 Good morning, everyone. I welcome everyone to the eighth meeting of the Net Zero Energy and Transport Committee. Before we begin, can I remind members that social distancing measures are in place across the Holyrood campus, so please follow those guidelines when entering and leaving the committee room. We have apologies today from Natalie Dawn. Collette Stevenson is attending as committee substitute. As agenda item 1, we have consideration of whether to take agenda item 4 in private. Item 4 is the consideration of the evidence that we will hear today. We will also be taking this opportunity to ask members to take two other items in private at our next meeting after the October recess. These are consideration of the committee's work programme and the committee's draft response on the Scottish budget. Are we all agreed? We are agreed. Thank you very much. Today, at item 2, the committee is hearing from two panels. First of all, we will hear from representatives of OFGEM, the Office of Gas and Electricity Markets and Independent National Regulatory Authority. I welcome Jonathan Brearley, chief executive, Harriet Harman, head of transmission charging policy, Anna Rosenton, deputy director retail transition and Stephen McMahon, deputy director electricity distribution networks and cross sector policy all at OFGEM. Good morning, everyone. Thank you very much for joining us this morning. I would also like to thank you for your written submission given to the committee ahead of today's meeting. Thank you very much. That was a very useful background. Mr Brearley, I understand that you would like to begin by making a brief opening statement. Yes, I would. Thank you, chair. My name is Jonathan Brearley. I am the CEO of OFGEM. What I really wanted to do was just to talk a little bit about OFGEM's role and then some of the clearly urgent issues we are dealing with and just to touch on our wider work programme. OFGEM here is really here to do two things. First of all, to protect customers today and then secondly, as part of protecting customers to support the transition to net zero. We have a very strong working relationship with the Scottish Government at all levels. We have over 500 people now working in Glasgow and that really has allowed us not only to think about things in the UK context but to make sure we understand the issues affecting Scotland and the concerns that come from the Scottish Parliament and the Scottish Government. Now, when I talk about our work programme, we are focused fully on those two objectives and I'm going to start with a very short term. Clearly, we have seen unprecedented changes in the gas price and that is putting strain on the wholesale market and there's two things I'd like to highlight to the committee. First and foremost, we are focused on the needs of customers and clearly, as these costs feed through to bills, that is something that is going to be of concern to all of us. Secondly, I just want to let the committee know that the systems and processes that we have in place are working to reassign customers from those companies that have exited the new companies who can then take them from there. Secondly, I do want to touch on our wider programme to net zero. OFGEMC is getting to net zero as a full part of our objectives. That includes Scotland as well as the wider UK targets. Some of the things I'd like to highlight that we are doing, first of all, we have the price controls which configures the network so it's ready to receive all the new forms of technologies like electric vehicles and clearly changes that we'll need in the future to heating to make sure that there's low carbon, either through low carbon gas or through electricity. Equally, we are thinking about the charging regimes that underpin that and I'm happy to expand on that further. Finally, one thing that I would say is that given the scale of change that we do need to meet those goals, we do think that there are further reforms to the market that might be needed. We have been doing some thinking on that but over the coming months we will be talking about that in more detail and that's really looking at how do we genuinely not only get to net zero but make sure that we do an efficient secure system that is run within customers' interests and at least cost. I would like to follow up on your opening remarks in relation to the disruption in the energy supply market that we have seen in recent weeks and the significant increase in wholesale and consumer prices, both in the UK and across Europe. Felly, your remit is relating to the UK. It would be useful to get your reviews on the main reasons for this disruption and how long you think this disruption will last in the UK. When you look at what's happening in the international gas market, I think that we are seeing a kind of configuration of a number of things at the same time. First, we are seeing much higher demand than expected from Asia. If you look at the IEA projections of what was needed versus what we're seeing now, almost two thirds of the gas that the UK uses has been added to those projections. There's clearly much higher demand than was anticipated by the market and then there's a series of factors internationally that are constraining supply. For example, it looks like there is little over and above long-term contracts coming from Russia and equally there are some issues with some of the LNG terminals, all of which mean supply is constrained and demand is higher than you would expect. That's really what's driving the price rises that we can see. In terms of duration, it is very, very hard to tell and, in our view, we need to be open-minded about how long it might last and plan for a range of scenarios. Thank you for that. We've also seen the collapse of a number of electricity supply companies in recent