important. I think that the efforts from the committee to not least with your showcase that you hosted here at the Parliament was a good example of making sure that there is greater awareness of that area and its contribution to the economy. We have about 90 minutes. I know that you need to be away by 11.30, so we have about 90 minutes for this session. There is a range of areas that members will want to cover. I would ask members to keep their questions short and to the point and answer similarly short and to the point that will allow us to get through the topics in the time available. Can I maybe just start by giving a very brief summary where I think that we have got to with the evidence, because we heard from three specific sectors. One was games, one was TV and one was film. Clearly, there was quite an overlap in terms of the interests, but to try and characterise the evidence that we heard, I would say that the games industry has challenges but is generally quite optimistic in terms of its outlook. I think that in relation to television, there are challenges in television, but probably the most serious issues that we heard were in relation to film. We heard quite a lot of concern from people in the film sector, including many film producers, about what they felt was a lack of a joined up approach from public bodies such as Creative Scotland and Scottish Enterprise. In fact, one person who gave us evidence said that he thought that the relationship between Creative Scotland and Scottish Enterprise was like a failing marriage. We also heard quite a lot about what they felt was a lack of public sector leadership in relation to the policy area. Did that come as a surprise to you? In a sense, there has been a development of the relationship since the establishment of Creative Scotland as a new body with Scottish Enterprise. In terms of the challenges and issues, you see the challenges of working across different sectors, not just in creative industries but obviously there are other key sectors such as food and drink, life sciences and energy. You will see the relationship since the supply of support from a range of public services. The key is how you can respond to industry needs. One of the things that was established was the Scottish Creative Industries Partnership, which brought together not just Scottish Enterprise and Creative Scotland but other players here. Scottish Funding Council, if you think about the investment, for example, in the University of Aberty for computer gaming, you heard a lot of evidence about the importance of skills and investment there. Skills Development Scotland is developing the skills investment plan for creative industries, so there is not just a relationship that is important between Creative Scotland and Scottish Enterprise. There are other sector interests as well, and the important thing for all of us is to make sure that they are marshaled, co-ordinated and facing the response from whatever sector they are doing with. Obviously in creative industries, as I explained, there is a range of different areas, but I recognise the challenges, particularly in the opportunities and the ambition for the film sector. That is why we are making sure that cross, whether it is ministerial portfolios or public agencies, they have to work well and work well together. You recognise the challenges, so I take it from that. Some of what we have heard did not come as a surprise to you. What are you now doing to take that forward? Part of that is the important work of the Creative Industries Partnership, making sure that in terms of skills development there is support. That is why that plan is coming forth from Skills Development Scotland, working with all the agencies. Yesterday, I announced £1 million of development funding. To give you an example in terms of our support, the development funding will be administered by Creative Scotland, but obviously heavily influenced and informed by the Creative Industries Skills Plan that has been put together by Skills Development Scotland. Production is a challenge. We know that we want to get more investment into actual production. The announcement that I made yesterday of £2 million of a loan fund is to help with the cash flow in terms of production so that they can maximise the tax credits that are available from the UK Government. Again, a big incentive has just been delivered, so that is a welcome development. Again, that will help the production side. It is not the end of the journey, it is certainly a significant contribution. The third element is obviously on the studio, and there is very active involvement and engagement, even as we speak. I set up the film studio delivery group, which brought together Creative Scotland and Scottish Enterprise to work more closely together, particularly to deliver in that area. That is an example of where agencies are working together. I think that the test will be on the delivery, and I think that that is what obviously people are interested in. In the different sectors within Creative Industries, we are probably at different stages of how that contribution is being made. As you have seen in your own evidence, there is a difference between the gaming sector, for example, and the film and television that you have just identified. I would add to what Kevin Stewart said. The support that individual sectors of the economy require in the complex world of which we occupy will rarely come from one particular organisation. If we look at any sector of the economy, there will be skills development requirements, business development requirements and particular sectoral development requirements in that area. If we leave Creative Industries for a second and go to the food and drink sector, for example, there will be business development requirements provided by Scottish Enterprise, there will be skills development requirements provided by Skills Development Scotland, and there will be particular technological and product development solutions that will be provided by agencies of government or alternatively by higher and further education institutions and other research institutions. If that example illustrates that, we have to make sure that we draw together all of that expertise to make it available to those individual sectors. That is what lies at the heart of what we try to do in each individual sector, and to ensure that sectors are properly and fully supported and have access to the range of skills and expertise that can enable them to realise their full potential. In the Creative Industries sector, you have Creative Scotland providing the creative development element while supporting the creative development process. You have Scottish Enterprise delivering the business development process and Skills Development Scotland supporting in the development of skills. Some of that will apply, for example, in the gaming sector. The very close proximity that a number of companies have with academic institutions provides them with a very direct channel of taking forward their interests in relation to the development of skills and the potential of individuals. We have to make sure that, at all times, that is joined up, works effectively and works to the satisfaction of individuals who are involved to the best of our ability. You have both raised a range of issues, which I think that you want to get into in more detail. I mean, there is a question of public sector leadership, the question of the film studio that we want to get on to. Before I move on, I just want to go back to you for and ask you about this announcement. Yesterday, £3 million, £2 million for a tax credit loan fund and £1 million for the screen industry skills fund, which I know was welcomed by the sector. Given that it was announced yesterday afternoon, is it just a coincidence or have you just announced this because you were coming here this morning? No, I think that it is a coincidence that you are having this in quite the same time. John Swinney announced himself and met with the film industry, represented by the IPS, back in February and August. Those were the issues that were discussed with them. Obviously, we are in the process of delivering the 15-16 budget. Obviously, the £1 million development fund is from the 15-16 budget. You will identify in page 108 of the draft budget, the financial transactions that I secured for the culture portfolio. Much as you might want to take credit for this, Mr Fraser, I say that these were plans that were in train. Obviously, it is not in terms of the Government to dictate the timing of an inquiry. I would welcome the inquiry, but in terms of the delivery of the skills investment plan from Creative Scotland and the creative industry strategy and, indeed, other areas, there will be significant developments over the next few weeks and months. However, a lot of that has happened in train. If anything, people's frustrations might have liked those announcements sooner rather than later. However, I think that it is a happy coincidence. I will add the particular issue around financial transactions. This was an issue that emerged out of the discussions that the Cabinet Secretary and I had with the independent producers, where they put to us a particular problem that was about increasing the scale and significance of film projects that could be undertaken in Scotland because of the access to external investment finance. What struck me in the conversation was that the difficulties that they were having in accessing that finance from the wider private sector could be resolved by us making available some of the financial transactions that are available to us to deploy. The Cabinet Secretary made a proposition to me during the course of the budget process that this was a possibility. As we are finding—and I think that the committee will be aware from the general scrutiny of the budget process—the design of schemes to be compatible with the use of financial transactions is not an easy process. It takes time. We would dearly have loved to have cleared this off earlier than we were able to do so. However, we have to be satisfied that the basis on which the finance is being offered can be paid back, because I have an obligation to pay it back to the Treasury as part of the arrangements around financial transactions. It is not a simple proposition of distributing grant finance. We have to be satisfied that the proposition is coming forward. Loan finance was what was requested of us by the independent producers, and it is loan finance that we have delivered, but it is loan finance that we have to be satisfied that we are able to pay back to the Treasury in due course. There was an announcement from Fiona Hyslop in October 2013 of a £2 million loan fund for studio development. How much of that money has been spent? It requires somebody wanting to have the loan to invest in from the private sector. You know that what we have done with the film studio delivery group was to put out a call for applications for private sector investment in a film studio. If they chose, they could access that loan facility. That has not been withdrawn down because there is not a proposal going forward as part of that original private tender process. I can tell you that Scottish Enterprise has a new proposition that has been put forward that would provide the specification that we have been looking for in the development brief that we put forward last year. Should that be successful, that would provide the highest sound stage of any location in the UK. That would be a significant step forward in providing a large studio space, particularly for inward investment, but the challenge for film studio is not just about inward investment of large productions, but it is also supporting the indigenous film industry for a smaller scale. That is a live and current discussion. I cannot give you extensive information, but that is a moveable feast. That means that it is on request and that you have a proposition that somebody is asking me for that loan facility, and that stands, and that is still available. We will come on to the film studio in more detail, but I just wanted to very last question with that before I move on. On this general point, you had an announcement in October 2013 about a £2 million fund of which not a penny has been spent. You were at the committee today and announced by coincidence or not yesterday afternoon another £3 million. It all looks a bit like a sticking plaster approach, does it, rather than demonstrating leadership and having an overall strategy to take the film sector forward? No, I disagree with that. If you look at the funding element, when Scottish screen was in existence, it invested £3 million in film. The latest figures are from creation of Scotland are at £8 million. That is a significant increase. That is also a time that we all know across. I am sitting next to the finance secretary. I am careful about my remarks here, but at a time of very difficult budgets across all of government. If you look at the investment in screen when we came into power, the investment in screen was £16 million in 2013-14. It was £21 million. The announcement that we made yesterday will take that to £24 million. That is significant. Would we want to see more investment in production other areas? Yes. There has been progress and there has been movement, but there are opportunities. How do we realise the scale of ambition and opportunity that there is in the film industry? I share that with the film industry, but the pace and activity are also dependent on a great deal on the private sector. Those discussions are not something that we can dictate. I am sure that the committee in the wider scrutiny of other areas knows the challenges. Government cannot dictate to the private sector what it does. We have to work in partnership, and that is what we have been doing. Good morning. In the Scottish Government paper that we received, it said that the Scottish Government is providing funding of around £52 million in 2014-15 to enable Creative Scotland to fulfil their role as a national body. A year before that, it got £4.2 million, all of which was the lottery funding. Who is monitoring the actual spend in relation to the strategy? In terms of Creative Scotland's own spending, some of its funding comes from the Scottish Government. A significant amount has come from lottery. What I have managed to do is to protect Creative Scotland's funding and its cultural funding overall. I also set out in my last reply the increase that Creative Scotland has had in its