 Good morning and welcome to the 14th meeting in 2023 of the Economy and Fair Work Committee. Our first item of business today is a decision to take in private the evidence received this morning and also to take in private an approach to the paper on the bankruptcy and diligence Scotland bill and our draft annual report that would be in private at next week's meeting. Our first item of business this morning is an evidence session with the cabinet secretary for a wellbeing economy, fair work and energy on the Scottish Government's policy priorities. I welcome Neil Gray, cabinet secretary for a wellbeing economy, fair work and energy, who is joined by Colin Cook, director of economic development, Gary Gillespie, chief economist and Nick Young, head of carbon capture, utilisation and storage and industrial decarbonisation. As always, if members and witnesses can keep their questions and answers as concise as possible, that would be helpful. I invite the cabinet secretary to make an opening statement. Thank you very much indeed. Thank you to the committee for giving me the opportunity to be here today and share the Government's priorities in my portfolio area. The impacts of the cost crisis, the pandemic, Brexit and fiscal instability brought on by the UK Government decisions have brought untold damage to our economy with persistent high inflation and unprecedented drops in living standards. Coupled with the climate and nature emergency these crises have exposed fundamental weaknesses in the current economic system. This backdrop underlines the need to transform our economy to one that is resilient and prioritises wellbeing, one that serves people not the other way round. As the transition to a wellbeing economy, we will embed equality, inclusion and human rights into everything that we do. I am committed to the First Minister's three interlinked missions of growing a fairer, greener economy, seizing the opportunities of net zero and creating better communities. At the heart of a wellbeing economy is economic growth for a purpose, to drive improved living standards, promote wellbeing, reduce poverty and deliver sustainable high-quality public services. Harnacing and combining the economic power and opportunity of Scotland's rich renewable energy resources, the skills and talents of our people and businesses will be critical to achieving that. We will work closely with the private sector, the public sector, locally, nationally and UK-wide and we will engage directly with communities and partners in the third sector. Working with my cabinet colleagues we will deliver our national strategy for economic transformation with a sharp focus on policies and actions with the greatest potential to grow and change Scotland's economy, expand the tax base to fund excellent public services and make people's lives better. That will require a new approach to the Government's relationship with business. At the request of the First Minister, I will engage widely with business leaders to develop and agree a new deal with the private sector for how we will work with business to deliver a growing economy that increases wellbeing. I laid out my priorities and the First Minister's prospectus for what I want to deliver over the next three years and no doubt you will want to hold me account on those. My priorities include more people in work, more people earning at least the real living wage and narrowing the gender pay gap, more business creation and growing to scale, increased investment in productive assets, internationally competitive clusters of excellence, including in green technologies, health and life sciences, digital and advanced manufacturing, greater regional and local economic empowerment, including through our programme of community wealth building and further growth in exports and more high quality inward investment. A just transition for our energy sector is arguably the biggest opportunity that we have. There is a huge opportunity to establish Scotland as an exporter of green hydrogen to Europe, and the analysis shows that overall the number of low-carbon jobs in energy production could rise to 77,000 by 2050. The potential can be seen in the Scotland offshore leasing round, which has delivered more than £750 million in revenues already and will bring billions of pounds in investment into the Scottish supply chain and the wider economy. The recent announcement that Japanese company Sumatoma Electric is coming to Scotland to build a cable manufacturing plant demonstrates the strength of confidence investors have in our net zero economy vision. I look forward to discussing some of those points with you in greater detail this morning. I appreciate your opportunity that you have given me for setting out my stall this morning. Thank you very much. You have covered a wide range of issues, and the committee will be also covering a breadth of issues this morning, but we look forward to a constructive relationship as we look at our inquiries and future work programmes. Can I start with an open question about the change in emphasis to your job title, which was an economy that has now been changed to wellbeing economy? It is just over a year since the publication of the 10-year economic strategy. Is there an intention to look again at the strategy, to look at where the priorities are, to look at the five programmes of action? What will reflect the change in emphasis to the economy role? The wellbeing economy elements have already been run through. We have a wellbeing economy metric built in through NSET, which means that we are continually monitoring the progress that we have on those areas that we want to chart, including our sustainability, targets on child poverty, ensuring that we are narrowing the gender pay gap, for instance, and ensuring that we have more people going into employment. The change in job title is around providing a refocus about making sure that there is a prominence given to wellbeing elements, but the First Minister has also set me a very clear task, which is to reset the relationship with business and to ensure that that relationship is strong, that business continues to perform well, to ensure that we are able to deliver the wellbeing elements of what we want to achieve in Government. There is not going to be a change to NSET. There will be a sharpening of our focus, which comes from the policy perspective, which looks at the areas that I have set out that come directly from NSET, but we are committed to continuing to deliver on the priorities that are within the national strategy for economic transformation. Is there some criticism that there is an oversimplification or there is ambition over a delivery when it comes to looking at how a wellbeing economy should actually be introduced, that the tensions that are there between, for example, maybe our international trade policies and our co-operative policies, or one example has been used in the deposit return scheme, the way in which that was trying to balance different interests? It is fine to declare that we have a wellbeing economy, but it is how do we deal with the tensions that arise from that, and how does the Government intend to get to the nub of that? NSET is the guiding light there, because that has the metrics and the measures within it to ensure that we are tracking the progress that we have. I do not think that there are tensions there. I think that there are areas in which we need to make sure that we are delivering well for people and for our planet, and that the deposit return scheme is one area of that. The deposit return scheme is also an economic opportunity, if we can get recycling rates right. That is a clear business opportunity for dealing with commodities that are coming through the waste market. I think that there are major opportunities coming forward. What the wellbeing economy elements do is make sure that we are focused on delivering for people not just the traditional GDP growth elements. Growth is important, but it is important for a purpose, and that is to ensure that we are delivering on for better lives for people across Scotland. When Kate Forbes published the document just over a year ago, the focus was on entrepreneurship and encouraging growth within the economy. Is that still the focus? Yes. That work is still on-going. You can see the work that has been done with the text scalar network. We are currently analysing Anna Stewart's report and Mark Logan's report on women entrepreneurs. We are looking at what more we will be able to do to make Scotland an entrepreneurial hub. When the Deputy First Minister was here last time on the topic, he said that the first annual progress report, the governing end set, would be published in 2022. I do not think that it has been published yet, or has it been published? Do we have a timescale for that? Sorry, it is not published yet. It will be due in May towards the end of May. That might give the committee an opportunity to screw that and come back to those issues. Ms Hyslop, do you have a supplementary to the statement? Two areas, once on your main remarks. Where do you think there are specific vulnerabilities to the Scottish economy and what measures are you taking to support Scotland's economy? There has been clear damage done to Scotland's economy by decisions that have been taken out with our control. Brexit has had a major impact on Scotland's economy, a greater impact than the Covid pandemic. The UK mini-budget, delivered by quasi-quartang and Liz Truss, has also had a devastating impact. The key risks to Scotland's economy come from areas out with our control. We are doing what we can to mitigate those by providing increased business support and looking to areas where we can maximise growth and job opportunities such as the entrepreneurial network, the tech-scaler network that the convener raised earlier on. You mentioned in your opening remarks about the importance of building a resilient economy. You might be familiar with the committee's report into the supply chain for Scotland to build a resilient supply chain to withstand some of the risks. To address issues such as embedded carbon, carbon miles, the smart use of procurement, perhaps advanced manufacturing and looking at Scottish-based domestic supply chains, which are shorter and greener, but also are more resilient, is that an area that you would look at and would you draw on the committee's report in that regard? Yes, absolutely. We spoke about some of this yesterday, Ms Hyslop and I, regarding ensuring that we have a strong domestic supply chain to feed our offshore wind opportunities and we're continuing to do what we can to ensure that that is brought forward. I'll bring in the chief economist here to supplement that to give more detail. The supply chain element obviously started during Covid. We were looking at how we could boost local supply given the supply chain issues with Covid, in particular issues of health. I think that what we're seeing is a reset in the economy at the moment. Actually, the resilience point is really about, not just within Scotland and the UK, businesses are looking at shorter supply lines now and looking to take out the carbon elements, looking to make the supply chains much more secure so that they're not impacted by external events in other countries. We're seeing that continuation in Scotland. I think that the best example is probably around the Scotland programme, where along with offshore licences there's a commitment to really build the supply chain. I think that that's what we need to do, but it's not just in that sector. I think that what we've seen since EU exit is a reorientation of trade, less imports, more local supply coming to the fore because it's more difficult to trade both inward and outward. I think that rebalancing is happening in the economy. It's both a challenge and an opportunity. There's an opportunity for businesses in Scotland to really embed that opportunity to supply much more locally in a much more sustainable fashion. I think that we'd be interested in knowing what you're doing to help support that shorter supply chain, not just in the Scotland area but in the wider economy as well. I was just to come back on Ms Hyslop's previous question about the risks that there are to Scotland's economy. I should have mentioned the fact that Scotland's economy is performing incredibly resiliently considering the difficulties that there have been following Brexit, Covid and the UK mini budget. The economic growth currently outstrips that of the rest of the UK. Last year, we had much stronger economic growth than the rest of the UK. We will continue to do what we can to support our economy in the face of the very difficult challenges that businesses, the third and private sectors, are facing. I'll bring in Graham Simpson to be followed by Colin Beattie. Thanks very much, convener. Cabinet Secretary, you've got a massive brief. You cover an awful lot, so I'm just going to focus on probably just one bit of it. That's something that the Auditor General referred to in a report, and that's Scottish Government investment into private companies. He made some sort of quite tough comments, and he said of your involvement in BiFab, Ferguson Marine, Presswick Airport, Milok Arba, Smelter, that financial support for these four companies has not delivered expected outcomes and is unlikely to achieve value for money. I want to ask you today about Presswick, and then I'll ask you about Ferguson's. The Auditor General said of Presswick that the airport was bought by the Government in November 2013. It's had loan support of £43.4 million. That was up to the 31st of March last year. When he wrote that report, it was valued at £11.6 million. Do you know what the value is now? I'll bring in Colin Cook at this point. I don't know the current value off the top of my head now. Perhaps Mr Cook knows. No, I'm afraid. I'd have to come back to the committee with a precise valuation, and I think it's worth saying that we continually work with the board of Presswick Airport, and we do receive offers to purchase the asset, because it is recognised to be a strong asset both nationally and particularly for the economy of Asia. That question is something that we would keep under review, but I will come back to the committee if we have a more updated valuation. Is there any current interest in buying the airport? I haven't had any signal to me, but we continue to discuss opportunities like that with the management of Presswick Airport. In my mind, as Mr Cook has outlined, the business is profitable. The most recent information that we have is that the operating profit was £1.9 million, and the profit before tax was £1.2 million. It's a good-going concern, so I would expect commercial interest to be forthcoming, and where that interest arrives at government, we would have, of course, looked to support Presswick Airport to return to the private sector as soon as it is practicable. Is it still your intention to sell the airport? Yes. It is. You said that you are not aware of any interest in buying the airport. Nothing has come to many of your officials. There are regularly approaches of various qualities and standards around Presswick Airport. There is nothing