weeks, primarily new entrants to the market. As the primary market regulator in this area, do you think tougher licensing conditions should have been imposed on these new entrants to make sure, for example, they were hedging their exposure to volatility in the wholesale market? Clearly, that is something that we're going to look at given the scale of change that we've seen in the wholesale market. However, that is not something that is just affecting companies that haven't hedged. All companies in this market are feeling a huge amount of strain given the change in the wholesale cost rise. To keep your idea of scale, we are talking about a gas price that is six times the price that was last year and went up by 33 per cent last week. What we often are doing is making sure that our processes work when companies exit the market. Clearly, collectively, we need to have a wider conversation about what that means for the future, but our focus right now is on making sure that customer interests are looked after. I know that other members want to come in on that topic. Do you often have sufficient regulatory powers in this area to avoid a situation like this happening again? With the collapse of the nine energy suppliers in recent weeks, how will you ensure that effective competition is maintained in the marketplace while maintaining stability of supply? We laid out three principles as to how we would deal with this in conjunction with the sector of state and base. Those were first and foremost to focus on customer interests. The second was that we weren't going to bail out companies that were failing. The third was that we maintained diversity of supply. Throughout this, we are keeping a very firm eye on making sure that as the market comes through this, it does have a diverse set of players. In essence, our job right now is to make sure that we run the industry systems and processes, but of course we are talking to people at the CMA to make sure that we have a highly-capacited market that comes at the end of this. My final question is about the expected price implication for consumer bills as a result of bailing out the energy supply companies that have collapsed. I know that there are discussions about a bad bank and how the old liabilities of the failed companies will be dealt with, but overall, is there an estimate on what the impact of this disruption will have on consumer bills? It is honestly too early to tell at this stage. We are still working through this and there is still change in the market, and it does depend on the trajectory of that gas price over time. The main point that I would make is that with the change that you are seeing in the wholesale market, there will be an impact that feeds through to customer bills. The gas price change alone is something that all of us need to be focused on. We know historically that transmission charges have caused a disadvantage to the development of renewables in Scotland, but bearing in mind that you have issued your call for evidence on Scottish locational network charges just on Friday, we do not consider simply reducing transmission tariffs for some parties or in some regions to necessarily be a desirable outcome in its own right. We expect that charges will be assessed in accordance with our statutory duties, the COC applicable charging objectives and the legislative framework in which we operate. Do you consider Scotland a region or a nation? We have a national parliament here. Does the legislative framework in which we operate include net zero? Should it include net zero? How does it include net zero in any changes? Will the legislative framework that you are currently operating include Scottish Government's net zero commitments, or does that require changes? Does the legislative framework in which you operate include the Prime Minister's commitment to 40 gigawatts of offshore wind by 2030? Does that legislative framework include the impending commitment to zero carbon for GB electricity generation by 2035? Is that legislative framework in which you operate is not fit for purpose when and how should it be changed? To start with our statutory duties, our duty broadly is to protect the interests of current and future consumers. We have been really clear, certainly since I started this role, that we see getting to net zero as a fundamental part of that. Our view has been that we are open-minded about whether those duties have changed, but we are not waiting for that. All of what Ofgem does is about protecting customers today and supporting the country to get to net zero. The Scottish net zero goal is compatible with all of that, and we are absolutely supportive of getting to that goal. That includes the commitments that the PM has made. You have a regulator that really wants to push forward to make sure that we do meet all of the interim goals to get ourselves to net zero. With that going back to the current situation with the gas wholesale price, our view is that one way in which you mitigate risk like this is to diversify that supply base, and that is another reason to get to net zero. All I would say about our call for evidence on transmission charging is that we are opening up a question here. We are thinking long term about the future, and we welcome representations from all parties. That is something that I think that we would love to progress. In terms of why now, I think that it is because we do think that we need to reflect on the incentives in the regime as a whole, because the kind of change you need to get to net zero is a fundamental one. There clearly is a current tension in the regulatory framework between pursuing net zero and your historic role in relation to consumer prices, and that is a recognised tension. COP26 will provide a showcase for investment in Scotland, but your modelling