spend on film. It went from around £3 million in 2007-08, and it is now about £8 million. In terms of the scrutiny of where they spend their money and how it is quite clear from the legislation—it is not just in Creative Scotland but in Historic Environment Scotland, as will be in Scotland. It is just now in the National Library of Scotland. I am prevented as a minister to direct them on curatorial issues. The decisions on what they spend and the films that they spend on investing are a decision for Creative Scotland. It is not my job to say that you will spend on that film but not on another film. If you look at attracting inward investment for locations, you have seen World War Z. If you look at Outlander, you have also seen some of the films that they have invested in very successful films. Creative Scotland has been investing in successful films, but I will make this a very important point. We are dealing with the creative sector and the cultural sector. You have to have yes successes commercially, but to develop the conditions for great and creative content to come through, there will be films that will not be commercially successful, but it is really important that Creative Scotland still supports that sector, because from that you will eventually get some of the successes that come through. They have got that balancing act. They have to have that creative leadership. I cannot, as minister, direct them or interfere with the decisions that they make on that. However, I can make sure that they support the film industry, and they are very focused on doing it. I am delighted that they have now appointed a director of film appointed in the past few weeks. Obviously, a few weeks ago, I also announced the new chair of Creative Scotland. He comes from a film and television background, as well as having previously experienced in theatre. I scrutinise what they do, but they are also very focused on the film industry. Perhaps we will start with our cabinet secretary, Fiona Hyslop. One of the main criticisms that has been coming through the evidence, both written and oral, is that there seems to be a lack of leadership in the industry. That leadership seems to be confusing and conflating some of the problems. We have heard this morning that you are saying that it is very diverse, and obviously there is the creative industry's partnership as well. However, does it lack leadership? I think that Mr Swinney was also saying that there was no appropriate expertise. Does it lack the leadership? Does it have the expertise to take it forward right through film, television and gaming? There are three very diverse groups. Two points on that. In terms of the responsibilities, Creative Scotland has the leadership and co-ordinating support for the creative industries working with all the agencies. We set up the creative industries partnership five years ago. They chair that, and that brings us to the table, Scottish Enterprise, Hans and Alice Enterprise, all the different public agencies, funding council, Skills Development Scotland. That is part of their responsibility. As John Swinney pointed out, the business development contribution comes from Scottish Enterprise. In terms of the focus that it has, it is also important that the industry articulates what their wants and needs are. I am sure that, in all the evidence, you have heard a lot of articulation of the wants and needs, not least of the film and television sector, but one of the things that I was very encouraged by and supported was the establishment of independent producers Scotland, IPS. I met them when they first established. I encouraged that body to develop because it is really important for all public agencies to not just respond and coordinate themselves but to work with industry. Industry has to take a lead on that, in terms of articulating what that ask is, whether it is skills or production. We have responded with the announcement that, yes, there is another work that is on-going and will continue, so there needs to be industry responsibility but also public sector. In terms of the public agencies, it is quite clear where that leadership should lie, but the key players—I think that is what you are coming to in a lot of the questions that you are asking of me and previous witnesses—is in relation to how Scottish Enterprise and Creative Scotland can bridge what is the attention between creative talent and business opportunities. That will always and has been an issue, and we need to get better at dealing with that. I acknowledge that. In terms of ministerial responsibility, obviously John Swinney takes the responsibility for economic development and growth. Each of us as ministers has a key interest in the key sectors. Obviously, the health secretary has a key interest in life sciences, the rich lockheads have a key interest in food and drink, and in creative industries, I take a leader in responsibility to have an overview of what government can do in this area. I have one of the smallest budgets in the sector, but it is important to work with the private sector as well as other agencies to maximise what we can deliver. Despite constraints over my budget over a considerable amount of time, we have seen actual increases in funding, investment and film. I would like it to be more, and we will work with the sector to improve that over the peace. Creative Scotland last week suggested that it is part of—it is looking at appointing a new various directors to try to manage the diversity that we have, but it also said that they could do better, but that probably is dependent on getting more funding. As a number of ages, we have obviously heard directly from them that those questions are probably better addressed to themselves. Remember, the Arts Council previously did not have a role in leadership or co-ordination in creative industries. That was a new responsibility that was established when Creative Scotland was set up. Janet Archer has set out how she has made sure that there is more alignment with industry. I think that that is to be welcomed, and that is why, with Natalie Usher being appointed as the director of film, that was the last few months towards the tail end of last year. That focus is on creative industries, but there are also synergies across sectors. Whether it is in gaming, digital or film television, if you look at the whole media, it is important not just to look at the silos of those industries themselves, but to look at Channel 4, for example, as a very good example, where we have worked with skills and development and funding with them, and how they have interactive and off-shoot gaming opportunities from some of their television production. It is important that the sector is seen in the round, not just in isolation of different elements. Again, I think that that was very good evidence that was provided to you from computer gaming, and how they are also reaching across different sectors, not just entertainment but health in other areas. The synergy across digital media is going to be very important going forward as well. On the computer and gaming, and to be fair to them in some respects, they were probably less critical of government in many ways, and they understood that the industry needs to take that lead. However, they were slightly critical about Scottish Enterprise in terms of the account management, saying that they tend to fall between the stools of Creative Scotland and a Scottish Enterprise, and certainly the account management. It is good to say that there is a system there that one size fits all, and it does not really fit what they require. Perhaps, Mr Swinney, for your answer, is there any flexibility in the role of Scottish Enterprise and the account management to assist the computer and gaming industry? There are a range of computer gaming companies that are account managed by Scottish Enterprise, and I have read the evidence that has come forward on that. I will obviously listen very carefully to what the committee concludes on those questions, and wherever the committee concludes, I will consider and pursue with Scottish Enterprise, because the account management system has got to address the needs of business within Scotland. Whatever that business is, the mandate that we have given to Scottish Enterprise is that the account management system should focus on companies with growth potential. That often gets confused, and I hear this shorthand frequently, that that is support for big companies and that small companies do not get that. I have visited two person companies that are account managed by Scottish Enterprise, and they are account managed because they have got growth potential. To answer Mr Robertson's question directly, there must be flexibility in the system to make sure that the needs of different and distinctive sectors are recognised and addressed by Scottish Enterprise in the selection of companies that are account managed. It is a key proposition that they must be able to demonstrate growth potential, but growth potential in one sector will look different to growth potential in another sector. Of course, there must be flexibility in that respect, but I certainly want to assure the committee that, for business development purposes, companies in the creative indices sector should have just as much right to attract account management support from Scottish Enterprise, just as they are able to access all the different ranges of business development support packages that we have available, whether it is through Scottish Enterprise or through ventures such as the Edge Fund, which are designed to support new start companies. Whatever sector they are operating, they have access to that type of support. I will look carefully at the evidence that has been marshaled in this inquiry and whatever conclusions the committee arrives at. One of those aspects would be to try and convey that information to the industry itself. They seem to suggest anyway that they do not have the information available to them, in some respects. There is a sort of breakdown in communication to the industry itself, and that is why they are probably calling for more clarity. Scottish Enterprise operates just now around 18 to 20 industry leadership groups that draw together various players in different industries to make sure that Scottish Enterprise, in formulating its interventions in the economy, is informed by the needs and the aspirations of business. Increasingly, we have been encouraging that discussion to spread across the whole range of different areas where industrial sectors and commercial sectors in the economy will have needs for public sector support. For example, on skills, the Government has mentioned the skills investment plan around the creative sector. That is a product of the dialogue with industry to make sure that our colleges and universities and our wider education system are actually putting in place the provision that will meet the needs of individual sectors. There should be a very open dialogue about what are the needs of different sectors within the economy and should be addressed by the conclusions that we arrive at from the interaction with public agencies, particularly with Scottish Enterprise. I wonder whether, in respect of going back to leadership and expertise, it was suggested that does the public sector have a role in encouraging mentoring as well? Clearly, in terms of business development, the support that we provided from Scottish Enterprise, the best people to mentor a specialist whether it is gaming or other is the industry itself. Helping to support the kind of network that can provide that is something that the public sector can do. The Scottish Games Network has been established again. There is mentoring there. It is about supporting the sector itself, especially new entrants. John Swin talked about the different leadership groups. There is an additional media leadership group, and that is one of the areas that, if that is a request from them, they want that mentoring supported. It is also about the industry itself supporting itself. However, if there is a kind of in terms of the specialist, the mentoring must come from the industry to itself. However, there are different aspects of that. One of the areas, particularly in relation to growing new businesses in the creative sector, a very good project is a programme that is started for six, which is run from the cultural enterprise office in Creative Scotland. It provides funding and support, but it is also a mentoring support for new businesses in the creative sector. Having spoken to a number of the companies that have come through that, what they have said is that the networking and the business mentoring and that is about the business development side has probably been as valuable to them as the actual investment itself. They might not realise it at the beginning, but that is also an example of what mentoring, particularly in the creative industry sector, is really important. I am sure that it is important in a lot of different sectors, but that is the feedback that we get as well. It is more about co-ordination and support for that. It is co-ordination and support, and I think that the industry acknowledges that they should take the lead in terms of mentoring. I do not think that they are suggesting that the public sector should do that. However, I think that there is hoping that the leadership would come from the public sector in terms of that co-ordination and trying to bridge the gap, because, in the private sector, they would find it very difficult to hold a directory of who requires that mentoring. One point that I would like to say is that there has to be an acceptance that industry needs to articulate its needs and its requirements. That is very welcome from the perspective of Government, because the more we can encourage industry to be very clear about what public sector intervention will be of assistance in ensuring that industry fulfills its potential, that could not be a more welcome approach from Government. To ensure that we can refine exactly what we can do to try to support the development of particular sectors of the economy, the more there is clarity of industry aspiration, the more we can focus public sector support to deliver on the aspirations of those sectors. One of the main criticisms, cabinet secretary, was the number of meetings that were taking place with Creator of Scotland and the industry. We had a number of 26 meetings, and last week, we were assured that perhaps the next meeting would be the meeting that will resolve