at the moment on the table that we would regard as a going offer, let us say. I see. That's interesting, because I'm aware that there is currently, there has been an expression of interest which has been put to the board of the airport in buying the airport, and I am concerned that you, Cabinet Secretary, are not aware of that, and it would seem to me that you should be aware of that. I'm not blaming you for that. There seems to be a problem here that you have not been given that information. The process that is followed is that, if we do receive an offer, the board of Presswick Airport considers that offer. If they believe that there is something in that offer or that it is in the sort of board park that we should be interested in, they then talk to us and we would go forward and we'd involve the Cabinet Secretary at that point. At the moment, as I say, there is no offer on the table that the board of Presswick Airport considers to be a realistic and sustainable proposition. That may well change, because, as I said, constantly there are people interested in what is a fantastic asset for Ayrshire and Scotland. It is a fantastic asset. It seems to me that what you are describing here is that if the board of the airport decides this offer or expression of interest is not worth telling the Government about, that's where it ends. The board of the airport would always talk to us about any offer that we receive. We would receive that offer and we would consider it. We would take the views of the board as the initial starting point of our analysis. If there is something in that offer, if we think that it is worth pursuing, we would then do what we would always do in these situations, which is to draw in external advice, specialist advice and make sure that we get a good deal for the Scottish taxpayer. As I said, at the moment, that latter process is not being carried out on any particular offer, but if we do get an offer that looks on the face of it to be worthwhile, we would do that. I have informed you that I am aware of an expression of interest, so I would expect you to go away and have a look at that. Can I ask you about this loan? There was a big loan. Is the Government at any point going to be asking for that money back? Obviously, we keep the situation under constant review, and we will be looking to recoup the money that has been invested in Prestwick as best as we possibly can to ensure that there is good value for the public purse. That is what Mr Simpson would expect. I will move on to Ferguson Marine, if that is okay. To allow time for questioning today, I hope that you do not intend to go through every when you have been going to BiFab after Ferguson Marine, or I do not have enough time to do all the areas that you might be interested in. No, I just said Prestwick and Ferguson Marine very quickly, because we know the issues around Ferguson Marine and we do not need to rehearse them. I refer to questions from the Auditor General raised in his recent report. He does not know what the future holds. What do you think the future holds for Ferguson Marine? What are the prospects for this yard in your view? I hope that Ferguson Marine can continue to make progress to being a commercially successful yard. That was the intention of saving the last commercial yard on the Clyde to ensure that we protect the jobs and the manufacturing base that is there and the traditions of Scottish manufacturing. Clearly, there have been challenges at Ferguson's that is well documented, but we continue to work with the management and the workforce to ensure that the two vessels are delivered as quickly as possible and then there is the opportunity for Ferguson's to bid for further work and to make itself commercially successful. At some point, the same question about Prestwick really, is it your intention to return Ferguson Marine to the private sector? How do you think that you are going to get to that point? The better Ferguson's is performing, the more likely it is that it is going to return to private ownership. If interested parties come forward or will talk to Government or to our agencies, we will take that interest seriously and do what we can to ensure that the yard is returned as a commercial going concern into private ownership as quickly as possible. Colin Beattie, to be followed by Michelle Thomson. Cabinet Secretary, there are a couple of areas that I would like to explore. Could you perhaps give us an update on the review of the skills landscape that is being led by James Withers and the plans to refresh the climate emergency skills action plan? Also, on the back of that, how will those two reviews be joined up? I thank Mr Beattie for that question. We are expecting Mr Withers' report very soon. When that arrives, both myself and colleagues across Government, because obviously this touches on areas of responsibility not just for myself but for Jenny Gilruth and Graham Day and others across Government, we will ensure that we respond to that in a timuous fashion and take what he says seriously. On the second element, on the climate report, I will turn to Mr Gillespie to fill in the detail there, please. Maybe we would be better following up on that. The climate emergency skills action plan is currently being updated and it is obviously central to what we are doing in that space, and it will link into the report that we are expecting. Both of those will come together and I think that they are both interlinked in that sense. We will make sure to follow up and write into the committee as and when that report from Mr Withers comes back and to give confidence to Mr Beattie's question that the two elements will be joined up. There is just one other area that I would like to explore a little bit, and that is about money. None of that is going to happen unless there is sufficient investment available. Obviously, Government investment probably will be somewhat limited in comparison to what has been described as an eye-watering sum that is needed to succeed with a just transition. However, we have also been assured that there is plenty of private capital available. The calculation was done not on a UK basis but on a global basis. How do we know that there is going to be enough specific capital available to Scotland to cover those costs? That is a work in progress and part of the area that we touched upon in my session with the Net Zero Committee yesterday was on how we ensure a successful supply chain but also a successful infrastructure to ensure that we are able to deliver on our net zero ambitions. Mr Beattie is right that public finance is finite and we have already touched upon the current challenges that there are in terms of public finance as a result of the areas of impact that there have been over recent years, thanks to decisions outwith our control. We continue to work with the likes of the Scottish National Investment Bank and our investor panel to look at where we can leverage private capital to ensure that we are able to meet those demands, both in terms of private capital coming in for the supply chain, but also in terms of the infrastructure that is going to be required. The scale of it is indeed very challenging. The electricity service operator estimates that, for the grid infrastructure alone, it requires a £7 billion investment. It is a substantial amount of capital that is going to be required. We will do what we can, both in terms of our investment priorities, to deliver as much as we can within that envelope, but we will also be looking to work with private capital to ensure that we can meet those demands. The private capital is only going to come in if it has reasonably managed risk and if it gets a return on their money. Given the highly speculative nature of some of the initiatives that are under way, we are still dealing with emerging technology. How are we going to de-risk that? De-risking obviously means that the risk moves someplace else, not that it is eliminated. Would that entail the Scottish Government taking on additional contingent liabilities? Mr Beattie is right in his assessment around where private capital will arrive at. We are working, as I say, with the likes of the Scottish National Investment Bank, to look at ways of making Scotland as attractive as possible for inward investment. Scotland already is punching above its weight in terms of inward investment compared with the rest of the UK. We are already giving some confidence to the market that we are a good place to invest. I have just returned from Japan, where a very significant decision was taken around inward investment to help support the supply chain for our offshore wind opportunities from Sumitomo Electric. They are looking to build a very substantial factory here in Scotland to produce the cable that is going to be required for the offshore wind industry. Mr Beattie is right that we cannot be complacent, but I think that we already see good confidence from the market as Scotland being a good place to make investment decisions. Given that the assessments have already been made globally, there is adequate private capital available, which seems a bit odd to me, because private capital is already much in demand for financing existing technologies and industries. It seems strange that there is a massive surplus of capital waiting to come in. However, that was a global calculation. What is the calculation in Scotland and the UK as to the availability of the capital within our markets without having to rely on competing with other countries? We are competing on an international scale, which is why our international network and the work that the likes of SDI and our office network internationally do is so important. They build their relationships, such as with the likes of Sumitomo, to give confidence and to outline the opportunities that investing in Scotland gives them. We will continue to work with the likes of Scottish Development International and our international network to ensure that the investment priorities that we have, which we have already outlined around our net zero commitments and the supply chain, are communicated to potential investors globally. You look at the investments that have been made in the United States and in Europe—the new green deal—you can see that we are competing in a highly competitive international market. We cannot afford to allow ourselves to be left behind when our net zero ambitions are very challenging and the decisions on areas such as offshore wind and hydrogen will be crucial in us continuing to be a world leader on offshore wind and continuing to have the opportunity to be first to market in the likes of green hydrogen. My encouragement would be to the UK Government to look to match some of the investment incentives that have been made by the European Union and the United States to ensure that we are not left behind on a competitive front compared to those nations and regions. We are taking over from Graham Stewart, the Minister for Energy and Security, and it is zero from the UK Government after yourself, so I am sure that some of those issues will come up again this morning. I look forward to listening to that back. Good morning. It is a slight failing of Plou Stachange as I addressed four men in my favourite theme about how we alleviate some of the issues of women's representation in the economy, and I am sure that you will not be surprised. I have seen the promotion of narrowing the gender pay gap that you mentioned earlier, but it is so much more than that when we look at the systemic issues in our economy. I remarked in the debate last week that wellbeing, particularly, must have a gendered lens utterly fundamentally. I am being completely honest. I feel as though if anything, we are moving backwards rather than forwards. The reason that I say is that my colleague Ms Hyslop, who made sure that there was an insertion of a women's business network and a spend of around £50 million, was incorporated into what we were looking at in relation to the Anasturet review. My first question to you is, can you give me more flavour of what specifically you are looking at in the Anasturet review and when you are going to be able to come back with what recommendations you are able to support? That is my first question. I thank Ms Thomson for her questions. First of all, I will say that I absolutely take the charge around Emanuel being before her. I was cognisant of that before we came today and made that very reference to colleagues before we came today. I have to say that yesterday in front of the net zero committee I was flanked by two incredibly able women. We have incredibly strong women across the Scottish civil service, as well as very able men that are before you. Ms Thomson is absolutely right to focus in on the opportunities that there are from us, not just narrowing the gender pay gap but the gender employment gap and ensuring that women are able to get on in enterprise. It is a massive economic opportunity as well as being the right thing to do. If we are to succeed in meeting economic growth opportunities, then having women get on in enterprise is going to be incredibly important for that aim. I happen to be meeting with Anasturet later today, where I look forward to discussing her report and how we might be able to implement that. I am committed to ensuring that we are honouring the report as best we possibly can in a timescale that resources would allow us to do so, but it is absolutely central to the opportunity that we have, both in transforming the economy to being an innovative, agile economy but one that ensures that women are able to continue to perform well within it, which drives the economic growth that we are wanting to see. If I could emphasise one area that is actually in our Astur's report and is encapsulated in recommendation 30 is around the collection of data. As it stands at the moment, we do not have the data sets that enables us to gather what we need to measure it and to affect change. Arising from that, we further do not apply any conditionality to public sector funding, whether it is to women or indeed equalities generally, which I accept is a wider area. Can you give an indication of how open-minded you are to at least taking the first step? I emphasise that it is the first step, because if you cannot measure it and improve it, if you do not even collect it, that is why, in my opinion, we are at a pretty low marker. Are you willing to commit today to look at that as a minimum, which incidentally is an undertaking that I have had from the former Deputy First Minister? That did not come to pass, either. I am really pushing you on that, if you could. I think that Ms Thomson absolutely gets to the nub of the issue. We need to understand the landscape in which we are operating in order to ensure that we are informing policy decisions to improve the situation. To answer her question directly, I am more than open-minded. I think that it is the first step to ensure that we are working on that initial recommendation. I cannot give a full commitment until I have met Ms Stewart and until we have published our response in detail, but she has certainly got a sympathetic ear from me in that regard. Thank you. Gordon Macdonald