for access and forward-looking charges in your review and consultation are minded to position. It states that we observe a shift in the location of new generation capacity in our model. Under the transmission reform option, we observe a quote, "...less investment in embedded generation capacity in Scotland and a corresponding increase in distribution zones further south." Is that not undermining the Scottish Government's attempts to pursue net zero in our targets? How can we often be sure that building wind farms in England, which is, as we all know, less windy in Scotland, will not make the cost of net zero higher overall? What we are trying to do with the system as a whole is to make sure that we have the right incentives in place. In a sense, generation is located where it is most efficient to do so. Just coming back to the bigger picture here, we are pushing a route that creates huge capacity for Scottish renewable generation. We are talking to the system operator about making sure that we have a strategic offshore grid to make sure that offshore generation is able to connect efficiently into the UK, and we are wanting to make sure that all of the renewable capacity, including, for example, the Shetlands, can be taken advantage of. Equally, as I mentioned, we are thinking about how the market might evolve in the future. We really do make the most of all the different options for net zero, including the benefits as well as the costs of electric vehicles. That is something that we are trying to work with our charging ratios to make sure that the picture is a whole makes sense. That really does include making sure that we have the most efficient way to get there. Mark Ruskell, please. I follow up on that point, because we have seen a recent upping of ambition in Scotland in relation to onshore wind, potentially a target of up to 12 gigawatts of onshore wind by 2030. We have also got the offshore wind target as well, which is sending a very good signal to offshore wind developers. We have got Scotland coming on as well. Do you not see the transmission charging regime as acting as a block to the delivery of that? How cognisant are you of those targets within the forthcoming review that you are putting out? I will pick up, but maybe Harriet wants to come in as our charging expert. My view is that this is a chance for us to have a substantial conversation about how the charging regime plays out. That is why we issue the call for evidence to open that conversation. All I say at this stage is that we are open minded about where that goes, and we are mindful of all targets and all aspirations when we are designing the regime. I think that what we need to do is to make sure that we stick to the goal that we have, which is to get to net zero at least cost for consumers. Harriet, you may want to come in and provide some more detail about the scope of that review and how we approach it. I agree with what Jonathan has just outlined. The call for evidence that we have put out is very broad. We are keen to hear from a variety of stakeholders from within and out with the renewables community, within consumer groups. We want to reach as many different forms of stakeholders as we can, and we want a variety of information to come back to really help us to inform what we do next. In terms of the current charging arrangements, we have issued within the call for evidence a bit of an outline of some of the areas that we think there are some questions about. That is not to say that we have any kind of concluding here at the moment, as this is a list of stuff that does not work. It is more to say that these are the sorts of areas that are quite material in terms of the effect they have on the absolute value of charges. There are some questions about whether there are still the right assumptions, whether there is still the right treatment, whether there is still the right degree of cost reflectivity. In the broader context of a very different energy system than we had 20 years ago when the charging regime first came in, and in the context of some of the broader sweeping reforms that we might need to see over the next 10 to 15 years to get us all to our net zero targets, whether that is the UK target or the specific Scottish target. We are cognizant of the variety of targets that are out there. We are committed to delivering net zero. The call for evidence will support us in our thinking about how we can utilise the charging regime to not preclude net zero. There are lots of ways of getting to a net zero system and what we want is a charging regime that is open to all of them, that would support all of them. That is really what we are trying to achieve through this call for evidence, is to have people come and tell us that this is the stuff that stops me investing or that makes it hard for me to compete or whatever it is that their perception is, such that we can assess whether, to the original question, there is a blocker to the net zero targets or to renewables deployment. We are, as Jonathan said, really open-minded and encourage a variety of responses. Just to jump in, the last point is, for a while now, I think that many members of this committee and indeed the Scottish Government and many Scottish stakeholders have asked us to open up this question, and that is what we are doing. I am really looking forward to comprehensive engagement. As Harriet said, we are being as open-minded as possible in our approach. I am sure that you will get a lot of responses. Is it the case that the fundamental problem here is that we have inherited a grid largely from the 1950s and that all the locational signals are based around that old-fashioned grid that was based on coal-fired generation? We do not have any coal-fired generation left in Scotland. How do you see your decisions