the problems and take things forward. Can you respond to that? I do not have the detail of what meetings were had when, but I did hear the comments. I have come to this committee before I would have the opportunity to next meet with IPS to go through the announcements that we have made this week, which came as a direct response to one of the two meetings that John and I had with IPS. Those comments were made before the announcements and the progress. It is fair for people to identify if they have not seen progress from those meetings to be critical. I hope that they have now realised that there is progress, and the witness who made those comments is quoted in the paper to say that this is a start in terms of that dialogue and is encouraged by it, but she also indicated that there is more to do. I am sure that you welcome that progress as does the industry, but you would also acknowledge that it seems that the number of meetings that have taken place without progress was quite concerning. I do not know the detail of it. On one hand, public agencies and Government get accused of not having enough meetings with the industry, and then they get criticised for having too much. I am sure that there is a happy medium in there somewhere, but the most important thing is to make sure that you have good relationships, so that the industry can articulate what its needs are. It can be varied from different types of industries and, even within one area, you can have different demands and interests. That is what the balancing act has to be. How can you provide support, whether it is on the three elements in the film industry, for example, on development, on production and on infrastructure, that meets the needs of most of the industry? You are not always going to meet everybody's needs at the right time, but engagement is a good thing if you get results, and that is what is in the process of doing it. Results are what we are looking for. I think that Dennis Robinson mentioned the 26 meetings that were highlighted by witnesses. The critical thing here is not the number of meetings, but the conclusion that, in spite of all the meetings, nothing had changed. That was what caused concern. As Dennis Robinson identified, one of the discussions that we had was about the loan financing using financial transaction tax. It was not an easy process. There are a lot of considerations and accountability that the Government has. To identify how that package could be used, it has been used for other mechanisms. It has not been used in this area before. It is a pilot. We want to see how successful it is. That is important to note, but that will take working. That is not just meetings for meeting six. That is actually working out what it looks like. I am not privy to the list of 26 meetings that have allegedly taken place, but I think that the Parliament would be a bit surprised if there were not the necessity to have a number of meetings to make sure that loan funding that we are making available for which I am accountable to Parliament has not been put out there with a proper understanding of how that finance will be handled because of the necessity for it to be repaid. This is public money that we are talking about. Lewis MacDonald, I would have thought, would have been at the front of the queue to accuse me of not scrutinising matters enough to get points to a conclusion. There is a huge amount of detail that has to be undertaken about some of those questions. There is extensive engagement. We could go to other sectors of the economy, and we could have other sectors of the economy that could probably tell us about a vast number of meetings that have taken place. There are loads of meetings that take place all over the shop. We are all involved in meetings all the time, but it is about trying to ensure that we are progressing on an agenda in which we take everybody with us in getting to the right destination. On this question, I do not know how many of the 26 meetings I am guilty of requiring because I wanted proper financial scrutiny about the financial transactions. I do not know how many they have insisted upon, but I think that Parliament would be a bit surprised if I was not making sure that there was due process in place for the handling of public money. John Archer told us that one of the meetings that he had with himself last March was one in which he undertook to get Scottish Enterprise to support the film industry, and the evidence that he gave us a fortnight ago was that that had not happened. The bigger issue here is that we have heard a lot of evidence in this committee. We have not heard a lot of witnesses saying that we really need a £2 million loan fund, although I am sure that that will be welcome. I heard John Archer on the radio this morning saying that it was a welcome response from the Government and also saying that it was something that I had suggested as a response to what the industry was demanding. Absolutely, but what we heard from a very wide range of witnesses was their call for some clarity, some focus, some leadership from Government. I think that is the bigger picture, the bigger issue, and I think that is what we really need to get to this. I think that the position that has been set out with the Cabinet Secretary is absolutely crystal clear. Leadership on this question of the development of the creative industries rests within Government, with Creative Scotland and with the Cabinet Secretary for Culture. That is where leadership rests for development of the creative industries, but Creative Scotland and the Cabinet Secretary have a call on other players in the public sector to support the strategic efforts that are taken forward by Creative Scotland and by the Cabinet Secretary. I would want to give the committee the very clear assurance that any support that can be given to that process by other Government agencies, whether it is responsible to me in my portfolio responsibility as the finance secretary, the responsibility for Scottish Enterprise and Hans Hans Enterprise, will be made available to the culture secretary and Creative Scotland. In terms of my wider responsibility as the Deputy First Minister, if there is any involvement or participation required of other public bodies, I would make it my business to make sure that the Cabinet Secretary was supported in securing that. That is clearly appropriate that public bodies should work together. I think that the critical thing is whether the direction and leadership that is being provided is effective. I was very interested to hear John Swinney say that he would welcome hearing more of what the industry wants on the loan fund, he excited as an example. However, there have been other things that they have put here, which I suspect they have put to you directly. They would like, for instance, to have a task force led by a key film person in the industry to try and sort out the issues around remits and leadership and direction. I guess that they would like to have a sense that the Government takes seriously the position that the sector finds itself in. Alan Clements told us two weeks ago that, eight years ago, Scotland was number two centre of production for television programming in the UK and we are now down to fourth or fifth. He described that as an indictment of public policy. That suggests to me that, while you may be clear technically as to where leadership lies, is the leadership coming and if not, what can be done to address that? I think that I addressed that point because I saw that in evidence. Clearly, there have been decisions taken particularly around the BBC to develop Salford and that is a deliberate move from them. They have also looked to commission more widely. We had called for again with cross-party support from this Parliament for greater production from the BBC, so that has increased substantially from where it was. At that time, STV was producing long-term dramas like Taggart. Broadcasters themselves are not without their own responsibilities when it comes to sustainability in the film and screen sector. One of the first things that I did when I took on the role of cultural responsibility was to bring together the independent producers together with the broadcasters because at that point the relationship was not maybe as happy as it might have been, but also to hear the concerns about the growth of the sector. Very much relies also on the commissioning that comes from broadcasting. STV, for example, in the past had produced some very strong dramas. I am not going to talk about the merits of the content, but what I can say is that long-term sustainable drama is what helps the industry to develop, not just in terms of obviously the most obviously acting, but also technicians and all the different disciplines that are used. Part of the progress of where I want to go next in working with the area is to work with the BBC and also STV to encourage more sustainability. They cannot just take the best of the cream of the crop of the talent that is out there for their own purposes. They have to invest back in. My first discussion with Tony Hall, for example, is one of the areas that we have had a good dialogue on about how they can help in skills, training and apprenticeships. I gave an example of channel 4 working with Creative Skills Set. I was funding from public sector to help in their area, but I think that same ask can be made of both BBC and STV. Do I want to see expansion? Do I think that there is an opportunity? Yes. I think that one of the key roles is commissioning, because some of the decisions around commissioning, a lot of programmes have been transferred in terms of production to Scotland, but do they reflect the Scottish character or Scottish films that could be made anywhere? Any business is welcome, but a lot of the content of that is shown UK-wide. It could be made anywhere, but we want to make sure that the commissioning decision-making is absolutely critical. I do not think that, in terms of where we are with either the BBC or STV, we have got to a maximum position. I do think that the investment and the areas that we have responsibility for, we can do more in that area. I am absolutely clear that the potential for film in Scotland is extensive, but do not underestimate where we are. We have just gone through a year where we have had the highest level of investment in terms of inward investment for film, the outland of production, for example. £40 million in one year is the highest level, and the year before that was £33 million. That is the highest level of inward investment and share that we have had for some time. The scope for more, absolutely, and we can build on the success of that. However, I think that the responsibility is not just for Government, but also for the industry. I would play that back also to STV and BBC in particular. I hear that point, but you do accept, nonetheless, that, as Government and as the responsible minister, as referred to as one, you have a role in engaging with these commissioners and securing that kind of work. I regularly meet with BBC and STV on those issues. We will need to move on, because I am conscious of the time. I think that we will only get on to the issue of the film studio, and I will bring in Joan McAlpine. On the film studio, I am aware that it is a long-running saga. I used to edit the culture section of the Sunday Times Scotland in the 1990s, and film journalists would regularly approach with stories about a new film studio, which they never materialised. Over the years, they began to realise that it probably was not going to be one. However, one of our witnesses even said that it was discussed back in the 1940s. Clearly, it is something that goes back a long way, and you have set up a delivery group. Do you think that you will be the Government who finally delivers on this long-running issue? I am determined that we will. On the delivery group itself, when we spoke to Scottish Enterprise and Creative Scotland last week, they said that it was a group of civil servants. The industry is asking for an industry input to drive that. Do you think that that would be possible? I think that it is important that we respond to the needs of industry. In particular, in relation to the process to date, we had the most comprehensive assessment of what was available, what we could do in terms of the film that was published in March 2014. We then had the tender process. It is difficult to engage with individuals who are involved in the tender process and who are then directly involved in shaping Government's view of civil servants on something that they themselves are tendering for. That is fairly straightforward. That tender process is now closed. There is now a new proposal that has been received by Scottish Enterprise. It does exceed the development brief that was initially set out last year. There are inactive discussions. As I set out in terms of whether that will provide good value to the public purse, it will reflect the industry needs. They have been quite clear that they want in terms of location or in terms of particularly height and, indeed, the facilities that would be available, what industry requires. That has been articulated. The delivery of the content and production of that would be best informed by industry itself. That is the whole point. It has got to be front facing. We have got to respect that we are dealing with the private sector here. We cannot dictate to private sector proposals what they will or will not provide. We can set out the development brief. The development brief was absolutely informed directly by industry requests. In particular, that was set out in the report that was produced in March 2014. That was informed by probably some of the numerous meetings that have been referred to earlier. That is exactly what that is. I am happy to come back to the committee or our rights committee when we have progress on that. However, a lot of that is in the hands of the private sector as well. We have to be as responsive as we can when we get a proposal that is suitable. Do you have any idea of the timescale? The new proposal that I have just talked about is in Scottish Enterprise and is currently in discussions with that proposition. I am not going to give you a timescale. I know that it is frustrating. I told you that I am determined to deliver, but the Government cannot deliver something that is reliant on private sector. Why do I say that? It is an important point. The European Commission is quite clear that a public sector investment would