will be followed by Colin Smyth. Thank you very much, convener. Morning, Cabinet Secretary. I wanted to ask you about Scotland's export performance. The trading nation, the strategy for growing exports from 20 per cent of GDP to 25 per cent of GDP, was quite an ambitious target. We are in year four of that strategy and we have been faced, as we have been taken out of the EU against our wishes and faced a global pandemic. Are you able to update the committee on where we are in growing our export market? We are currently sitting—colleges will correct me if I am wrong—at 21 per cent. That is in spite of the challenges that have been faced with the challenges that Mr Macdonald outlines in terms of Brexit in terms of the global pandemic and decisions taken by the UK Government outwith our control that has obviously hampered performance. Our international network performs an incredible job, as I have already outlined, of supporting inward investment into Scotland, but also supporting exports as well. I am able to see that as Ms Hyslop, one of my predecessors, will have been able to do on the international engagements that we have carried out. The SDI network in particular performs an incredible job embedding themselves in target markets, understanding those areas and getting building incredibly strong relationships with business, but also understanding the domestic business needs as well for exporting. We continue to support the—I believe that it is 1200 target businesses in Scotland that have the highest propensity for export to ensure that they are continued to be supported in that regard. It is an incredibly important area that we will continue to support. You mentioned strong relationships with countries that we are aiming to grow our exports in. How important is the Global Scott Network? We have currently got over 1,000 Global Scots. Mr Robertson outlined earlier this year the importance of the Global Scott Network in feeding that business, academic and other needs. I was able again in Japan to meet one of our newest recruits to the Global Scott Network, who operates across Japan, America and Europe. They give us incredibly strong contacts. They advocate for Scotland and we need to utilise them more, not less. Just getting back to the situation with the EU. In the strategy, nine of the top 15 markets identified were in the EU. We have been taking out of the EU against a will with 62 per cent of the population voting to remain in the EU. What impact has that had on Scotland's exports? Is there a need for us to refocus on the other countries that were listed in the strategy? I am thinking about America, Canada, Switzerland, Norway and China. It has undoubtedly had an impact both in terms of political relationships but also in terms of trading relationships. We have seen incredible uncertainty and difficulties from a trading perspective over recent years. We have welcomed the progress that has finally been made with regard to the Windsor framework for the trade elements, but that comes off the back of a number of years of incredible difficulty for our exporters into Europe. On a political level, we continue to try to make sure that we have strong working relationships with our friends in Europe and that we will continue to do so, because it is an incredibly important market for us, as Mr Macdonald has outlined. However, the other countries that he mentions are also important. That is why our SDI network performs such an important job, ensuring that the areas of trade that particular countries we have strength with—or particular products that we have strength with—are able to ensure that we deliver on our ambitions from a trading perspective. However, I do not know whether Mr Cook or Mr Gillespie want to— One of the things that I would point to is the alignment between the domestic economic agenda and our international ambitions. We see the same priorities within, for example, the work that is going on to develop Scotland's innovation strategy around life sciences, tech and the priorities of SDI, the support that the Government gives those exports, and you are absolutely right, Mr Macdonald. We are looking and we are studying markets such as the USA and Canada for opportunities. It is not an either-or, it is both, but we are trying to support Scottish industry in those new markets. In supporting Scottish industry to look at the new markets and for innovation, etc. What is the role of the trade board that was set up? I realise that the membership was updated in June of 2022. What was the reason for that? Is there a new focus from the trade board? Are you able to? Come back and write into Mr Macdonald that point. That is an area that predates my involvement. I will need to come back on that. My final point is that I believe that there has been a delay in publishing the most recent export stats, and I was just wondering if you could give us some background to that. Export Statistics Scotland is our main publication. It gives the exports both from Scotland to the rest of the UK and the rest of the world and breaks it down by market and does imports. During Covid-19 2020, we paused the survey. For a number of reasons, we felt that it was not appropriate to go out at that time. We have now done data collection for 2020-21, and that has been processed at the minute. We will publish that probably towards the end of the summer. Because of the delay, we have looked to review the methodology to see whether we can improve the data, given that we have taken more time over it. We will publish those updated statistics later in the year, and we will go out shortly to survey for the 2022 data, because it is really important data, because it gives us the breakdown. We will update that, and any changes in methodology we will take back through the series so that we have a consistent set. There has been a delay, partly Covid-induced, but now we have got an opportunity to make a better survey of it. Thank you. Before I bring in the next questioner, the 2022 target of increasing exports to 25 per cent of GDP is still the target that the Government is working towards. Yes, and we are currently sitting at around 21 per cent of GDP. The first question that I asked around wellbeing economy and tensions within it is that, within trade policy, it is often needed that it is focused on for how does that marry up with the idea of a wellbeing economy? I think that Gary Gillespie talked about a move towards more local supply, and Ms Haslop mentioned our supply chain inquiry, which pointed towards those issues, particularly concerns around climate change and emissions in terms of transportation. Has that led to any reflections on what our trade policy target is, whether that is still relevant in terms of how we see the economy shaping in relation to wellbeing economy and climate change pressures? Yes, we continue to reflect on that, obviously, and ensure that the work that we are doing as a trading nation is done in an ethically unsustainable way. We continue to take the areas that you have suggested, convener, into regard when we are doing our work to ensure that, where possible, we are doing our work in a sustainable way that ensures that we are seeing economic performance, but not too much to the detriment of our net zero ambitions as well. In terms of taking it into the guard, I think that you have mentioned it, such as what Colin Cook mentioned. Did she say that there were reports into our exports figures? Has that been changed in any way to take a wellbeing economy approach into consideration in the way in which we view that exports are what we look for, where we look for growth sectors within exports? Sorry, convener, I am struggling with my voice. I was referring to some studies that are being carried out specifically into markets in the USA and Canada, and those are in-depth studies about export potential, not about the way in which figures are reported. Has the research been carried out by the Scottish Government? Is that independent research? Does that take into account the Government's approach to a wellbeing economy to think about what areas we want to expand in terms of exports and imports? I would have to come back to the committee on the organisation that is carrying out the research on our behalf. However, the wellbeing economy and the ambitions of the wellbeing economy are clearly articulated within NSET, so that remains our extant strategy. Everything that we do is linked to the achievement of NSET, so there will be a flow-through. When it comes to the report that we are now expecting in May, the annual report on NSET, is the focus and evaluation on that? Is that around what a wellbeing economy is? Are we delivering on a wellbeing economy? Yes, that is the short answer. There is a wellbeing economy metric that flows through NSET and the pillars that form it, so there will be a wellbeing economy lens on the performance and delivery of NSET, yes. It is an annual report. Obviously, the strategy was published March last year, and it is a first annual report that will chart progress over the year in terms of the actions that have been taken forward under NSET. Colin Smyth, we followed by Maggie Chapman. Thank you, convener, and good morning to the panel. One of the priorities of NSET is obviously to capitalise on the opportunities of the transition to net zero, but would it be fair to a fair assessment to say that we have seen the growth of renewables significantly reduce carbon emissions? It has not delivered the economic benefits that it could have for Scotland. We were promised 130,000 green jobs by 2020. The Fraser Valley Institute put the actual figure at 27,000. Recently, the trade unions highlighted the fact that we have only seen around 3,100 jobs created in offshore wind. Why have we failed to deliver the real potential in jobs from the growth of renewables? We have created a new offshore wind directorate in order to ensure that we are learning from the process that was under way in terms of onshore wind and the supply chain that fed it. You will see the early stages of that coming to fruition in terms of some of the potential investment decisions that are coming through as a result to ensure that there is a strong domestic supply chain here in Scotland, the lengths of the sumatomo announcement, but also the potential investments in the likes of Ardis Ear, Kishon and other ports, where I would hope that we are able to realise the economic benefits, the jobs benefits, that the renewables revolution has the potential to produce. You say about learning the lessons, cabinet secretary, from onshore wind. The trade unions recently highlighted an analysis that showed that we are also failing to deliver when it comes to offshore wind. They highlighted the latest office for national statistics, low-carbon and renewable energy estimates that showed that, in 2014, for every £1 million of income made by offshore wind farms, it was translated to seven jobs. That is plummeted to just one job per million pounds of turnover for offshore wind farm companies in 2021, so that the big wind farm companies seem to be doing rather well out of it. Why is it not translating into jobs? Why are we appearing to be going backwards? That is exactly what we are looking to try to address in the work that we are doing and the work that our international network is doing to attract investment into Scotland and to procure a domestic supply chain that feeds our growth still to come in onshore wind, but also the massive growth that is still to come in offshore. Mr Smith's points are well made. We continue to reflect on them and ensure that we are providing as much support as possible to ensuring that we have a strong domestic supply chain. That is again a point that I was making to the net zero committee yesterday in response to a strong but fair challenge from Ms Hislop. It is important that, where communities have our neighbouring to either onshore or offshore projects, they are able to see discernible benefit. That comes through community benefit but also in terms of the economic performance that is derived from having a strong Scottish supply chain and domestic jobs that feed it. We are absolutely committed to that and we will continue to do the work to ensure that we are honouring that. Just on the figures, you are quoting, and, obviously, those sectors are really highly capital intensive. Onshore wind is the same. The actual multipliers and local benefit is much reduced, but what you do get is the capacity of bringing on renewables and providing opportunities to the wider economy. That is really about energy resilience and economic resilience. It is quite similar in capital intensive industries that a lot of the benefit comes in that early investment stage and it is maintenance thereafter. However, the benefit of having that energy that we are now seeing through the investments that are coming to Scotland to develop that into other forms of energy, whether it is hydrogen or other sources. It is a two-way thing. Those figures are quoted from the trade unions. They showed that in the seven years of 2021 turnover for those companies has gone from £95 million to £2.594 billion. The number of jobs that has been created in Scotland is 3,100. That is a lot of money for the wind farm companies and not a lot of jobs. What are we going to do differently when it comes to Scotland to make sure that we actually get those jobs? Will the Government have a target because we know that Scotland will create jobs? Of course it will, but will it create the potential that we believe that it can and should? Will we have a very clear target for the number of renewable jobs that will come from Scotland? I have already outlined the potential for green jobs that come from having a good just transition. We will continue to work with the supply chain development programme to ensure that we are maximising the opportunities of ensuring that there is a strong domestic supply chain feeding what is a growing and incredibly strong potential for our renewables programme. We are world-leading and again referring back to my engagements in Japan. The Japanese, others around the world, are looking to what Scotland is doing as a first to market in terms of the offshore wind, green hydrogen, particularly floating offshore wind. We cannot be complacent as being world-leading. We need to make sure that we keep peddling fast to ensure that those investment opportunities are there and ensure that there is discernible economic benefit domestically. That includes ensuring that there is a strong domestic supply chain and ensures that there is a strong jobs performance as well. That is the way that we ensure that there is a just transition. We have made a number of investments through the Just Transition Fund, including the skills passport, to ensure that we have jobs transferring from your traditional oil and gas sector into the renewable sector. We will continue to make those investments to ensure that communities are not left behind in the way that they were in the deindustrialisation under thatcher in the 1980s and early 1990s. What would the proportion of those supply chain jobs be for Scotland from Scotland? The chief economist has already said why