and the charging and the investment going forward into the grid that is fit for the 2030s and beyond, when we are going to have a completely decarbonised electricity system? Absolutely. Let me point out to some of the work that we have done and that we are working through at the moment to explain how we see this. In central right, the grid was designed for the 1950s. It worked really well for about 50 years. When I started in energy, we still had big-fat power stations and people at the end of a line who had flicked on a switch and flicked it off. We believe that if you look out to 2030, almost under any scenario, you end up with a very different configuration on your grid. You have much more local generation, new renewable generation, but you also have resources such as batteries and storage, which form part of the electric vehicles that are joining that grid. We think that the country is facing a choice here. We either try and manage that by building a lot of copper in the ground and by running a fairly inefficient system or we go to a much, much more flexible system where, for example, we can move demand, for example, changing the times that people can charge their car at night time, which will manage the costs both in terms of generation and in terms of investment in the network. We believe that if you do that, you are going to have a much lower cost system. When we open up the question of transmission charging, that is nested in a wider question of how are we going to make a reality of this smarter, more flexible system that really will bring down cost for customers. Off-chain is increasingly of the view, and it is pursuing that flexible future that is one of the key drivers of successful transitions to net zero, not only to meet climate goals, but also to meet security and cost goals. I have three very quick questions. First of all, do you expect the cost of renewable electricity to fall as more infrastructure is built? If so, could ultimately renewable electricity become an alternative to gas for heating? One of the massive players in my career was starting out with the teams that were in policy terms initiating the offshore wind sector and saying that six times the retail price when it started. Offshore wind has been a case study in how technological innovation can reduce costs and now does compete very favorably, as onshore wind does with conventional forms of generation like Aston Coal. We absolutely do see that playing a big part in the future of the electricity system. I think that what we all need to think through is how we make sure that we have a system that is firm enough and resilient enough to be able to manage the intermittency that is involved. That is why it is key that we pursue options like battery storage and indeed like a more flexible grid that I described earlier. In terms of heating, we have looked at different scenarios for future as I mentioned. One of the key dimensions is precisely how electrical heating versus low carbon gas heating might play out and we are open minded on the option. But absolutely, electric heating is a serious option that we should take. Secondly, have you done any modelling or are you aware of any modelling on the financial implications for households from the decarbonisation of transport buildings power? If you look at the committee on climate change, they have come out with their own assessments of this and they said that it is roughly about 1 per cent of GDP. That is quite a complex picture when you unpick it. What you do see, in my view, is an increasingly optimistic picture around the cost of the transition for the power sector. As I mentioned, there are a number of technologies that are genuinely continuing down the cost curve and we have very strong evidence for that. When you think about how we transition in heating, I think that the picture is more complex and we need to see new technology and more innovation in that area. Certainly, when you think about it from a household's perspective, those are the two biggest dimensions that you look at, but just coming back to electricity, one of the fascinating things about electric vehicles is that the cost to run is already very low and the job of the manufacturers now is to bring down the cost of manufacturing so that we do not have such a price difference between cars and we are optimistic that that will happen. Given all that you have said, does Ofgem take a view on how the capital costs of that decarbonisation can be paid for? For example, are there other ways other than in the personal bills of the consumer in the generation and ultimately use of public funds or does this ultimately devolve on the individual consumer to pay for? We think hard about the distribution implications of what we do. We set out granular assessments of the decision that Ofgem makes itself but ultimately the question of where it falls. Is it within the electricity system and therefore on bills or is it something that taxation is a matter ultimately for the Treasury and for Governments? I am very grateful that I have no further questions. Liam McAllister, Collette Stevenson, please. Good morning, panel. I would like to focus in on your action plan and your future work programme. How is Ofgem engaging with consumers to ensure that there is widespread understanding and a buy-in to the net zero transition? We do a great deal of work in three areas. First of all, we have direct contact with different consumer panels and consumer groups. We work hard as an organisation to create links between the NGOs that support consumers and the people that work within your group. I do talk regularly to customers. Recently, I was in the North of England talking about a trial on low-carbon gas and how people thought about that. That is a fundamental part of my job because what you realise