breach state-aid rules. I cannot say to you that if I could just go and build a public sector government studio, that would breach state-aid rules in relation to the European Commission. Indeed, just in July last year, they were quite clear in terms of issuing regulations of what could be done. It has been done in partnership with the sector. However, I am happy to write to the committee to make sure that you are informed as when progress is being made. On the state-aid rules, we have been given a very useful briefing on that by SPICE, which shows just how complex the whole issue is. If you have obtained detailed advice on how a studio for film in Scotland could be delivered within the constraints of state-aid rules? The introduction of the new general block exemption regulation effective from the first of July 2014 particularly informs the position article 53A for cultural and heritage conservation. Under the article, eligible costs, including construction costs, can be supported if at least 80 per cent of the time of space is for cultural purposes. That is not commercial, that is for indigenous cultural provision. The view is not formal view, but informal view is that it is not intended purpose of this article for construction. The issue of state-aid is particularly around construction. Article 54A's schemes for audiovisual works under this article I quote, aim for film studio infrastructures shall not be eligible and then obviously the case, the market economy investor principle, in July 2014 there was a case that was taken on the Valencia studio where quite clearly 100 per cent publicly funded and it was quite clear under the ruling from the commission in July 2014 that again they breached state-aid so it is quite, you know, it is really clear where we are at. That's not been in position in the past and the big difference was, I think people say, well what about Wales and what about Northern Ireland is they had state assets that could be converted and as part of the assessment, the comprehensive assessment informed by industries needs that took place and the report was published March 2014 as we were constantly looking for different facilities, but there aren't any state-aid assets that could be converted. Primarily there's a height issue, there's pillars, all the rest of it, that wasn't the case in Wales or indeed in Northern Ireland. One of the things that struck me reading the spice paper is that you talked about it has to have a cultural dimension but that would be judged in the terms of British culture. I know that the studio in Valencia failed because it was believed that there was enough provision already in Spain. Would we suffer because there was quite a lot of film production space elsewhere in the United Kingdom, for example, or could we argue, you know, our specific case as a nation within the United Kingdom or would the European Union not look at it in that context? Something that I would be happy if I don't really list correctly to correct this. My understanding is that if market failure was demonstrated in Scotland, there would be a provision that we could provide public sector funding. You will all be aware that we have studio facilities either in existence or being proposed and if there are other opportunities for private sector investment, you would be breaching state-aid rolls in relation to evidence market failure because clearly, there is a market there. It is another thing that the producers were very strong. They were very strong on obviously the studio but also on a dedicated screen agency. I know that it was the previous Labour administration that took the original decision to form Creative Scotland and get rid of Scottish screen ultimately but certainly the strong message from the industry is that they would like their own dedicated screen agency. I wondered how you would look at that. Would you look at that sympathetically? Quite clearly, in the establishment of Creative Scotland, they brought in creative industries that had not been there previously. It was a merger with Scottish Screen. I have already relayed that the spend on film by Creative Scotland is now almost or will be after yesterday's announcement three times more than it was under Scottish Screen. However, I think that the point is a point of focus and also being able to complete. I would say that I do not commit you to be under any view that somehow there is not good service being provided to the film industry from the dedicated people within Creative Scotland. I think that you have also had evidence that it has articulated the appreciation by the film industry of the work that is taking place within that. Janet Archer herself has talked about how she has reorganised within Creative Scotland to put more focus on the seance of whether it is culture or creative industries or film. I think that that will be helpful. As I said, there is an appointment of a director of film at the end of last year. I think that we work with what we have just now. I think that, in terms of what that soon agency can do, if they have more resources to invest, that will be helpful. Going from £8 million to £11 million is a significant increase for them. The element that we need to work on is on production, but that will not only involve a screen agency, but whether we had a separate screen agency or whether it is within Creative Scotland would still involve work with other agencies such as Scottish Enterprise. I think that we have attracted good film opportunities in terms of people using Scotland as a location. I want us to do more. We have £40 million of inward investment for Outlander. That is a very strong proposition. The problem is that everybody has seen Game of Thrones, but Outlander has not been filmed in Scotland yet. I think that people might have more appreciation of the scale and impact of that once that is seen on our screens. I am not of the view that we need a separate agency, but I think that we need to give every support to the film sector and the staff that are operating within Creative Scotland. I think that shining a spotlight on that issue will help that position. I know that some of the questioning might be critical and some of the evidence might be, but it is important that Scotland knows from its Parliament how important the sector is and the important role that those film professionals within Creative Scotland are providing. I have two members who want to come in in the film studio, first of all, John Lamont and then Patrick Harvie. I appreciate the fact that the two cabinet secretaries are here. One of the main messages that came out in our evidence is that it is both about creativity, but it is not just about how it matters to the economy, it is an industry. People can be creative but they still require business support. I referred before to the artist and the good society support that. Those are critical in terms of the economy. We also have to recognise that people are saying that they will be happy to go to 26 meetings, which is what we do for a living when we go to meetings, but people who are trying to run a business want those meetings to be as few as possible and as productive as possible. We have had some evidence that people have regarded that it is not worth the effort to get engaged with public agencies because of the amount of non-productive time that is used. For me, the film studio is almost practical but also a symbol of a broader feeling. I cannot overstate the frustration of evidence that the industry is in crisis. It regards the industry as being in crisis and that, while on the creative side you support this issue about business, you are losing out to other parts of the United Kingdom. The film studio is a symbol of our being unable to engage in that very increased competition, which is highly commercial. I want to ask the Deputy First Minister. I am advised that producers have received no development funding in the past five years. The business development side of the industries that are so important are not being supported. Is that why we are there for losing out in competition with other parts of the United Kingdom? As I explained in my other answer, Scottish Enterprise will make decisions about the degree of support that it gives to companies through their account management process. That determines exactly how the support is available to assist companies to develop and enhance their propositions. There is a range of companies that will be account managed within the whole creative industry sector. They will receive particular support depending on their circumstances and aspirations. That will be the normal course of judgments that will be made by Scottish Enterprise in this process. The reflection of the quality of the companies that no producer has received development funding in the past five years, despite the fact that he has said that there is flexibility, and he recognised that commercially we are losing out. This is not about how good the idea is. We are commercially losing out to other parts of the United Kingdom, but we are presuming that people are getting more support than they are getting in Scotland. The judgments arrived at by Scottish Enterprise about the companies that they are able to support and the business propositions that they are able to support. What we have tried to do in the response to the particular requests of the producers is to put forward a mechanism that would enable those producers to gain access to the type of loan financing that was announced yesterday, which has been the subject of discussion for some time, to give those producers the opportunity to access resources that enable them to grow and to strengthen the business propositions that they are involved in. That resource is available for companies to be able to take forward. Everybody has said that it is welcome. It does not reflect, I do not think, the evidence that demands people looking for direct support for what is a critical industry and that we are losing out commercially. I do not get a sense. I do not think that this is an issue that politicians are going to fight with each other in terms of the party position at all. I think that this is a challenge for government to get different bits to come together to an industry that does not fit. I understand the challenge. One of the things that was explained was highlighted to us is that the remits of Creative Scotland in terms of being able to give support and the remit of Scottish Enterprise are in contradiction to each other. Are you aware of that challenge and would you be at least willing to go and see if that can be sorted? The sense in which not only are they not complementing each other but that they are contradictory to each other are inhibiting people. I think that it was explained to me that you have to have a certain level of turnover in order to access Scottish Enterprise support. There has been no Scottish Enterprise support, so that would suggest that that is maybe the case. However, the level of funding that you can access from Creative Scotland—I think that one figure was quoted to me—was £10,000. I am certainly very happy to look at any areas where there may be a difficulty of the alignment of remits of organisations, because there should not be. If there was, I would address that. The Cabinet Secretary for Culture and I would address that immediately. I think that that is very useful, because I do think that part of this is creative and disturbing. Maybe I could be an answer. It would be quite helpful. The culture section that I have met with independent producers on a number of occasions and I have not heard this argument about there being some problem with remit. If there is, then I will happily look at that and try to address that. I have certainly heard the issue about alignment. John Lamont for herself has said that it is a challenge to get organisations in alignment working in a cohesive fashion. That is what we have been working to do. However, on the basis of the model, Creative Scotland is in the leader on Creative in the creative sector. It has a call on other organisations to support and reinforce their activities. I am not aware of any contradictions in remit, but if there are, we will certainly address them. I recommend that you have a look at the evidence, but it is very explicit in the evidence that is given to us. I also go back to the issue that, although Creative Scotland is about the cultural heart of Scotland and all the rest of it, we have to have a fundamental business model that allows us to compete in the commercial world against other parts of the United Kingdom where we are losing out. I think that that is the challenge in that regard. I am finally on the question of film studio. I have no doubt that Fiona Hyslop is entirely sincere in her determination to make this happen, but could you give us at least an indication of what will happen before 2016? Can I just say that it will happen when that agreement is made with the Prime Minister? I cannot speak on behalf of a private sector company. No, but you are a critical player in encouraging the private sector. This is not something separate from me. This is something that the industry wants in order that economically Scotland benefits. Can we say that it would be reasonable to suggest that, by the time this Parliament rises, in May 2016, there will at least be a clear plan and a timescale for the development of the industry? That is a perfectly reasonable request to make. That is my response to your second point. Your first point about the industry. One of the things that you have had evidence of that we are very conscious of is the need for film to scale up very quickly. It is the issue of scale and the speed by which projects come to fruition, both for gaming and for film. You referred to amounts that were invested. Creative Scotland has recently increased its availability of production funding for any one film from £300,000 to £500,000. People might say that an offer should be able to have a greater call if it is a big blockbuster investment. That would then look at wider agency support, but within Creative Scotland, £0.5 million for one project and one film is what they have available. Some of the films that have been funded with that £500,000 for any one project have been significant. Previously, they would have been on the £300,000 threshold, so just to correct the point about £10,000 for development in terms of production funding, that is the scale of what Creative Scotland can provide. Anything larger than that would obviously need to require