it would be difficult to make specific targets because the development of those projects is capital intensive. Sometimes, depending on the project that we are talking about, we can see clear, disenewal benefits in terms of jobs. I give Mr Smith the undertaking. The Government has determined that the establishment of the new director within Government gives credence to the fact that we are determined to ensure that we have a strong domestic supply chain that delivers good jobs in Scotland from the renewables revolution. If I may just answer that. The cabinet secretary has spoken about the creation of Scotland, which I think is a really important marker of our ambition. It is also worth pointing out that the enterprise agencies in Scotland, particularly Scottish enterprise, are really refocusing all their actions and prioritising that as the markets of the future. I think that that is really significant because it shows the whole of the economic development infrastructure of the Scottish public sector focus on the same target. I think that you can have some comfort and assurance that we are focusing on this very strongly throughout that network. It should, because it is an opportunity for growth, but it is just that there is a deep concern that we will not meet the potential. Particularly if we do not even know what the proportion of those supply chain jobs from Scotland will actually come to Scotland. There is a concern over that that we will make the same mistakes that we made in the past. In the south of Scotland, all the wind turbines, pepper and the landscape in my region, none of them are built in Scotland. We need to make sure that we do not make the same mistake with Scotland. It is likely that I have to say that we are not able to set a target for the proportion of those supply chain jobs that will actually come to Scottish companies so that we can measure that. I do not know if I have time to completely pivot to a completely different subject. On a completely different subject, one of the issues that I am keen to hear from the Government is on the role of co-operatives in the wellbeing economy. That will mean changing your pages quite significantly because it is a completely new subject. What do you see as the role of co-operatives and how will the Government support the growth of co-operatives in Scotland as a model? I should declare an interest at the stage as a member of a co-operative and highlight the fact that I am incredibly supportive of the work that they do. They are the embodiment of what wellbeing economy is all about, where you have good, strong, ethical business practice that sees clear, decentable benefits to local communities. We will continue to do what we can to provide support to the co-operative movement and ensure that they continue to flourish. I should declare an interest as a co-operative MSP, convener, but what does that mean in practical terms? What proportion do you think co-operatives should make up of the Scottish economy as a result of that support that the Government is likely to give them? Obviously, we want to see them continue to succeed. We do not have a particular target in terms of the question that Mr Smith has outlined, but I will be happy to provide more information to the committee on the work that we do to support the co-operative network of the back of us. I think that Mr Kluw wants to supplement my question. I would point to two actions. First, the work that we have been doing on community wealth building and the consultation that is just closed around future legislation, which I think creates a framework in which to promote different forms of business models. Secondly, the end set to refer back to the strategy talks about our economic ambitions as being to create a diverse economy. It talks about creating an entrepreneurial mindset in all sectors of the economy, and that would include alternative business models. We are taking action, and we will use the economic development network that I referred to earlier to focus on promoting alternative business models within that. Good morning to the cabinet secretary. Thank you for joining us this morning and for what you have already said. Like Colin Smith, I want to focus my questions on two different areas across your portfolio. The first being fair work. The Scottish Government has pledged to make Scotland a fair work nation by 2025. I was just curious to know how you see this being measured, where you see the challenges are and how progress is going, given that that is not two years away. I was very pleased that one of the first meetings that I had upon taking office was with the fair work convention. The role that they play is incredibly important as a partner, but also as a critical friend in holding us to account to ensure that we are doing all that we can to honour our fair work commitments. We have refreshed our fair work action plan, which was published in December last year, which sets our approach to embedding fair work and tackling workplace inequalities. I wonder where you see some of the challenges. It is all very well saying that we will be a fair work nation by 2025. What is that going to look like? Are there any areas that you are concerned about in us being able to realise that ambition? It is a constant challenge. I have got a responsibility across Government to ensure that I am driving a fair work agenda. We are doing well already. We have the highest level of employees paid the real living wage anywhere in the UK. The lowest number paid below the real living wage anywhere in the UK. We have also got incredibly strong labour market statistics that pose an opportunity, but also a challenge. A very tight labour market poses opportunities to discuss with employers the importance of advancing the fair work agenda to reduce workplace attrition and ensure continued support of employees. We will continue to progress that alongside the likes of the fair work convention, the work that we do closely with the STUC. I am due to meet Ross Foyer soon. Again, I believe that I was on the table with her at the anti-poverty summit that the First Minister hosted last week and had a very good conversation off the back of that. We will continue to do all that we can to ensure fair work drives success, wellbeing, prosperity for individuals and businesses, and ensure that employers continue to understand the importance of demonstrating fair work, not just because it is the right thing to do from a social perspective but because it derives good economic benefit to their organisation as well. I suppose that one of the areas of interest that I have particularly is pushing conditionality as far as possible. Obviously, we know that employment law is reserved, so there are limits to that. Do you think that we are pushing the fair work conditionality in public sector grants as far as we could? Where do you see progress still to be made in that space? I appreciate Maggie Chapman's question here. Obviously, as a result of the Butehouse agreement, we have conditionality being attached from, I believe, the first of July, where public sector procurement has fair work principles attached to it. I think that that is an important first step. Obviously, we will keep that conditionality under review in terms of effectiveness, but we will also need to ensure that there is time from the start of that process in the first of July to ensure that that is monitored, to ensure that it, as I say, is effective. We can review whether or not there are opportunities to reform that in any way. If I can shift to my second area of questioning, and that is around local and regional economic development, you spoke in your opening remarks about economic empowerment for local communities, creating better communities. Obviously, the realising of a genuine wellbeing economy is engaged in resilient local communities with decision-making powers and a real say in their local and regional economies. Can you identify what your priorities are for the regional economic partnerships? How do you see those being developed over the coming months and years? We are looking to build on the city and regional growth deals that have come through and respond to the review of regional economic policy to work with regional economic partnerships to ensure that regional intelligence hubs simplify the funding landscape. I am due to meet with our enterprise agencies over the coming weeks, where I will be looking to discuss that and the suggestions that they have and how I respond to those over the coming weeks and months. I suppose that the links to or extends the questions that Colin Smyth was asking about how we ensure benefit for investments such as Scotland are retained in local communities. We do not want to recreate two-speed economies, as we have seen in previous times in different places. Something that is key to that is a clear placemaking agenda. We have seen that in work that the committee has done in previous inquiries. How do you see placemaking fitting into that regional economic development agenda? Where are the barriers to achieving that? Place is incredibly important. I represent a constituency with an incredibly strong feeling of place, but I also come from Orkney, where place-based economic development is clearly well defined and there is a very strong feeling of place. I understand well the importance of place. As I said, the discussions that we have with our enterprise network ensure that there is a good, strong support for economic development in their regions, but also ensure that we are capitalising on the good work that is already going on indigenously in those areas. We also respond to the economic priorities that we have set out in the end-set and with our just transition strategy to ensure that we are taking advantage of the opportunities that there are in different areas across Scotland. I think that it would be a challenge for us to say that there is going to be a homogenous approach to this across different areas, because each region, each local area, a place is going to have a strength that others might not have. We need to ensure that we are building on the strengths of each local area to ensure that we are seeing the best economic performance possible. If I may, convener, I think that hopefully you will see the answer to that question in the two things that we have referred to over the last few minutes. Firstly, the regional economic review, which we accepted and, as the cabinet secretary said, we are now prioritising work on the funding landscape and intelligence hubs, our commitment to working with regional economic partnerships to ensure that the regional priorities are reflected, and the work that we do within community wealth building to encourage those regions to use that as the vehicle for ensuring that the benefits do bring benefits to local communities. I think that it is in the combination of the two, the regional economic policy focus and community wealth building, that you start to see the answer to the question that you posed, Mr Chapman. That thanks very much for that, Colin. I suppose that one of the challenges with that is that when you have city region deals, community wealth building, you have all of those trying to fit together, how is it that we do retain economic development coherence, but also within that policy coherence? It is perfectly possible to see a situation where we have alignment around a regional economic partnership that jeopardises some of the community wealth building agenda or priorities that parts within that community, within that region, might have. I just wondered how you are assessing that overall coherence across all of these different economic development opportunities and agendas. What I would say is that we share your understanding that coherence is important. Clearly, if you are pursuing a strategy that is based upon regional priorities and the interests of local communities, there will be diversity. That is implicit within that approach. What we try to do in government is to find ways of supporting the regional economic partnerships to be able to acquire the intelligence that they need, realise their ambitions, promote the concept of community wealth building at a local level and work with the UK Government to try to make sure that there is a coherence to the way in which the Scottish Government and UK Government view the regions of Scotland and support work at that level. I think that that is a really important part of that overall coherence argument that you have been making. Are you confident that we have the tools and the structures in place to do that? I am hopeful. Thank you. I just want to bring in Jamie Halcro Johnston, a referring back to Colin Smith's question about co-operatives. There is no target for co-operatives. There is a target for 500 employee-owned businesses in Scotland by 2030, so the cabinet secretary might not know the progress update on that this morning, but it might be something that he could write to the committee about. I am happy to do that. I will bring in Jamie Halcro Johnston to be followed by Fiona Hyslop. I will let members know that we need to finish by 25 past 10. I have a couple of subjects that I wanted to cover. The first was to follow up to Graham Simpson's questions. You will be aware of the issues around the relationship with the Scottish Government and the GFG Alliance and Sanjif Gupta. Have you met Sanjif Gupta yet or have you planned to? I have not met Mr Gupta. I do not have current plans to do so. Can you explain what the level of regular engagement between the Scottish Government and the GFG Alliance is? It is regular to Mr Johnson's question back at him. It is regular and strong engagement with the smelter to ensure that the business there continues to do well and that the requirements on GFG are realised and that the developments off the back of that are also realised. There is regular and strong engagement. Mr Cooke leads on that area and there is a very strong team that ensures that the investments in Lochaber continue to go well. You say that investments go well, but a lot of jobs were promised when the deal was signed. Do you have any concerns that those projected jobs are not going to be met? I think that it was into the hundreds, but maybe only 50 have been delivered so far. There are on-going investment decisions to be taken there that would see job creation, but I will take Mr Cooke in at this stage so that he can provide more detail for you. You are correct, Mr Johnson, that the investment has not yet been made. The GFG Alliance is still planning on making an investment in a billet plant within that region. Money is being allocated to that investment. All the money has not been yet allocated to that investment, but we are making progress. We have seen the start of the planning phase for that investment, so we are hopeful that it will continue. It is one of the things we discuss regularly with the local management, where our main focus has been, around the plant, around the performance of the smelter and the performance of the hydro, but also when we get access at ministerial and official levels to the GFG Alliance more generally. I think that it is important to stress that the guarantee