is that things that you imagine are part of the plumbing. A deal of concern for people is involved, so we need to be very mindful of how people feel about some of the technological changes that we might make. Secondly, we clearly talk publicly about all of these issues and we are engaged in a wider public debate, but we also have a very close relationship with those NGOs that work with consumer groups, particularly the most vulnerable. What we found during the Covid crisis was that relationship was key for us to make sure that we understood all the different sorts of issues that customers would face over the last year and a half when customers were put under strain in all sorts of different ways. You mentioned new technologies and better use of data and artificial intelligence. Do you see that as a role in the zero-carbon energy system? What work is it often doing to maximise those opportunities? If you come back to that flexible world that I was describing, where you really need to become more granular in the decisions that are made to turn things on and switch things off to move the times that you might charge batteries, for example, you absolutely need a different kind of platform to support that, and that does mean something that is much more data-enabled than the system is today. We see the role of data as fundamental to getting to that more efficient and more flexible system. We have built up quite a large data team within Ofgem. We have a chief data officer and we are beginning to think through, almost from first principles, what does that new world need to look like? What are the data requirements and data standards behind it? Therefore, how should Ofgem intervene to support some of those things to happen? I will give you one example. In a statement in my mind that was coming on this, one of the areas where we do see a big role for data is in those local networks. We are currently in the process of re-agreeing those local network settlements. Data is certainly a part of that. Steve, would you like to come in and just talk a little bit about that? Steve, are you online? I think that Steve, you need to unmute Steve, who I was comparing. He's been unmuted. I think that, as Jonathan said, we will get huge changes over the next 10 years or so in terms of electric vehicles, in terms of the way that we heat our homes and businesses. The consumer role in that transition will engage very differently with how they get their energy. Data is a big part of that. As Jonathan said, over the next 12 months we will be settling the next set of real price controls for the electricity distribution networks. We are at the business planning stage with the network companies at the moment, including the two Scottish DNOs that operate the local grids in Scotland. A key part of our requirements for those networks is how do we make sure that we transition to a smart, flexible, data-enabled system that can give us real-time information in terms of how people are using their energy and how the system can then manage that to optimise the costs so that we can use more technology to, for example, charge electric vehicles perhaps when the demand isn't as high, so not at the evening periods, for example. That enables technology, that investment on network monitoring, data capability and more in terms of the distribution system operation aspects. Those are all fundamental parts of our price controls and will be fundamental parts of our decisions that we take next year. Mark Ruskell has a supplemental fault to be followed by Monica Lennon. I wanted to ask you how you think the smart meter roll-out is progressing across the UK, because a lot of constituents get in touch with me and say, I've got one but it was installed and it doesn't work now. It's really patchy. Some people are able to get them, some aren't. I'm just wondering, is it best that the smart meter roll-out is being done through energy companies, some of which are going bust at the moment, or is it better that this is rolled out consistently through DNOs who've got more of an overview about their distribution and grid in a particular region? What I'm seeing is just a bit of a mess at the moment. Anna, do you want to come back on the stage to see the smart meter programme and perhaps pick up on the wider point about who's best place to make the change? The smart meter roll-out programme is progressing and is successful in rolling out a large number of smart meters. Covid last year caused quite significant problems in terms of suppliers rolling out. That led to the Government delaying a new framework for the roll-out by six months. At the end of this year, a new framework will come into place, which will place tight targets on the companies when they have to roll out to achieve the target roll-out. It's quite a long way down the roll-out programme and the Government is still confident that the targets will be achieved. Perhaps just to pick up on the wider point about who's best place to do this. We are quite far down the programme now, so in a sense we feel that we have a model that will work. I'll just explain some of the rationale behind it. One of the issues with local network companies is that they don't have the same direct relationship with the customer that some of the retailers do. When you think about what you're trying to build out of smart meters, the fact that you're trying to build different products and services that are going to make a huge difference to the way customers can use their energy, particularly when we get to this more flexible world, we feel that it's right that the retailers are leading that, because they're the ones that really need to be adapting their packages behind it. I'd like to bring us back to the UK energy crisis, because a report by Citizens Advice published last week found