a different type of funding, but by that time you are almost looking at a scale of a big major inward investment proposition, which probably puts it in a similar territory as you might get for whether it is on life sciences or other areas. However, in terms of the ambition for yes, I think that you appreciate my sincerity and my determination for a film studio, but not all the cards are in my hand. I am absolutely clear that, in terms of what is reasonable, in terms of people's expectations, what you have set out is perfectly reasonable. I am willing to bring in Patrick Harvie on film studios. Before I do that, I want to comment that we are more than two thirds of the way through our time and quite a number of members still to come in on issues to pursue, so we can tighten up a little bit on questions and answers. That would be helpful. Just briefly, convener, on this question, and it leads off, it was going to be in the area of Jan Lamont's final question there. We appreciate not all of the cards that are in your hands, Cabinet Secretary, but in answering Joan McAlpine's question, will this Government be the Government that delivers on that long-standing ambition? You gave a very unequivocal yes. How can you give that unequivocal yes, and then two minutes later say you can't put a timescale on it, and then 10 minutes later say that within the term of this Government, is a reasonable thing to ask for? Well, in terms of are we the Government... What did that unequivocal yes mean? Yes. And where did it go? It went and it would deliver on this. I think the answer is yes, we will. In terms of Joan Lamont's comments about what is a reasonable plan, can we have a plan in place in order to deliver on... They are not mutually exclusive questions. You will appreciate the difficulty of giving an unequivocal answer, yes. I know that ministers sometimes think that their Government will last forever, but none of them do. Yeah, exactly. A lot of what I have related to you today is commercial and confidential, so I am not going to be able to relate, and I cannot be in a position that I can announce to you or indeed go further than I can in relation to that discussion. So I have got confidence, right, but it's not been realised as yet, but I am hopeful that it can be done and I'm fairly confident in my response to Joan that it will be, but I can't give you the information in terms of timescales of exactly what will be delivered and when it will be delivered. Okay, so it's an optimistic yes? Yes. Another yes. Okay, briefly, Chick Brody's got something to do with it. Just following on, Cabinet Secretary. Skip was established in 2009. We're now six years down the road and to talk about the dilemma of who owns what. I asked the question last week where does the buck stop, and eventually, after some confusion, we were told that it stops with Creative Scotland. But Creative Scotland just produced its own marketing strategy. Scottish Enterprise is producing a strategy on the sector as one of the three emerging sectors, and Creative Industries is producing an overall strategy within Skip in, hopefully, this month. There is a dilemma. Who do we look to to say, right, that buck stops with you? Creative Scotland believes in them, but we also have a commercial component that has to be addressed as well. I come back to the question that I asked earlier. It's fine having progress in the cultural side, but who's driving the commercial side? I think what this question takes us back into is some of the debates that we had in Parliament about whether or not Creative Scotland should have a business development remit. That is what this issue is about, and let me address it. Because Parliament determined on this when it legislated for Creative Scotland and it legislated that the business development remit should sit, as it does in every other sector with Scottish Enterprise. The view that the Government took at the time in legislative for Creative Scotland was that it was appropriate for the sake of the clarity that Mr Brody seeks, that it was crystal clear for development of the creative sector, leadership and responsibility rested with Creative Scotland, but it had the ability, for example, to visit Scotland, which is the undeniably leading lead player for the development of tourism in the Scottish economy. It has a call on Scottish Enterprise for Business Development Support. Visit Scotland does not carry a business development role for the tourism sector within Scotland. It has leadership of the development of our interests on tourism. That is the policy judgment that the Government made. What it follows from that is the requirement that I have talked about in response to questions, that Creative Scotland must feel that it is part of a partnership with other public bodies who work together and collaborate with it and, in a cohesive way, deliver for that business sector of the economy. That is the thinking behind it. To go back to some of the answers that I have already given, it is crystal clear that Creative Scotland is in the lead, but they are entitled to have the business development support of Scottish Enterprise. I accept that, cabinet secretary, very briefly. That may be clear to us, and certainly you have clarified it. That was certainly my understanding of the role of the Scottish Enterprise. In the last two witness sessions, that perhaps is not clear to Creative Scotland. Ultimately, they accepted their responsibility, so it may well be that that needs to be clarified in terms of exactly what outcomes we expect from Creative Scotland. We will look at what the committee says in its inquiry and its conclusion, but I do not think that there could be any dubiety or any uncertainty on anybody's part within Creative Scotland or Scottish Enterprise about where respective responsibilities lie, because it has been spelled out very clearly by ministers, but, if it needs to be spelled out very clearly again, it will be spelled out very clearly again. Good morning. The question to the culture secretary is quite clearly outlined this morning the opportunities and difficulties facing the independent television production sector in Scotland. Given that the BBC is reviewing its lift-and-shift policy and channel 4 of announced new targets for increasing production from the nations, Mr Swinney, you have just said that it is crystal clear that Creative Scotland is in the lead in this matter. The difficulty facing the independent production sector is, from the evidence that we heard last week, that Creative Scotland has stated that virtually all its focus is on film and not the independent production sector or television sector. What support is available to independent television producers in order to access the increased commission that is going to be coming to Scotland? The different areas of that are not least, as I go back to my point, about the broadcasts themselves as commissioners and the increasingly commissioning from independence. That has to be a positive relationship. My concern, particularly with the BBC, is that their budget is likely to reduce substantially to 2017. I think that it is likely to go down to about £86 million from a figure that was way over 100 million. That obviously limits the pool. We have concerns, and I know not this committee, but your colleagues on the Education and Culture Committee have spoken to the BBC frequently about that. Channel 4's commitment is welcomed. STV, as I said, used to have more substantial long-term running dramas that could help the industry. There is an ask on them. The committee can provide the information about Creative Scotland's work with STV, particularly in different filming. If you take MG Alba, for example, and support for Bannon, the new Gaelic drama, you talk about studio space. It is being filmed, as I said, in Stornoway, but I think that it is also using the Samarostic studio there, so the small-scale studios. The idea of trying to get sustainability for content writers is hugely important to the success of productions. In relation to the issue, there has been a tension. One of the first things that I did was to bring together the broadcasters and the independence cells. The independence benefit from investments from the broadcasters, as long as the commissioning of that allows the independence to compete. One of the continuing criticisms, particularly of BBC, is the idea that people may come and do productions that shift and lift, but it is not necessarily the Scottish talent that is being used, whether it is technical or professional acting, etc. I think that that is a genuine criticism. Although the figures look good in terms of the increase of the amount of commissioning that we are going up to the levels that it is just now, what was set out as an ambition has been realised. The issue is that is that reaching the independence in Scotland to the extent that it should do? I think that that is still an issue of concern. When I said that we are looking at those areas, it is as much about our relationship with the commissioners. If you look at MG Alba, for example, and if you think about the size and the reach of that, they are commissioning 20 per cent of work from the independent producers for the whole of the broadcasting sector, and 78 per cent of their production is via the independence. That shows what you can do with a successful independent broadcasting station. It is why this Parliament agreed that a digital channel would be good for the industry in terms of the impact that it would have in terms of Scottish production, and that is still a live discussion. What I would say is that in following through our involvement and again its partner Smith's commission in terms of the proposition of the consultation that should take place on the charter renew will be moving very quickly after the Westminster election. I suspect in terms of activity on the BBC charter renew, and I think that it would be helpful for me in my case where the committee to consider what the implications might be, because some kind of push and requirement as part of the charter renewal to support the industry in Scotland, particularly independent production, would be a very helpful, constructive proposition if we could get cross-party support on that. I was actually going to ask you about this Smith commission, but you have covered that point. My final point would therefore be that, given the difficulty that Scottish independent producers have had in gaining work from commissioners that are based south of the border, many of them are targeting export markets. I know that the committee is going to be looking at Scottish exports in the next couple of months, which of the two agencies would be there to support independent television production companies to access these export markets. Given that Scottish Enterprise does not fund production and Creative Scotland only funds Scottish content, who is going to assist these companies to access this export market in a potentially growth area? I think that it would be helpful if Creator Scotland could respond to you and some of the former questions. I am not sure how accurate some of that might be, but there is also Scottish Development International to have a play in terms of our international reach. One of the areas that I think is looking for funding that I am very keen that we work on will be Creator Scotland that would take the lead on this as well, but it would work with other agencies. If you look at European funding, one of the few budgets that has increased is the Creative Europe funding. The requirement for that is to have cross co-production. However, if you have a look at most—not most, but a significant amount of the production that you will see on television at the end—you will see co-production with different countries. That, again, is the way—it is either with different companies in terms of the international reach, whether it is co-production with American companies, but the opportunity for Europe, in particular, whether it is working with the Scandinavian countries or indeed with other countries, is very important. It is why, in my discussions with the French, I have a cultural agreement with the French also in relation to Ireland, and I think that that would be an ideal co-producer in terms of access for funding in different areas. I am very active and I have asked officials to look very closely at what might be possible in relation to using the new 14 to 20 Creative Europe funding on digital, media and film in particular. I think that there are opportunities that we can pursue in that regard. Also, my discussion with the Polish culture minister when I was in Poland last year, again, the areas of collaboration and co-operation. The content has to come from the producers and the writers, and we cannot dictate that, but in terms of funding and co-production, that is the way that things are going in the future anyway. I just want us to maximise that. Since yesterday's announcement on the extra funding, it has generated some interest. I have had a number of emails and also talked to people on social media who are responding to it. It is not that people do not welcome the fact that there will be some extra money available, but they are concerned that it may not actually benefit the parts of the industry that need to, the independent level at the grassroots level where talent is found and developed. One correspondent in particular cites a number of organisations who have all been unsuccessful very recently in their applications for regular funding from Creative Scotland, not on the basis of the strength of their applications or the quality of their work. The decision not to fund was significantly informed by the fact that Creative Scotland was still to map our sector, despite a comprehensive mapping exercise of the sector being undertaken as part of the new film strategy for Scotland, published in October last year. They want me to ask you what arrangements are going to be in place to ensure that the additional funding goes where it is needed at the grassroots level where, as I say, new talent can be identified and nurtured? The one-way-a-pound development funding is absolutely about nurturing and developing the sector and the areas that you are talking about in terms of the emerging talent. That funding that has been announced yesterday is specifically for development of the industry, which means the area that you have just been talking about. On the £2 million loan transaction, that is obviously affected by the rules and tax credit and there