is income generating for the Scottish Government. The Alliance is up to date with its fee payments to date, and we will continue to make sure that that is the case going forward on the investment decisions that Mr Cooke provided more detail on. I thank the cabinet secretary for that. In terms of the liability, in 2019, it was some—I am trying to remember the figure—about £570 million. Do you know what the current liability is? That will decrease. Do you know what the current liability is? It has decreased substantially. I would be happy to give—I have a rough figure in my head, but I do not want to give an incorrect figure to the committee. I will make sure that that is followed up in writing for Mr Johnson's inquiry to be satisfied. That would be great, and that would be very helpful. Do you have no concerns at the moment that there is any likelihood that there will be payments to GFG or that you are anticipating having to make any payments to GFG at the moment? There is nothing anticipated, no. The progress is good. As I say, it is currently an income generating asset for the Scottish Government, and we will obviously keep a close eye, a close monitoring on the situation there to ensure that our investment continues to be strong and the commitments around the likes of the billet factory and others are met. I can just move to another vital area. We know that there is huge pressure on our tourism and hospitality sectors. I am sure that, cabinet secretary, you will have had plenty of representations from the sector over the pressures that they are facing at the moment. You will have seen some of the gaps in high streets. You will have seen some of the real good issues faced. A number of businesses—certainly eligible businesses in England—are receiving 75 per cent discount for this year. That money was available through Barnett consequentials. Has there been any consideration or reconsideration about introducing a similar discount in Scotland? We have made significant investments to support business through and post Covid, over £500 million beyond the support that we received from the UK Government to do so. We have the most competitive poundage in terms of non-domestic rates in the UK. We have also the most competitive small business bonus scheme in the UK. We continue to provide business support where we can. Obviously, Mr Johnson is right that I and my colleague Mr Lockhead engage regularly with the hospitality and tourism sector, and we will continue to do so. It is a vital component of Scotland's economy. We spoke earlier about regional economic performance and place-based policy-making, so we understand the importance of tourism and hospitality and continue to engage them with them on the asks that come forward. A number of the asks will be about funding support, but a large part of that will also be about regulations. Obviously, we have seen a number of policies that impact within the sector or in communities that are in. We have seen DRS being mentioned already today and some of the uncertainty around that and the cost involved around that. The short-term licensing has been an area that has other concerns around tourism level. Even as wide as HPMAs in rural communities such as the ones that you and I are from, it is a real concern as a wider investment money is coming in. When you are looking at those asks for them, what consideration are you giving to some of the policies that the Scottish Government has been pursuing over the past few years and whether some of those can be reconsidered, as has already been done in some cases? There is a panel that meets business to consider regulation and I have already set out the new deal for business that is going to be discussed over the coming months. We are looking at all of those areas to see if there is anything more that we can do. We can consider how we can provide greater support. We have obviously listened to business in terms of the delay to DRS and we will continue to respond as best we can. However, one of the issues that Mr Johnson raises there around short-term lets is clearly a competing issue. He and I both know the challenges that there are in terms of access to rural housing for people living in rural areas. There is a support for us looking to do what we can to make more rural housing available. The decisions that we are taking are about trying to make those situations easier for people. It is always going to be a balance. Obviously, we take feedback from colleagues who represent rural areas or indeed are from rural areas and have families still in rural areas, such as myself, to ensure that we continue to get that balance right. Obviously, I take the feedback that Mr Johnson has given seriously and will continue to consider as best we can going forward. Just very quickly on that point about rural housing, if I could just ask us. The Scottish Government is just a very quick question. I do want to bring Ms Hislop in before the end and we do have to move on as we have the UK Government Minister coming in. I am happy to take the question and then, even if it is responding in writing, I would be happy to do that. That is fine. If you would like to put the question in, we will get it. That is great. Thanks, convener. It was really just on that rural housing and island housing question. Obviously, the Scottish Government's scheme for that was extended and has not been fully utilised, only half of that. It was really just an assurance that he will review that scheme and how it can be more attractive and more easy to use. At the moment, clearly it is not meeting the needs that it should be. I am happy to do so and ensure that I fall up and right into the committee. Thank you very much. I very much welcome bringing the economy and the energy portfolios together. The energy strategy consultation on the draft closed yesterday. When do you expect to respond to that and publish the actual energy strategy and the just transition plan? I thank Ms Hislop for that question. We have received incredible interest from that consultation. I believe that, at last count, there were over 1,400 responses to that, which is almost seven times the last time we consulted on an energy strategy. There is clear interest in it. We need to make sure that we give that proper consideration, but we will be looking to publish our final strategy as quickly as we can off the back of considering those consultation responses. The draft was very much welcomed by the renewables industry. It was very much focused on electricity. Criticism was that it was so broad that it was capturing everything that had been on to date. If previously the strategy had been about the generation of energy, surely we should be in a position that we should be looking about what that means going forward in terms of the delivery. It talks a lot about potential, but can you give us reassurance that the final strategy will be about delivery on that potential as opposed to description of the potential? Yes, I absolutely take that suggestion from Ms Hislop and make sure that it is given due consideration as we consider the consultation responses, which I can't pre-empt obviously, but I would expect to go into some of the areas that she has laid out there, but ensure that we have a concrete strategy that ensures that we are able to realise the potential that we have, but also ensure that we have a just transition that does not leave communities behind in the same way that they were in the 80s and 90s under Thatcher. What we have heard in our inquiry into just transition is a potential gap, particularly for the supply chain in terms of jobs and skills, where the actual realisation of the contracts may not be for some time. We might not be able to scale up in time, so therefore the issue might be when the demand is there, it may have to be met internationally, so there is a gap funding issue in the skills and jobs on the supply chain. How do you think that that can be realised? We are working on that now with the investments that we are making in the skills passport to ensure that we are looking to offer opportunities for those who are currently working on oil and gas sector to transition. Obviously, that is going to be an on-going process, but we will maintain a focus on ensuring that we are giving as many opportunities as possible to our indigenous workforce. We are also making sure that we put the pressure on the UK Government to ensure that our international labour force that we have to accept will need to play a part in some areas is able to do so. Skills passports won't necessarily address the technology issues for companies, so I would maybe leave that there that that needs to be looked at. Finally, we've heard about the need for billions and pounds of investment to realise net zero goals. Can you say how fundamental you think the carbon capture utilisation storage aconcluster is for the just transition, not just for the north-east, but as we've heard from Grangemouth, with £1 billion from Ineos sitting on the table ready to move for the biggest industrial cluster in emissions that we have in Scotland, what is your view on that? It is absolutely fundamental that Grangemouth produces 8 per cent of our carbon emissions, as Ms Hyslop rightly outlines our greatest emitter. Making sure that there is a just transition ensures means that we need to see the UK Government move much faster on seeing acorn delivered from track 2, and it is an absolute priority for us to continue pressing the UK Government for that. I am sure that that is something that will come up in the discussions with Mr Stewart following my appearance today. I thank the cabinet secretary and his officials for the evidence this morning. I will now briefly move into suspension while we change our witnesses. Our third item of business this morning is an additional evidence session for the committee's inquiry into a just transition for the Grangemouth area. I welcome Graham Stewart, who is the Minister for Energy, Security and Net Zero from the UK Government. He is joined by Catherine Asherwall, who is head of track 2 team, CCUS, and Jonathan Haw, deputy director, Clean Growth Directorate. As always, if members and witnesses can keep their contributions as concise and focused as possible, that would be helpful. I invite the minister to make a short opening statement. Thank you very much, convener, and to members of the committee for inviting me and, indeed, my officials to join you this morning to talk about our net zero ambitions and our powering up Great Britain announcements within the context of your inquiry into the decarbonisation and just transition of the Grangemouth area. The UK Government continues to engage positively with Scotland and the other devolved administrations across various policy priorities to support energy security and net zero. I know that you are fully aware of issues around carbon capture usage and storage, hydrogen, nuclear, floating offshore wind, and, of course, the UK emissions trading scheme in which we are all equal partners. I am grateful for the engagement and look forward to it continuing. For too long, this country has taken cheap plentiful energy for granted, but Putin's illegal war in Ukraine and decades of other reliance on fossil fuels from abroad, despite the UK having very little exposure to Russian gas, have combined to push up energy prices. That is why the UK Government stepped in this winter to pay around half of the typical household energy bill and why support has now been extended for domestic and business consumers alike. Our longer-term challenge and opportunity is to bolster our energy resilience as a nation, so a tyrant like Putin can never again hit the pockets of every family and business in Britain. We think that the path is clear. We must diversify our sources of supply, decarbonise and move towards greater energy independence so that we have cheap, clean energy that Britain needs to prosper in future. That is why in March of this year we published a suite of documents under the powering-up Britain banner, including our net-zero growth plan. We believe that our transition to a green and sustainable future will provide new opportunities. As Chris Skidmore said following his review, it is probably the greatest opportunity that Britain has at the moment to grow and level up the UK economy and support hundreds of thousands of green high-skill jobs whilst ensuring that the environment is also in a better state for the next generation. The policies and ambitions that we set out will help to leverage around £100 billion of private investment as we develop new industries and innovative low-carbon technologies with ambitions to support up to around half a million jobs by 2030. The UK has already, of course, made tremendous progress in decarbonising its economy and decoupling emissions from economic growth. Between 1990 and 2021, we cut our emissions by 48 per cent, while nonetheless growing the economy by 65 per cent. We truly are the world leader among major economies, and the path to net-zero outlined in the net-zero strategy is, we believe, still the right one. In the net-zero growth plan, our update, we are bolstering our delivery further. The proposals and policies that we have set out reach far into the future, setting out plans to the end of carbon budget 6 in 2037. That means that the current package represents one of a series of steps to full decarbonisation of the economy by 2050. Given our success in decarbonisation to date, we are confident in our approach, but this plan does not intend to predict the exact shape of the British economy in 2037 or later, and neither should it. In conclusion, Prime Minister's decision to create the department for energy security and net-zero was a clear statement of intent that the UK Government is prioritising these two important issues. In our comprehensive power and up-britannu announcements published just 50 days after the establishment of that new department, we have demonstrated that we are driving real progress to deliver energy security, net-zero, lower energy costs in the long term, so that we have among the most competitive electricity prices in Europe by 2035 and secure economic benefits that will be felt throughout the whole of the UK. For this inquiry, the committee is particularly focusing on the Grangemouth area. As you will know, NAAS is based in Grangemouth. It is described as the biggest polluter in Scotland. Its emissions are larger than any other site and company that we have based in Scotland. If the UK Government is serious about cutting emissions, it will recognise the importance of taking action at NAAS in the Grangemouth area. As you know, the Scottish Government is working on a draft just transition plan for the Grangemouth area. Can I ask what discussions you are having with the Scottish Government around the plan and what, in particular, from the measures that you have outlined, are relevant to the Grangemouth area that you think will assist in delivering a just transition for Grangemouth? Thank you for your question. There are a number of components in the net-zero journey. The decarbonisation of the electricity supply by 2035 is an ambition, but we have land use and agri issues to deal with to minimise and move to net-zero there. We have transport to deal with. We also have—this is most particularly relevant to Grangemouth—to decarbonise industry. That is why, as set out in the Parangup Britain documents, we are moving forward with intent on two technologies that are absolutely fundamental to delivering that decarbonisation of industry, particularly the hard to decarbonise. In addition to increasing electrification and the greening of our electricity supply, carbon capture, usage and storage, that is why we move forward with track 1, the east coast cluster and the high net project in the north west of England. We highlighted that we were launching track 2 and we said that the Acorn project and the Scottish cluster and indeed the Viking store off Lincolnshire were in pole position because they are the most advanced, but we opened that up so that we could have expressions of interest in being included in track 2. We also said that we would look for extensions of track 1. If we are going to decarbonise industry and industrial areas, whether it is in the Humber, the north west of England, Scotland or Wales, we are going to need carbon capture, usage and storage. Hydrogen is the other technology initially. Perhaps blue hydrogen, we have set out ambitions for 10 gigawatts of hydrogen by 2030, at least half should be green hydrogen, which is electrolytic hydrogen. We made announcements on that front as well with various awards in Scotland. It is a really exciting opportunity for Scotland as we roll these technologies out. If we can lead the world as we have in cutting emissions and developing genuine net zero industrial clusters, then not only is that big business in its own right, but it will unlock the reindustrialisation and massive inward investment into those areas, given the ESG and other environmental obligations that companies have entered into. I really do see that the UK has an opportunity in Scotland in particular, and perhaps in the Grangemouth area in particular has a huge opportunity to unlock development, not just in energy, but more broadly if we get it right. Good morning minister. You touched on the issue of carbon capture and the committee has heard how vital the Scottish cluster carbon capture project is to supporting the transition of Scotland's industries, especially around the central belt of Scotland. You said that the ACON project is one of two in pole position in the track two process, but we have had few details of what that actually means at a time any us have said they are committed to investing £1 billion to decarbonise Grangemouth and support the cluster. Minister, can you tell us more about the track two process? Will the planned update in the summer set out once and for all whether the UK Government is committed to ensuring that the ACON project is taking forward? We are grateful to the Scottish cluster for its continued engagement and, as I just said and you reflected in your remarks, we have recognised the maturity of the proposals. We have stated our view that, based on engagement to date and the track one process, ACON meets the track two eligibility criteria and does not need to submit an expression of interest. My colleague Lord Calanan, who is the minister responsible for CCUS, has previously engaged with the ACON cluster, including speaking at the recent ACON reception in Parliament. At the working level, there has been a regular dialogue with the Scottish Government and we are always happy to facilitate further engagement if, thoughtful, we are working to deliver the track two process as quickly as possible, ensuring that we learn the lessons of track one, whilst also ensuring competitive tension and value for money. However, as you will be aware, there are risks associated with all infrastructure projects and the Scottish cluster is still working through questions, allowing all eligible transport and storage systems an opportunity to express an interest in the track two process, is in line with our objectives of ensuring that track two optimises delivery and represents value for money. There is a lot of work going on beneath the surface. I am pleased to say that I think that the Government has invested around £40 million into ACON to date. As you will be aware, if we are going to meet our legal obligations to deliver net zero, we need to move at pace and we need to decarbonise not just major clusters, such as the Scottish cluster, but industry right across the country. We need to move at pace with seeking to do so, and I think that there is a very positive future for ACON at MCC-US. We need to move at pace, but the ACON project has been under development for more than a decade. I am sure that you appreciate the considerable frustration from potential developers. Why has there been such a lack of progress in supporting that project? Back to my first question, will we get a clear announcement in the summer whether or not the UK Government supports taking forward the ACON project? As I said, we are moving as quickly as possible through due diligence on that. That is why I am not trying to be deliberately evasive, but I am trying to avoid giving you a definite date if we might not be able to deliver it. That work is under way and we are moving at speed, and I hope that it will be sooner rather than later. I am afraid that that is the best I think that I can give you today, unless officials scribble me something else, but I do not think that they are going to because we are moving at speed. If I give you a date, we miss it, and that is unhelpful all around. I will give the officials more time to scribble, if you wish, minister. Do you accept, minister, that without the ACON project we will not decarbonise Grangemouth and we will not have a just transition in that area? As I have said, we need to decarbonise all of our industries across the UK. We are seeking to move them in a methodical manner. As you will be aware around the world, other people are looking at this, and it is a tough challenge to get it right, but we are blessed with industrial geographies coupled with the geology that makes it possible for us to lead the world in developing those technologies. If we cannot decarbonise Grangemouth, we are not going to be able to deliver on the zero targets that are set in law in both Scotland and the United Kingdom. Do you accept that we cannot decarbonise Grangemouth on the scale that is required without the ACON project? I do not have any alternative ideas to do that, so we have to have a project to do that. ACON, as the Government has set out, is in pole position, has met the track 2 criteria and further announcements that were made in due course. I do not think that I can give you any more than that. We have to do it. ACON is in pole position. It has met the criteria, it is looking pretty good, is it not? I hope so, minister. Thank you. Gordon MacDonald might try to get more than that, but I will take Gordon and then follow by Fiona Hyslop. On 27 April, Andrew Bowie, the Parliamentary Undersecretary of State for Energy, Security and Net Zero, told our NZ committee that he would be overwhelmingly delighted should ACON be successful through the track 2 process. He also said that it is vital to Scotland's 2045 net zero ambition that we get more carbon capture and storage on-stream across the whole of the United Kingdom. Do you agree? Yes. If you agree, why is it that we are still seeing delays to funding of the project? It is inexplicable to many observers that ACON was excluded from track 1 status. I know that you have responded to questions on this from Colin Smith, but are you able to add more detail about why it is considered secondary to those clusters selected by the UK Government to receive track 1 status? ACON has met the eligibility criteria for the track 1 process and performed to a good standard against the evaluation criteria, but during the competitive and rigorous application and evaluation process, the high net and east coast clusters were selected as the track 1 clusters. The sequencing decision was made following a robust specialist-led assessment and was not subject to political intervention at any stage. Ensuring that the result reflected this assessment was crucial in upholding key principles of transparency and value for money. We have a dispassionate framework, as we possibly can, to ensure that we do this in the right way. As we deliver this and get it out there, we will cover the whole country in due course, but we are moving in a methodical manner doing this in a scale in a way that has never been done in the world before. That is why we are doing it in this fashion and that is why I think that it is the right way that we do it on this layered manner, with competition on a fair basis and mutually determined outcomes in place. That is why ACON, which did very well, has made the reserve, of course, but did not make it on competitive and dispassionate grounds into track 1. You just mentioned a couple of times the East Coast cluster. That was announced for track 1 funding from November 2021. In recent weeks, we have had the national grid with drawing, we have had Shell with drawing as well, who indicated that they would focus on the ACON project in Scotland, and Drax has recently paused its investment into the project as well. What does that do about the viability of the East Coast project? Does that give you an opportunity to review funding and bring ACON further closer to getting UK Government funding? Are CCUS targets remain on track, as does the delivery of the East Coast cluster, with the world-leading capabilities of BP, Equinor and total energies driving the project through the Northern Endurance Partnership? As Shell has made clear, it is committed to the technology with a focus on other projects in the UK, and the Government will continue to work with the industry on our ambition for four industrial clusters and CCS clusters by 2030. As I have said, ACON remains the reserve cluster for track 1. Naming a reserve cluster allows the Government to retain the option of elevating the Scottish cluster into track 1 in place of either high net or the East Coast cluster in the event of material barriers to delivery arising. When would that first opportunity come around for review to take place in possible elevation? In the event of material barriers to delivery arising, Mr MacDonald. Given that you have had three major players either withdraw from the East Coast project or pause investment, does that not cause you to review the East Coast project? We are confident that the East Coast cluster is progressing right now. If that were to change in light of the circumstances that you referred to or others, we would be in a position to review it. However, at the moment, we are confident that it is on track. I very much appreciate you joining us today, minister. The issue around the ACON cluster is critical yes to Grainsworth, which is the subject of our inquiry, but also to a just transition in the north of Scotland. You refer to maturity and infrastructure as being key in terms of decision making. That is the most mature and the most developed and using existing infrastructure in terms of a project. You make the argument that we cannot decarbonise Grainsworth without having the ACON project. If we do not decarbonise Grainsworth, we will not meet our net zero targets. The third leg of that is that the Climate Change Committee has said that the UK and Scotland will not meet our net zero targets unless we have CCUS. That all leads to one place. The issue then is the timescale for that. Clearly, you said that by 2030, for Scotland to meet our targets, we need to start sooner than that. Will you be cognisant of the timing of that in talking to your colleague Lord Callaghan on any final decision? I did not quite understand the question and the apologies. The issues around net zero targets for the UK talked about 2030. For Scotland to meet its targets, we will need to start on our carbon capture utilisation storage journey sooner than that. Therefore, if the imperative and the logic of your own arguments is such that the ACON project is well placed, will he, in his discussions with Lord Callaghan, who understands the lead minister and emphasises that the timescale of that is critical to Scotland, probably more so than the rest of the UK, although it is critical to the UK? The Scottish Government makes its own determinations of targets. I know that the Committee on Climate Change has a remark on the pathway that Scotland is on towards those and has a remark specifically on the 2030 target and how realistic that is, but I will leave that to the Scottish Government to worry about. We are delivering the UK Government's policies in order to deliver net zero by 2050. Given that we set the national framework, it would be sensible for areas of the country, including the all-government in Scotland, to ensure that their policies were compatible with ours and perhaps rather than the other way round. In terms of your responsibilities as UK, you are responsible for all of the United Kingdom. On energy policy, the UK Government has a key power in relation to carbon capture utilisation and storage. Is that the case? Indeed. We have set out a strategy to have four clusters by 2030, whether that fits with the Scottish Government's targets or not is a matter for the Scottish Government to deal with. We are quite clear on doing it and we do it while listening closely to the independent committee on climate change and making sure that we deliver what is. We are leading the world in this and there is a danger of coming up with impractical targets that cannot be met. What we have got to do is work in a coherent manner, which we do everything possible to do and engage with Scottish and other devolved Governments to make sure that we are working in an aligned manner. However, there is a tremendous opportunity here to not only protect the jobs that we have got but to create the foundation for a much more successful Grangemouth area in the future. If we get it right, we are going to continue to implement our policies as set out in successive policy statements from the UK Government. I refer the minister to a report produced by the Scottish Parliament's Net Zero Energy and Transport Committee last year on carbon capture utilisation and storage. It had cross-party support and perhaps set out the case in a stronger place than we perhaps have time to do today. I move on now to the wider hydrogen economy. Clearly Scotland and the UK have significant ambitions. What we have heard is that in order to advance on the broader hydrogen economy, we will need further work on developing credible business cases to help to draw in that private investment that you talked about and to bring the various technologies that are required to market. What is your view of what can be done and what is the UK doing to support the technology on hydrogen to reach maturity and to attract that significant investment that is needed? Is that an element of risk? I suppose that it is what the UK is prepared to do to help to move that market on. We have just published a list of successful applicants for strands 1 and 2 of the Net Zero hydrogen fund, and that will support