are different rates for over-productions that are over £20 million, which is a large production and different rates for less than £20 million. In terms of regular funding, you will know that the requests and asks of Creative Scotland far exceeded the funding that they had available. They increased their pot of funding over the period from £90 million up to £100 million. Those that did not get regular funding can apply for project funding. The range of the amount of that can go from £50,000 to £150,000. Larger amounts of money can be provided by project funding. You respond to the explanation that they have heard. It is about Creative Scotland having still to map their sector. I do not know what that makes sense. I have not seen anything that reflects that comment. You would have to speak to Creative Scotland about that. You would be worried if that was the... I do not recognise that as an explanation. The fact that it was far bigger asks than the funding that it had provided is the same explanation that is given to all the different sectors. In terms of regular funding, there are organisations and I am quite happy that Creative Scotland could supply you with those. The film was one of the areas, as far as I recall, that had an increase in the profile of the regular funding announcement that Creative Scotland gave at the end of last year. Rather than saying that the film was not getting funding, my understanding is that the film got more funding from the regular funding announcements that Creative Scotland made last year than had been done previously, but I am happy to arrange for them to supply that to the committee. I will perhaps pursue that in course, but I just thank you enough. Richard Lyons will be very patient. I will bring Richard in next. I think that we have time. There are a couple more members who want to get in. I will ensure, convener, that you have time. I will do two quick questions and I am sure that I will get two excellent answers. From Mr Swinney, has the Scottish Government had any discussion with the UK Government about possible changes to criteria for tax incentives for creative industries? For example, introducing a requirement to employ local Scotland-based technical talent in order to qualify. We have not had a specific discussion on that point, but we have certainly been in dialogue with the United Kingdom Government about the use of the tax system to incentivise the development of particular parts of the computer game sector, which has been a major part of correspondence that has been pursued by the United Kingdom Government to put in place the mechanisms that we think would enable the computer games industry to thrive to a much greater extent within Scotland. Therefore, yes, there have been exchanges with the UK Government on that issue in general, but not as specific a point that Mr Lyle raised with me. On to the cabinet secretary's view on his look. Like Patrick Harvie and others, we have had many emails from constituents in regard to what they say, and with the greatest respect that I said to the creative Scotland last week, the shambles that they feel that creative Scotland is in. Now that you have heard what you have heard and the commitments that you have given today and what you have listened to the members of the committee, do you intend to sit down with creative Scotland as soon as possible in order to address the concerns that people say that the problem they have with creative Scotland? I would also refer to the meetings that John Swinney and I attended with the independent producers of Scotland that were attended by creative Scotland colleagues as well, so they have heard directly about what the concerns are. I would not describe it in the way that you have, but I do think that we could improve things. However, creative Scotland has to say no to more people than to say yes in relation to funding. That is uncomfortable and difficult. It is not necessarily, as Patrick Harvie said, because of the talent and capability and the really good applications that go to creative Scotland. However, if you have far more good applications coming forward than you have resources, you are going to disappoint people. That disappointment can be expressed in different ways. However, as far as the relationship—I think that your core of your question is the importance of the relationship between the organisations—is that important? Yes, absolutely. Do they know that it is important? Yes, they do. However, I think that part of this is borne out of frustration because people know that the opportunities that we have are really, really strong. We have great, talented skilled people in the film sector and we want to support them. It is a frustration, but it is not because the market is not there that we are capable of delivering what we are, and we just need to scale up more of what we are doing. We are perfectly conscious that that is the requirement and that is what they ask us. Just to correct you, I am not saying that it is a shamble. One of my constituents who wants an industry is saying that it is a shamble. I take it from a simple yes or no, so do you intend to sit down with Creative Scotland and all other parties to try and sort that supposed shamble? I do not describe it in the terms that you have, and I do not recognise those terms. What I do recognise is that there is a need to make sure that we continually improve relations not just with the agencies themselves but also the sector. I will be making sure that the report from the committee is something that is discussed by all the agencies. As I said right at the start, I really welcome the committee's shining a spotlight on the sector because it is one that Scotland, by and large at a political level, has not had the attention that I perhaps would have wanted it to see from the Parliament as a whole, so I welcome your report. To what the cabinet secretary has said, I have taken part in a number of these meetings and I have not been involved in conversations that I could, in any way, describe in the fashion that Mr Lyle's constituent has suggested. What I unreservedly accept is that agencies must work effectively together. I am very happy to confirm that that is the approach that the Government takes to encourage that to be the case. Obviously, we will look carefully at what the committee concludes on the matter to make sure that we are able to fulfil that commitment to the Parliament. Patrick Harvie, are you going to ask about the game sector? I think that the issues that I had been meaning to ask about the game sector had come up earlier. Okay. In that case, Dennis Robertson. Thank you. I will stick to the computer and gaming. Brian Baglow, in his evidence to the committee, was suggesting that the industry itself has a distinct lack of knowledge in terms of marketing and accounting, although it has the ideas of the computer games and the concepts and all that sort of thing. How can we assist the gaming industry to give them the information, the need to be successful entrepreneurs? Obviously, because we are developing our epionomic growth, we are looking at the wider aspects of trying to retain our talent here, rather than seeing a drain of our talent going abroad. How do we get them to step up and be that creative business? They have the idea, but they do not have the business knowledge. I do not think that this is a particularly unique issue for the computer game sector. We have universities that are crammed full of absolutely fantastic researchers and innovators, but I would not ask them to run a business because it requires a different skill. They are absolutely fantastic at creating new concepts and products, but running a business is a completely different proposition. The key thing is that we ensure that the correct and appropriate advice is available to individuals to support them in that journey and to make sure that the correct collaborations are put together. The way through that may be collaborations between people who are adept at running businesses and people who are adept at developing computer games, and they may be two very different types of individuals. I do not think that we should let the question obscure the fact that we have a number of absolutely fantastic computer games companies that have demonstrated not only good concepts and good ideas, but phenomenally successful commercial products of which we should be enormously proud. I have two more members who want to come in. If they are brief, we get brief responses. When we talk about the opportunities, we agree that certainly in the gaming industry there are huge opportunities, but they require investment. The opportunities that can be capitalised on investment are clearly worldwide. What do you think Creative Scotland should be doing to promote creative industries abroad? When we were talking about crafts, for example, we heard about people going to exhibitions in New York carrying their products in their baggage, which does not seem to me to be the professional image or brand that we want to give Scotland. How do you think that Creative Scotland should be promoting our creative industries abroad? Working again with SDI and appropriate agencies there, in terms of the reach again, part of that is also looking at the network. I reflected in your comment when I was in San Francisco meeting with a number of the gaming companies there. Some of them are run by very successful Scots, very keen to help mentor and support or to introduce those from elsewhere. Some of that technology, in terms of the switch over from film and digital, picks are, for example. We have the director from there working with Glasgow School of Art directly. Obviously, you are getting new emerging businesses as they develop in terms of that exposure. We are recognised internationally as a centre for creative industries. I spoke at a European council meeting and informal council in Barcelona when explaining again what Rockstar, Grand Theft Auto and the take that they had, the fastest-selling entertainment product of all time, comes from Scotland. That recognition is there and that reach. If you look at Minecraft to any of you—I think that the convener has children of similar ages mine—a fantastic development that has been produced and, again, the educational opportunities. I think that we are in a very strong place. I think that the international marketing is fine. It is obviously about the industry itself, but obviously there is a calling card of that recognition that is important. However, it is an international promotion, as it would have in any other industry. That is what would happen. It is not just about working with the Skills Development Scotland funding council, the Highlands Islands Enterprise, the Scottish Enterprise and also the SDI in this area. Briefly, to come back to where we started with the tax credit loan fund and the question of accessing tax credits early in a cash flow proposition, as Mr Swinney said, clearly welcome in itself, one of the points that I have gathered this morning is that already producers are able to access loans against their impending tax credits elsewhere on the market. So will this loan facility be at more favourable terms or how will it actually add to the options available to producers who currently can borrow against impending tax credits elsewhere? We are back in session. Mr Swinney, if you can remember where you were, you could pick up from mid-sentence. The proposition that was put to us by the independent producers was that it was about accessing sums of money that gave them sufficient scale to increase the size of the projects that they were able to take on. In a sense, how it would characterise it is that the current availability of resources and the investment sums that they could access essentially kept them in a rut. They could not get up to a different level. They were stuck in a particular size of film proposition. However, the financial transactions that we have made available will hopefully enable companies to increase the size and scope of projects, which, if the theory works correctly, will increase the returns that they receive, which will enable them to essentially feed the growth in which they are involved. I am not sure that Mr McDonald's question to me started on the premise that those types of funds were available already. I would contest that that is certainly not the evidence that was put to me by independent producers, which is why we have taken the action that we have taken to put in place the financial transactions that are designed to support companies on that journey to undertake larger projects. We are now out of time. I thank you all. I apologise for the interruption. Thank you both for coming along. It has been a very interesting session. I am grateful to you for helping the committee with our deliberations. We will now have a short suspension. If we can reconvene, we are now at item 2 on the agenda, and the committee is taking evidence on legislative consent to motion LCM bracket S4 close bracket 31.2 on the small business enterprise and employment bill UK Parliament legislation. I welcome Fergus Ewing, minister for business, energy and tourism, and Vicky Verrill, who is head of structure and capacity of government. The Scottish Government welcomes to you both. Minister, would you like to introduce this LCM, please? Yes, thank you, convener. I am grateful for the chance to address the committee on the supplementary memorandum lodged by the Deputy First Minister on 13 January. The committee considered the wider devolved aspects of the UK Government's small business enterprise and employment bill at its meeting on 8 October last year, and noted that a supplementary LCM on the provisions on public sector exit payments might be brought forward, subject to the Scottish and UK Government's reaching agreement on the policy. Following the committee's earlier consideration, the two governments reached agreement that, in the interests of securing value for taxpayers' money and of public sector labour market mobility, the exit payment provisions should apply to senior staff movements within similar parts of the public sector across the UK. The Deputy First Minister agreed with the chief secretary to the Treasury to progress a supplementary LCM on the understanding that the provisions as originally in the bill would be amended to confer powers on Scottish ministers in relation to relevant devolved bodies. The chief secretary agreed to that on 5 November. Appropriate amendments to the bill were tabled on 7 January for