the development and deployment of new low-carbon hydrogen production exactly as you suggest. That announcement confirms the first project to be offered grant funding through the NZHF for a total of £37.9 million for 15 new hydrogen production projects across England, Scotland, Wales and Northern Ireland. I think that four of those are in Scotland. We intend to launch a second competition round for strands 1 and 2 of the NZHF in spring, which will be delivered by UKRI. The second competition round will support the development of a diverse and secure hydrogen economy fit for meeting the UK's ambition, which I will be mentioning of up to 10 gigawatts of low-carbon hydrogen production by 2030. In addition to that, five Scottish companies have been shortlisted to proceed to the next stage of the process for the first electrolytic hydrogen allocation round, which I will say on my departments, particularly about naming things. To kickstart the low-carbon hydrogen economy across the UK and meet our wider Net Zero targets, those are ERM Dolphin with a Y, Pearlblue.energy, SSE renewables, RES, Octopus Green Hydrogen and Scottish Power. In addition to the NZHF Net Zero hydrogen fund, we have also got this hydrogen and electrolytic hydrogen allocation round. Scotland is playing a full part in both parts of that. If I pick one, random Octopus Energy's Lanarkshire green hydrogen project plans to deploy 15 megawatts of electrolysis directly connected to an onshore wind farm with the aim of producing over 3.5 tonnes per day of green hydrogen. When I was at the European Marine Energy Centre in Orkney not long ago, I was delighted to see that they were on the first producers of green hydrogen up there, and I think it powered the first sustainable aviation fuel RAF flight. They were telling me when I was there. Sorry, you had frozen for a second. Finally for me, the opportunity for green hydrogen is considerable, not least because of the extensive renewable energy that can be released from Scotland, etc. You talked about energy security, which is not just for the UK, but more widely in Europe. We have been told by industry that export of green hydrogen has real opportunity. How seriously is the UK Government taking the opportunity for exporting of green hydrogen to meet the demands of our colleagues in Europe? Great question. The UK's primary ambition is for 10 gigawatts of low-carbon hydrogen production capacity by 2030 so as to decarbonise UK sectors and contribute to our legally binding carbon budget. That is the top of our hierarchy. This increased ambition, as set out in the British energy security strategy, also opens up the opportunity for exports. If you look at a map of Europe and look around the British Isles, we have a remarkable and special opportunity, capturing all that wind power. Of course, we are not only world leaders in fixed bed offshore wind, but we are developing floating offshore wind, which is an enormous global potential as well. If we capture all that and we can do it in a way that is economically sensible as well, then not only will we deliver among the lowest cost electricity systems in Europe by 2035, which is a rain but, as you are right, we are harnessing all that. If we can then take an example of what has gone on in Orkney and elsewhere, we can convert it into highly competitive green hydrogen. We will not only decarbonise our own industry and act as a trigger additional investment into the UK, including Scotland, but it also puts on in place the potential that we could be. I do not know about you, but I can imagine a future in which we might have pipelines going into Europe. We have interconnectors now of gas and electric. It makes us both sides more resilient as a result of that. We could potentially, in the future, have CO2 pipelines bringing in CO2 one way for us to store. After all, we have 78 gigatons of capacity of carbon storage in the North Sea. It has given us wealth when we emptied a lot of those wells of oil and gas. That would be fantastic to get further value by then storing carbon as a result, and we could have hydrogen flowing in the other direction. I share your enthusiasm. If we get this right, we can create a foundation of economic prosperity in the 2030s and beyond so that we can leave the world in tackling the environmental challenge, but if we get it right, we could also come out as more economically competitive and a richer nation with better jobs and greater energy security. That is the golden prize that we are after. Scotland has an outsized role to play in delivering that. We want to make sure that it is done in a way that hydrogen, again, offers a way of not just producing energy in Scotland but of converting it in Scotland, of having industrial jobs in Scotland and of making sure that Scotland benefits from its quite unique position and ability to generate energy and contribute not only to UK energy security but to Europe's. Thank you very much for setting out Scotland's strengths in our energy now and in the future. I agree on Simpson to be followed by Maggie Chapman. Thank you very much, convener. Good morning minister. I'm going to ask you about sustainable aviation fuel now. We're dealt with hydrogen, so we'll move on to SAF. The UK Government produced a jet zero strategy in July last year, and you said that by 2025, so that's just three years away, you would have at least five UK SAF plants under construction and a SAF mandate in place with a target of at least 10 per cent SAF by 2030. Of course, the relevance of this for us is that we would want Grangemouth to be one of those plants. Can you tell me what you're doing to ensure that you get those five plants in place? Thank you, Mr Simpson, for your question. As you said in July last year, we made a commitment in the jet zero strategy to make the UK a world leader in the development, production and use of sustainable aviation fuel. Since then, we've made excellent progress. We've announced recently a series of big steps forward, so we've published our second SAF mandate consultation, providing a strong incentive to use SAF and offering price support for it. We've launched the second application window of the advanced fuels fund, making a further £56 million available to support UK SAF projects through to construction. To accelerate novel SAF production pathways to market, we're also setting up a UK clearinghouse to support testing and certification. We've announced the University of Sheffield as the delivery partner for that. In parallel to those steps, the Government has been considering what longer-term actions, in addition to the SAF mandate and the grant funding for SAF plants, might need to be taken to stimulate SAF investment in the UK. In October last year, we commissioned Philip New to lead an independent evaluation into developing our UK SAF industry so that he could identify the conditions necessary to create successful UK SAF industry and recommendations to support it. We published his report alongside our Government response, and it sets out how we're already taking actions to address many of his recommendations. Amongst those are, for instance, working with industry on stabilising the UK feedstock market for low-carbon fuels. Our response recognises that revenue certainty remains a barrier to investment and commits to working with industry on options to overcome that particular barrier so that those become investable. While noting the leading role industry can play, we have committed to work on options to provide additional revenue certainty in order to deliver that investment that is needed. If required, following that work, we will launch a formal consultation this summer. There will be a consultation this summer, but you want to be in a position in three years' time that you have five SAF plants under construction. It sounds like we're nowhere near that at the moment. Is that correct? The UK SAF programme is one of the most comprehensive in the world, with, as you say, a highly ambitious mandate for 2025 that provides a long-term signal that now is the time to invest. We've made that £165 million available from the advanced fuels fund in order to help deliver those five plants to have them under construction. Anyway, in the UK by 2025, we're helping to establish a UK clearinghouse that will support the testing and certification of innovative fuels. Together with the SAF mandate, which of course drives an awful lot of this, we have measures that both support the supply and create the demand for SAF. We're confident that this framework of measures puts the UK in a leading position to reduce aviation emissions and start a UK SAF industry. However, we recognise that there are calls to go even further to build a long-term supply industry in the UK, but we're working in partnership with industry and investors to determine what further actions industry or government might be able to take. You basically just repeated your first answer, but the question was, you have set the target of having these five plants under construction within three years. From what I'm hearing, yes, you're doing some stuff, but we're not at the point in that timescale of getting any of those plants under construction. Is my analysis correct? There aren't any under construction as far as I'm aware right now. As you rightly say, Mr Simpson, it's a challenging calendar to get that done, but we are working flat out to make it happen. Of course, carbon capture has a part to play in SAF production, and getting that in place, we have a lot of moving parts in order to make sure that that can be delivered and we're interested in doing so. The sustainable aviation fuel is a Department of Transport's elite. We can certainly get some more detail on the level of progress against that five, but the £165 million advanced fuels fund that the minister has already mentioned is the key thing that is supporting plans going through development. It is a market. It is a work and government stimulate, work and government provide grant support and work and government provide the market certainty that enables investors to make the decisions in those things. It's not HMG staff plans that we're putting in place. I think that there's quite a lot of support that's going into SAF and a lot of progress that's been made this year on it. It's market certainty that we need. One final question, minister. You've spoken about, you see the importance of Grangemouth as we do. Have you visited Grangemouth yet? If not, do you plan to? I haven't visited yet, but I do plan to, yes. I haven't got it in my gallery as yet, but Grangemouth is clearly a very important plant. I have specific responsibility not only for renewables, but for oil and gas, and Grangemouth is very important going forward. Maggie Chapman, to be followed by Michelle Thomson. Thanks very much and thank you to the minister for being with us and for what you've said so far. We've already had some discussion about the different timescales and the pace of change that is required. It's quite clear that the transition is taking place globally at quite a fast pace. There's competition for skills, for labour and for finance and investment. We also know that the United States and the European Union have announced significant investments in renewable energy. You've outlined already that this is a key sector for Scotland and, indeed, the wider UK economy. How can we ensure that projects and companies in Scotland and workers in Scotland benefit from the investment that should be available? How can we ensure that we are best able to compete and have access to equivalent financial incentives, particularly for renewables? We've made tremendous progress, as I've already said. We've decarbonised more than any other major economy in the world. The cross-party consensus on the need for action and the ability to convert that into action has been a significant feature of Conservative-led Governments since 2010. You'll be aware that just 7 per cent of our electricity in 2010 came from renewables, and now it's over 40 per cent and heading up towards 50 and beyond. We have set up from the contrast for difference, which has now been widely copied, but it's an extremely successful system. It's helped to bring scale to things like offshore wind, which the viability of the economics of which was not obvious when we went out into the North Sea and yet we went from what was £120 megawatt hour in the first auction as a guaranteed revenue requirement to build in 2015 to just 39.50 in 2019, two auctions later. We shouldn't be complacent because of prior success and we're looking at issues like non-financial criteria. I'm working closely with industry on how we create the incentives in a way that meets our international obligations but to strengthen the UK supply chain. We've built an enormous amount of business and prosperity in the UK supporting our renewables development, but I would like us to have done better and going forward, not only for fixed bed and floating offshore wind but for CCUS hydrogen. I really want to make sure that we, as you suggest, sweat how we create the frameworks, which make it more likely that there will be sustainable long-term jobs in Scotland and the rest of the United Kingdom built around our world leadership. You mentioned the competitive environment. On the one hand, we have commented that the Inflation Reduction Act in the US, which is by American facets, is unwelcome in that particular way. However, to have the United States investing heavily in renewables and green technologies is tremendous. I think that it will help to drive down costs. I am confident that, notwithstanding the issues such as CCUS hydrogen and renewables, they should offer an opportunity for us to be able to deliver the kind of low-cost system that we want. We've got great competition because the rest of the world is playing catch-up with us as we've led the world in cutting emissions, but I think that our frameworks in renewables and carbon capture and hydrogen are pretty strong. We are still seen as world leaders and we have moved now to annual auctions for the first time this year from bi-annual ones previously for the contracts for difference. We will see how that goes. We have been tremendously successful in the past in getting investment, and I am pretty confident that we will continue to be successful going forward. We have new technologies as well, such as Tidal, where the world leader, AR4, which was our CFD round last year, had the first time we had Tidal included in that. We have retained a specific pop for that this year. Having visited what I was in, I saw O2—or orbitals—Tidal energy production unit, and around 80 per cent of the supply of that is coming from the UK. I am determined to do everything that I can, including through the development of non-financial criteria in partnership with industry to increase and strengthen the UK supply chain, and that will have a big impact in Scotland. I appreciate what you said about us having achieved significant changes in recent years. We know from the IPCC report that the pace of change that we need to achieve in the coming 15-20 years is even greater than the pace of change that we have seen to date, given the climate emergency that we are facing. One of my questions about the investment that you say that you are certain that we can continue to attract is that your intention, or is it the UK Government's intention to ensure that that investment has conditions attached to it in how it is delivered in Scotland? We have heard from people in and around Grangemouth that previous energy transitions have not been as just as they might be and that they have been widening inequalities as a consequence of that. We see that elsewhere in Scotland as well. How is it that you intend to ensure that the investments that we get drive a just transition and do not create or enable the development of two or multiple-speed economies such that we have seen in the north-east of Scotland? Before I invite you to respond, I understand that you have to leave by half past 11. I have two members who wish to ask questions. I am going to allow Michelle Thompson to ask her question on the back of Maggie Chapman as I believe that they are connected. If you address both their questions, then I am hoping to bring Jamie Halcro Johnston in before you have to leave. Good morning. I think that they are somewhat loosely connected, but I hope that you will be able to pick up Ms Chapman's question. I wanted to probe a wee bit about the capital requirements. We know that, globally, hundreds of trillions of dollars are required in terms of investment to meet what we need to do. My colleague Gordon MacDonald touched earlier on the withdrawal of National Grid and Shell from the east coast cluster. That will have been noted by international investors and a view reached whether that was about competence or other reasons, but that will have influenced some of their appetite for investment. In general terms, what specific risks do you have in your risk register for attracting international investors into funding? What are the sort of risks that you have and that you are therefore seeking to mitigate to get to the scale that we need? Thank you. I am dealing with both those questions on a just transition front. Before I went to Wartney, I went to Port Nigg, and I also went to Aberdeen. What I saw there was that the support businesses, practically all the ones that I talked about, were working in both oil and gas and renewables, because the sub-sea skills, the fabrication, the engineering and the rest of it are all allied. It is so important that we recognise that we are in a transition. I do find it unhelpful. The Scottish Government appears to be so opposed to managing what is a naturally declining basin in the North Sea. Over time, we expect that the amount of businesses that some of the businesses, including the ones that I met, have from renewables will grow and the oil and gas business will reduce, but it is so important that we do not seek to abandon North Sea oil and gas. We will not have that just transition. Worse than that, we will end up importing LNG, additional LNG, which has two and a half times the production emissions of Scottish-produced gas, which is why oil and gas production is falling at about 9 per cent a year. With new licenses, we can arrest that perhaps to 7 per cent, but it is falling faster than our demand reductions. However, we have to recognise that oil, gas and renewables now are one supply chain in Scotland. If you want to have a just transition and you do not play to the gallery, you recognise that producing power in Britain for Britain, oil and gas in the transition while we ramp up renewables is one way of delivering that. On Tomson's question about capital requirements and what is on my risk register, it is stability, certainty and continuity, as well as being open to innovation. I think that the key things that I would say are qualities that we should have. Of course, the climate act from 2008, which we amended in 2019 from 80 per cent up to net zero, gives that legal certainty. My Secretary of State is legally obliged to ensure that we are on track to deliver net zero. We are in a not quite a unique situation, but we are the first major economy to legislate in that way. The independent climate change committee, the five-year carbon budgets, creates a certainty that we are legally obliged to go in that direction. The cross-party consensus that supports that helps to give confidence to investors, as well as the fact that we have always been. I used to be the investment minister. I would say that we are possibly the most investable country in the world because of our stability, the rule of law and people know that it does not matter where they are from, they will be treated fairly by our system. That combination of solid regulatory and legal systems coupled with legal statutory certainty about the direction of travel is how we have been able to attract so much investment so far and why I am confident. I do not think that I ever said certain, but confident that we will be able to continue to do so in the future. Thank you very much for that. You certainly set out what you see as some opportunities, but my specific question was about risks. Can you give me more flavour? Given the significant international competition for funding that is required, can you set out more detail as to what you see the risks that external investors see in investing in the UK at the scale that is required and what mitigations you are putting in place? One of the risks would be a refusal to grant any new licences in the North Sea for oil and gas. We are talking about investing in renewables on this specifically. Exactly. I have said that oil, gas and renewables are now in terms of supply chains tend to completely overlap. In order to deliver the transformation at Grangemouth, to deliver CCUS, to deliver hydrogen, what do you need? You need the engineering, you need the balance sheet, you need the supply chain of existing oil and gas companies. One of the big risks to the transition is the removal of support for on-going development and production of oil and gas in the North Sea. It might sound ironic, but you ask me what is on my risk register, and that is right up there. Otherwise, in terms of the risks, there is competition, but I think that we welcome that. My experience previously as the investment minister and now as the energy security and net zero minister is that there is an enormous appetite to invest in the UK. One of the big challenges for my department—we work with the Scottish Government and others—is to build the regulatory and legal certainties to allow investment, things like no one has done what we are doing. No one has done what we did in offshore wind and we found a solution, and I pay tribute to the brilliant officials in my department who helped to deliver that. Going forward, there are transport and storage regulations, standards around hydrogen and green hydrogen and carbon capture. It is so important to get those in place. That is another risk that we were challenged earlier on the speed with which we can get staff up and running and whether we can get those three plants going by 2025. We are running at 100mph and trying to be more coherent and joined up than ever before. Another key issue, obviously, is the grid and connections. All this generation is great, but if you cannot get the electrons where the demand is, you have a problem. I think that is why we now have a minister for nuclear and networks in former Andrew Bowie, because we have someone who is absolutely focused on working with the grid, regulators and others. We have a complex set of regulations. We have to be able to deliver the programmes and projects to a timely manner. If we do not, we will not be able to meet our targets and we will put off investment. You are absolutely right, Mr Thomson. We are running out of time, and Jamie Harvie-Johnston is there. I can finish one last question. You clearly make the point, because if you ask what is in international companies' risk registers in terms of investing in the UK, it is going straight after the project, i.e., the Acorn carbon capture and storage, that represents the most commoditisable investment for them. I am rather surprised that that is not on your risk register. I will now allow Jamie Harvie-Johnston to ask a question before we finish up this morning. Jamie Harvie-Johnston, thank you very much. For a very quick question, you have talked about what I am dialing in from what I am today, minister. I just wanted to get an idea of how the UK Government is supporting developments within more remote and island communities and that area. You have talked about networks and how that investment is happening. That is a good question. I do not claim to be an expert having visited Orkney, but it is fascinating to see what is going on up there, to see the potential for an offshore wind, and continuing oil and gas to ever higher environmental standards. The North Sea transition deal commits the industry voluntarily in a world-leading way to reduce emissions from production by 50 per cent by 2030. For that, they need to facilitate and try to encourage and incentivise investment to electrify. For instance, there is that sort of piece, and then you have the title. I heard plans while I was there for major port investment, looking at harnessing the huge energy production up in the islands, which is, by definition, an awfully long way from the core English demand centres. We have to get our locational pricing signals right, some of the biggest potentials in Scotland, but if we do not reflect the economic cost and, indeed, some of the political challenges of delivering the network reinforcements, we are going to get ourselves in a problem, so we are wrestling with that as part of our big electricity markets arrangements review. When I was there, I was hearing about the opportunity to work on the ports there and develop greater green hydrogen production in the islands, for instance. On the one hand, if we have a properly cost-reflective system around the costs of reinforcement for connection, and if that, in some ways, creates the incentive to do more with the energy in the islands, for instance? Every time I go to explain what has happened, it starts again. Minister, before you leave, I did cut Michelle Thomson off on her question. If you could maybe return to that. Maggie Chapman, if there is time, her question was cut short as well. I think that Maggie would like to briefly come in before we close. Michelle, do you want to repeat the final question or if the gist of it would be helpful? I suspect that the minister has got my gist regarding Acorn. I think that that is a point that I have probably well made. Quickly, if you could cover off the challenge post-cop26, it was a great deal of optimism investors, but what the ABI, in giving evidence to this inquiry, noted was that there was still a shortage of packages that their investors are able to crowd funding into. Of course, that talks to risk and appetite and packages and so on. Are you able to give a little more flavour about that? There is clearly huge appetite, but we need the things that people can invest in. Can you give any more thinking because we are not getting to the scale that we need at the moment? By March and April, we published an updated net zero investment roadmaps for hydrogen and CCUS, as well as two new roadmaps for offshore wind and heat pumps. That is addressing the point that you are raising and trying to make it as easy as possible for people to understand the landscape and the opportunities. They articulate investment needs and opportunities alongside relevant Government policy and the funding support available to investors. We plan to publish further roadmaps later this year to support the net zero transition and will refresh them as necessary when there are significant developments. Very briefly, if I may, minister, I was asking about how you intend to ensure that any investment that we get is conditional on it being key to delivering a just transition so that we do not get a two-speed economy being set up, as we have seen in previous situations such as the north-east of Scotland. That just transition for communities is really important. I am not entirely clear what you are getting at because the market economy is a market economy. If we can bring investment in and people are competing for workers and we have colleges and training people for those jobs, then hopefully we will have good and sustainable long-term jobs. I am not sure that there is some magical Government framework that the risk would be of standing in the way of investment over complicated. I would ask how you ensure that people and communities do not get left behind, as some people and communities have been left behind in previous energy transitions. I am not picking up on the reference. The most important thing that we can do is get the investment, lead the world on the environmental challenge and make it an economic opportunity. If we do that, there will be more and more jobs and opportunity. If we work closely together as we are doing and it is great to appear before you today and with the Scottish Government and then with educational institutions, we can ensure that we have people with the skills ready for when the demand for those skills arrives and make sure that people get good, high-paid long-term sustainable jobs. I entirely agree with you that we do not need to have this revolution going on in which lots of people feel marginalised and sidelined. We have to make sure that there is really something in it for local people when they have major infrastructure put in place. A lot of that is about co-chairing the green jobs delivery group and trying to make sure that we have the right apprenticeship frameworks. We have other programmes in place so that when those jobs appear, they do not just go to people who come in from outside. There is an opportunity for good jobs, not just the low-paying jobs for local people, but that takes a certain amount of co-ordination. I am trying to make sure that we are getting signals from the market and that we are asking business to give us the data so that I can work in England with the Department for Education to make sure that there are T-levels, apprenticeship frameworks and the short courses that they do that we have the right educational and skills development in place precisely to avoid people sitting there watching outsiders coming in and taking the job that they could have had, if only they had known about it and had been able to train for it. I thank the minister and officials for their contribution this morning and the contribution to the inquiry that we are carrying out into the Greenwich Mouth area. I will now briefly suspend the meeting for our next agenda item. When I move to agenda item 4, which is consideration of an SSI, the committee has invited to note the public procurement, Mr Lain's amendments, Scotland regulations 2023. The purpose of this instrument is to amend the Scottish public procurement regime to implement the procurement chapters of the free trade agreements between the UK and Australia and the UK in New Zealand. We did previously consider LCMs on this agreement. I invite members to note the instrument. That concludes the public part of this morning's meeting. We now move into private session.