consideration in Lord's committee. Those amendments were agreed on 26 January. The bill is amended and is expected to go to Lord's report in March. The supplementary memorandum outlined the relevant amendments to the bill, which cover four related substantive measures and one minor consequential change. In essence, the bill is amended and provides for Scottish ministers, rather than the Treasury, to make regulations on qualifying exit payments made by devolved public bodies with devolved workforces. Those regulations will be able to include certain provisions, for example, on exemptions from a repayment and on duties to ensure that repayments are made. The bill also provides for Scottish ministers not the Treasury to waive or give consent to waive repayments of exit payments made by devolved bodies. It provides for regulations for the made by the Treasury or Scottish ministers to be made by negative procedure. That is on the grounds that the regulations themselves are likely to need frequent updating and because they will not be used to amend primary legislation or to create offences. While the memorandum covered the amendments as tabled and subsequently passed in the Lords, the committee will wish to know that the Treasury has just notified us that they expect to bring forward further clarifying amendments at report stage. Those will make explicit that the purpose of the provisions is to recover qualifying exit payments from individuals who return to work within a year of leaving. That reflects the underlying policy position and therefore has the Scottish Government's support. The amendments to the bill and the further clarifications that are proposed will give effect to the agreement reached between Scottish and UK ministers in a way that allows the Scottish Government and Parliament to determine the detail of future Scottish regulations, including which devolved bodies to include within scope. The Scottish Government is rigorous in its pursuit of value for money across the public sector. Audit Scotland and the Accounts Commission produced a report in 2013 into early departures from the public sector, including local government, recommending controls over the re-employment within the same body of individuals who receive early departure deals. That approach was supported by the Public Audit Committee. The measures provided for in the bill more than respond to that recommendation extending, as they do, to re-employment within a similar part of the public sector. Convener, I therefore ask the committee to support the draft legislative consent motion. Thank you minister. I know members at one or two points. I could start off by asking a general point around the policy here. We have all been familiar with situations where highly paid people not only apply to people earning more than £100,000 a year. In the public sector they have left, but they have found themselves re-engaged not as employees but on a contract basis where they become consultants and earn large sums of public money on a contract basis. Those measures only apply to those directly employed or will they impact on those who are contractors? Generally, those individuals who receive exit payments from the public sector and then return off payroll to the same or similar role, for example, as a contractor, are included within the scope of the proposals. However, in some instances, individuals that leave may continue to have a limited form of engagement with the public sector. For example, where an individual is employed by a large consultancy firm, in those instances it would be an unfair restriction of trade and probably impose a disproportionate level of complexity and cost to recover exit payments. The regulations under the relevant provisions of the bill would therefore seek to differentiate between those two groups, and there would be further consultation on a proposed definition as part of the regulations. In the meantime, the relevant clauses of the bill make a general provision that the future regulations may provide for exit payment to be repaid within a prescribed period where an individual in receipt of such a payment becomes an employee or a contractor of a prescribed public sector authority or a holder of a prescribed public sector office. Thank you for clarifying that. In looking at this one question, it is why people would make decisions knowing that they might have to employ somebody and bring them back, make the decision in the first place in terms of allowing them to go or releasing them, but of course there are different conditions. I wonder if I might refer to clauses 8 and 9 in terms of the salary limitation. We know that there are certain conditions in terms of jobs here where they are attached to, as has indicated, the Treasury in London, but surely because there are salary differentials and the general gradation of salaries is different between London and here, is not it a case for creating a separate Scottish level to ensure that we capture as many of those people who are allowed to leave, do leave, etc? Do you not think that the £100,000 limit should be reduced? I think that we wanted to ensure a consistency of approach and fair treatment of relevant individuals in the public sector in Scotland, but also across the border as well. £100,000 is a fairly handsome salary wherever one is based, and no doubt there are different standards and costs of living in different parts of the country, although in London the difference is perhaps most marked. I think that we did not want to make this too complicated. We thought that the principle of having a regulation over exit payments was correct, Audit Scotland, the Audit Commission and indeed the Audit Committee of this Parliament all recommended that regulations were necessary, particularly in the light of some well-publicised individual cases, which I do not propose to rehash here. Broadly speaking, we thought that the policy approach that one retires and does not immediately come back the next day and carry on as is having received a large exit payment, that regulation is necessary to deal with that. No doubt that no policies, no legal approach is perfect in this regard, convener, but we felt that a consistency of approach of treatment was, broadly speaking, the correct approach to take. Obviously, there are some salary differentials for commensurate senior public sector jobs north and south of the border. There are a number of individual posts in Scotland attracting salaries above the proposed 100,000 threshold for your interests. For example, over 60 directors, chief executive posts in NHS Scotland, five chief executives of devolved Scottish public corporations, 14 chief executives of devolved Scottish executive NDPBs and over 100 senior level posts across Scottish local authorities. Therefore, there are a great many people in leadership roles in the public sector in Scotland who are earning more than £100,000, which is a pretty handsome salary by anyone's reckoning. I do not claim to have a great deal of sympathy for those who might lose out as a result of this kind of mechanism. I think that very few people would, but the purpose of this, the policy objective of it, which you say the Scottish Government agrees, is clearly not to tackle unequal pay and the problem of high pay in our society. If it was, I would say that it was long overdue, but that is clearly not the objective here. Is there a reason in principle why the arrangements for compensating for people for loss of employment should be different in the public than the private sector? Well, I think that the policy intention behind the regulation of exit payments is quite narrowly defined. As Mr Harvey rightly says, convener, that is not really a matter of addressing equality. It is addressing particular cases where the public are concerned that those who are in leadership roles retire and then the next day carry on as is in a different arrangement having received a very large pay-out. That is the issue of public concern. I think that the approach has been on both sides of the border in principled fashion, but also in a proportionate fashion. The question that Mr Harvey raises is really a somewhat different matter of policy, which is should public and private sector compensation payments be treated differently. I think that public sector and private sector are in essence somewhat different for a large number of reasons. Therefore, it would be difficult to equiparate the treatment of compensation payments on a public and private sector basis. For example, conditions in relation to security of tenure in the public sector are different from those in the private sector. The public sector also has, I think, in general terms, convener, although we are straying perhaps off-piste in relation to this. The public sector does have defined pension, salary arrangements and, increasingly, that in the private sector is a rara avis. It is impossible, I think, to equiparate the public and private sector. Therefore, it is interesting, although Mr Harvey's question is perhaps that it would be one for perfectly legitimate consideration on another day. I enjoyed the term there. The point is that this mechanism is intended to deal with one particular specific kind of abuse. We know that the same kind of abuse happens in the private sector in many cases in terms of much greater sums of money. Why is that not a problem? In law, we tend to deal with specific situations and principles and then turn to other matters if they require legislation at a later date. If there is any consolation to Mr Harvey, I share concerns about the sizes of bonus payments, for example, that some bankers have received. I have said so in the chamber and on many other occasions. I think that that is something that the public quite widely perceive as a difficulty. The power of relation to those particular matters rest, of course, with the UK Government. It is the UK Government that has declined perhaps for reasons that it can perhaps explain to deal with that particular matter. This is beyond scope. We are a way-off piece. Perhaps the best thing to do when one is a way-off piece is to return to base. I am happy to leave it at a wee criticism of the UK Government convener. I am sure that we can all agree on that. I am sure that it is heart of heart. Even the minister does not share that view. I will bring in Johann Lamont. I think that it is an interesting debate to be had about the level of pay that you are actually finding in the public sector as you read out there. I think that some people might be quite surprised at the extent of the number of people who are paid over that amount. There is a general concern why our public bodies get rid of some days, take them off the payroll and then bring them back. It must be because, in terms of the pressures and funding, they find a way that still makes sense to them. I think that graver concern to us would be the number of people who are low-paid in the public sector who find themselves externalised and even then do not get, for example, the living wage. Even though we have a contract that is funded by the Government and the public sector, that is also for another day, I expect. What I wanted specifically to ask you about is that you defined and said that you will look at this further following the convener's question. An individual person coming back as a consultant would be penalised. However, if they were part of a consultancy firm, they would not be. We would create an centre for all those people just to get themselves together in one big group, define themselves as a company with equal shares, presumably, and none of them would have to pay their money back. They could even lob in a wee bit of the money that they have not had to pay back into supporting the creation of this company. Have you got firm proposals on how you would deal with that? If the messages to people and to public bodies stop playing about with public funding, because people are offended by it, how are you going to address that possibility? As I understand, Johann Lamont's question asks how we are going to set out in the regulations provisions that would prevent avoidance efforts, mechanisms that are set up in order to avoid triggering repayment of the exit payment by the use of consultancy firms. I think that is a perfectly fair and reasonable point to make. It is one that I shall reflect upon when we come to the stage of making the regulations. Plainly, the regulations are intended to deal with a particular mischief as legislation often has as its purpose, and therefore it is incumbent on us to think of what steps may be taken by clever individuals with smart advisers to circumvent these regulations. It is a perfectly fair point and it is one that I undertake that consideration will be given to in the course of drafting the regulations, convener. It is protected since both yourself and a member of your committee have made the same or similar points. Thank you. What one would hope anybody earning more than £100,000 a year in the public sector would be clever? Well, they could afford clever advisers, lawyers. I hope that the two are not mutually exclusive. Richard Lyle and then Chick Brunney. Just a quick question. You have detailed that there are over 100 people in Scottish local authorities. I think that you will find that, where she does not have an exact figure, I would say that it might be approaching 150 to 200. Just to remind me, and maybe I missed it, will the powers be conferred in Scottish ministers apply to the SPCB and the office holders, Audit General, Audit Scotland, etc.? Yes. The provisions will apply to the SPCB and its office holders. We are in discussion with the Treasury and Bids about possible further amendments to the bill, if necessary, to make that absolutely clear. The Deputy First Minister wrote to the Presiding Officer on the inclusion of the SPCB in the bill's provisions on 18 December. The Presiding Officer replied on 22 December, raising no objection to that. That will therefore be applied to the SPCB as well. Can I just ask one technical question then, if nobody else has any other points to make? The Delegated Powers and Law Reform Committee in their report to this committee were unclear why the powers conferred in the Scottish ministers should be subject to negative procedure rather than affirmative. I wonder if the minister has explained why the Scottish Government took the view that it should be a negative procedure. We gave a lot of thought to this, and we noted the views of some members, including John Mason, that this merited the affirmative procedure. On the other hand, other members such as Stuart Stevenson expressed the view that, since the regulations would not involve amendments to or principles of primary legislation or creation of offences, negative procedure would be appropriate. In addition to that, it is likely, convener, that there will be several regulations. There will be a deal of regulations, many of them dealing with specific public bodies, and we will largely suspect and anticipate that it will be of a largely technical nature. It would be unduly cumbersome and inappropriate, we believe, to use affirmative procedure in those circumstances. Therefore, after having given it careful thought, including consideration by myself, it was decided that negative procedure would be appropriate in those circumstances. If no one else has any other questions to put to the minister, in that case, I would ask the committee whether we are content to recommend to Parliament that it gives consent to the relevant provisions of the Small Business, Enterprise and Employment Bill as set out in the supplementary LCM. Is that the view of the committee? It is, thank you. Can I ask if the committee is content to delegate to the convener and Clark the production of a short, factual report detailing the committee's considerations and arranging for its publication? Very good. That is agreed. We now have a very short suspension to allow a change over of your officials. I mean that we are now on item 3, and the committee is taking evidence on the Scottish regulator's strategic code of practice. I would like to welcome back the minister. He is joined on this occasion by Sandra Reid, who is a better regulation policy manager, and Marian McCormack, who is the head of enterprise sponsorship and better regulation from the Scottish Government. Minister, do you want to introduce that item? Thank you, convener. I am pleased to return to discuss the Scottish regulator's strategic code of practice. When I appeared in front of you to speak about the code in December, I gave a commitment to revisit the code in the light of concerns that have been raised by the DPLR committee, particularly comments regarding a potential inconsistency between the Parliament's intentions for the code and the wording in the code itself. It is critical that the code accurately reflects the intentions of the act and Parliament's expectations, and that is why I withdrew the original code. Careful consideration has been given to the comments raised and the wording reviewed and revised accordingly. During this process, we also took the opportunity to consider concerns SCDI raised in their letter submitted to the committee in November and have made a further reference to innovation within the code. We consulted on the proposed changes with the members of the short-term working group that developed the code, and they are broadly content. As a result of that, I now consider the code before you more accurately reflect the true intentions of the Regulatory Reform Act. As I explained in December, the Scottish regulator's strategic code of practice sets out to encourage and support regulators in applying regulatory principles and building good practice in order to contribute to achieving sustainable economic growth, while concurrently delivering other core functions. Many regulators already contribute to sustainable economic growth in their day-to-day activities and continue to make progress on that, moving towards an enabling outcomes-based approach to drive further performance improvements and carrying out regulatory activities in a way that helps business. The code builds on the existing good practice, providing greater transparency and clarifying for regulators what is expected of them and, for business, what they can expect from regulators. The code enhances and strengthens our existing better regulation toolkit to deliver better and effective regulation. It provides a clear framework for regulators to ensure that their regulatory functions are transparent, proportionate, accountable, consistent and targeted. Alongside the duty to contribute to achieving sustainable economic growth, it will also play an important role in making Scotland a more successful country, with an attractive business environment providing opportunities for all. Before I move the motion recommending the committee to approve the Scottish regulator's code of practice, I would be happy to seek to answer any questions that the committee has. Thank you. Minister, does anybody have any questions that they wish to raise? Some of the responses to the original consultation on the first draft of the code expressed some concern that, for example, the definition of sustainable economic growth could be tightened and some specific suggestions were made on how that could be done, but they did welcome one aspect in paragraph 9, which made it clear that the regulators to which the code applies must take the code into account in developing policies or principles, but not in the application of individual cases, the exercise of regulatory functions in individual cases. The new version of the code, if I can just switch from one screen to the other, seems to have ignored both those comments. It seems to have done nothing to improve or tighten up the definition of sustainable economic growth, which has been a long-standing concern, but it seems to go in the opposite direction on paragraph 9 and apply to, in subsection A, determining policies and principles, but in exercising regulatory functions. That seems to imply a significant change in terms of the question of individual cases. Is that the intention of those changes? Well, I think that it's true to say that considerable attention and scrutiny was given, as Mr Harvey knows, to the definition of sustainable economic growth. The introduction and background to the code includes, for the record convener, the following definition of sustainable economic growth. Sustainable economic growth means building a dynamic and growing economy that will provide prosperity and opportunities for all, whilst ensuring that future generations can enjoy a better quality of life, too. The majority of the respondents were supportive of the purpose and intent of the code, and adjustments were made to reflect comments received during the consultation. However, it is fair to point out, convener, that the adjustments that we are considering today were made at the specific behest of the DPLR committee, who quite rightly drew attention to what appeared to be an inadvertent apparent contradiction between the code and the legislation. It would have served no one to have a code that contained an inherent contradiction of the terms of the act in which the Parliament passed, and, therefore, it is correct that the amendments to the code have been made. It may be that Mr Harvey and I still disagree perhaps in some of the larger policy questions, but we are here not to re-debate the terms of the act, which is now law. We are here to implement that act and deliver a code, which allows it to be debated in practice. Let me just say, as a matter of practice and how matters are dealt with by various regulators, at least from my perspective, that, generally speaking, there is a very positive approach of regulators, such as CEPA, for example, to the discharge of their functions. I think that that is increasingly being recognised by many businesses with whom I deal, not most recently by the Civil Engineers Contractors Association, with whom I met recently, who singled out CEPA for being a regulator who appeared to work with members of the civil engineers in the discharge of their duties. I think that there are many examples of regulators who are already espousing good practice, but it is entirely right that, both in principle and in practice, the legislation should be implemented as Parliament intended. I believe now, convener, that this amended code, which, as I say, deals with the specific points put forward by the DPLR committee, does precisely that. We do certainly disagree on the legislation and we disagree on the question of whether the concept of sustainable economic growth actually means anything, but I am not trying to explore that again. I am trying to get a specific answer to the change in section 9. The earlier draft, clearly explicitly, did not apply to the exercise of regulatory functions in individual cases. The new paragraph 9 seems to reverse that. Is that a correct interpretation? The original code did not reflect the meaning and intent of Parliament. The new code does, and, in that respect, I believe that the amended code is correct. It is correct in the sense that it will apply to the way that the regulators carry out all of their functions. I understand that, broadly speaking, the members of the working group who we consulted, convener, on these changes, we deliberately decided to go back to the working group to raise this matter afresh with them, and they are broadly content with that, as we understand it. I think that that is about as clear as it is going to get. I would just note, minister, that I remember when you came to the committee in December, raising the issue that has been raised with us by SCDI about the lack of reference to innovation. I am pleased to see that that has now been included, so that is positive. I also note that stakeholders who commented on the previous version of the draft code were alerted when the revised code was laid, but have raised no points in relation to it. If there are no further questions, we will move on to item 4 on the agenda, which is the debate. Minister, I invite you to move motion S4M-12158 that the Economy, Energy and Tourism Committee recommends that the Scottish Regulator's strategic code of practice be approved. It is moved. Do any members wish to speak in this debate? The amendments that were advanced both during the consideration of the legislation and in the discussion a few minutes ago with the minister, and I will be opposing the decision on the code. Any other members wish to speak? Minister, do you wish to respond? I repeat that I believe that the amended code now reflects the terms of the legislation, and I think that this, if I may say so, convener, is a very good example of how valuable parliamentary scrutiny can be. It is because of the efforts and the diligence of Nigel Don and his committee members in DPLR that we were able to detect and correct what was a manifest error in the code in which it has now been corrected. Therefore, I think that this is a good example of parliamentary scrutiny and the efficacy and diligence of committee members in this Parliament. Thank you, minister. I will now put the question. The question is that a motion S4M12158 be agreed to. Are we all agreed? We are not agreed. There will now be a vote. Those in favour of that motion please show. Those against the motion please show. That motion is therefore carried. I thank the minister for his attendance and for his officials. Thank you for coming. We will have a very short suspension just to allow you to leave. If we can reconvene, we are now on item 5, European priorities. Just remind members, we are still in public session. We have a paper before us on our European priorities for 2015, which you all have a chance to look at. As you will know, Chick Brody is our European reporter. I ask Chick if he wants to add anything in relation to the paper that we have. Nothing major. I would like to thank Clark for the discussion that we had in the preparation of the paper. Clearly, the European External Relations Committee are looking for input to the establishment of what the priorities of the Parliament should be. The three areas that I am recommending are clearly the TTIP, the Transatlantic Trade and Investment Partnership proposals that are gathering pace or heat or whatever application, but clearly it has fun. The EERC are of course looking at this, but it is important from an economy point of view that we certainly propose to keep a watching brief, but at some stage, without the wheels coming off, as we get more information, we may want to do further investigation of the implications for the Scottish economy. The second thing is, as we know, that we have had Mr Norman Kerr here more often than some of the committee members in terms of fuel, poverty and energy efficiencies. One of the things that, again, we need to address, which is the energy union strategy, is being tabled next month and includes energy security, carbon emissions and decarbonisation. Again, that is an important area for us given the investigations that we have done, and no doubt we will return to. The third area is the tourism industry. We had the Cabinet Secretary for Culture mention the meeting that she attended. I think that the European Tourism Industry has agreed to look at how we can connect, communicate with the culture and creative sector. Again, that is very appropriate given the discussions that we have had over the last few weeks, and looking at the training and skills that are required to support that. Those are the three submissions that I recommend to the EURC. I would welcome your support. Okay, thank you. Three issues identified TTIP, the European Union Strategy on Energy and the European Tourism Industry. I am happy to hear any views anyone will have on this, and I am happy to agree. Lewis Macdonald. I agree with the proposition that TTIP is clearly a major concern at the moment. Previous experience of European Union interest in energy has caused some issues in the past. I agree with the three themes that have been set out. I think that the concerns around TTIP continue to grow. Actually, there is substantial growth in the political opposition to some of the most dangerous aspects of TTIP at the moment. I think that there is a need to keep an eye on that. I would just say that I think that if we are going to look at it at all, it should go beyond the three areas that are mentioned, competition, technical barriers to trade and SMEs. A lot of the concern around the implications of TTIP go way beyond those three areas and into a whole host of the economic priorities of the Scottish Government. Whether we agree or disagree with the way those priorities are framed, a great many of them, including some of the social solidarity targets that are part of the national performance framework, are threatened by some of the implications of TTIP. I would want to broaden it out beyond those three themes. I agree with the thrust of that paper, Mr Brodyn. We will take that forward in 2050.