that consumers who are moved to a new supplier typically pay £30 a month more than before. Johnathan said that all you do at Offgem is about supporting the consumer today. How can Offgem ensure that effective competition is promoted in the wholesale and retail markets while ensuring that everyone is affordable to all consumers? Anna May wants to come in on the numbers and how we see it. To take the main point, all consumers in this market are protected by the price cap. The price cap provides a fair reflection of the costs that are in the market. Indeed, when you look at the wholesale costs that are there now, the price cap is providing good value for customers. We feel that, in these extraordinary times, we have measures in place that protect customers' interests and make sure that, although those wholesale costs will be passed through, that this is managed in a way that best protects customers' interests. There are now some customers who are on lower tariffs, so we are in those companies that are unable to fulfil those lower tariffs, so we are trying to manage that transition as best we can. I don't know if you want to add anything on the specific numbers themselves, but we are working with Citizens Advice to understand what is behind them. As Johnathan said, customers were on cheaper deals previously. A lot of those cheaper deals have now been withdrawn with rapidly increasing wholesale prices, which has meant that the price cap to the capped tariffs now tends to be the cheapest tariffs available. What happens when a supplier exits the market? Off-gem safety net means that those customers are transferred onto the capped tariff, so they are protected and we ensure that they are paying a fair price for their energy. It is a really important issue because Citizens Advice is going to say that many more people will face fuel poverty this winter and could end up turning off their fridges and freezers, relying on hot water bottles for warmth and requesting more support to buy extra duvies and blankets. None of us wants to live in a society like that. There have been calls from energy companies and charities to introduce a social tariff, which is different from what Anna talked about. That would be for those who are already in fuel poverty, which would offer a tariff below the price cap. Can I ask how that could be implemented to ensure that the most vulnerable households are protected from these recent price increases? More generally, given our interest in net zero, how we can be sure that this journey to net zero will not push households further into fuel poverty? I think that we need to be clear that changes in the wholesale price are going to be extremely difficult for customers to manage, not just through this winter, but as those prices do feed through to bills later. We develop something called the warm home discount. That is in the sense a discount for vulnerable groups against the tariff that is in place. That is something that I encourage all customers to apply for. Equally, we always encourage customers who are facing financial difficulties to contact their supplier to get access to a range of support and help that is available. For example, if you are on a prepayment meter, there is access to emergency credit. We have rules in place that means that companies have to put on an affordable prepayment plan if you are falling behind in your bills. My view is that we all need to work together. The Scottish Government, the UK Government, Ofgem and the industry to support customers as best we can. That is undoubtedly a big change in the cost of energy that has already been in place, but that will undoubtedly cost pressures will feed through to bills later on also. I am very grateful for letting me come back in again. It was just off the back of Monica Lennon's questions. The Scottish Government was planning an energy company. Did Ofgem see those plans? If so, in any event, does Ofgem take a view on whether the Scottish Government's energy company would have achieved on the duty of reducing prices to consumers? We do not take a view on whether different forms of ownership are going to make a difference to your capacity to deliver for customers. I would say that our experience is showing that the most important thing is the way that company is set up and ultimately how it manages the transition between the risks that are in the market and the prices that are being paid for customers. What we do see in the market even today, even through current changes, is that there are a variety of different ownership models that can achieve that. We do not take a particular view on the success or otherwise of the proposal that was there, but we accept that there are different models that can be successful in this market. I am grateful for that. Following up on that, the Scottish Government is proposing an energy agency. What impact do you foresee that agency having? Will it achieve all that an energy company could have in both prices and decarbonising the energy system, do you believe? I think that we will have to look at the details of that proposal and see how it might work with some of the schemes that will be run. Right now, there are lots of things that we need to do, including working on energy efficiency and other interventions to make sure that we manage bills for customers. We will be very happy to work with the Scottish Government on their energy agency proposal. I do not have a view right now as to whether that will work. My first question is going back to what Monica Lennon was raising in regards to supporting consumers. It made me think about prepaid metres, the customers who are using them tend to get up, if I am being quite honest, quite a raw deal with it. Can I ask what is being done to help protect those folk who are on prepaid metres? Is there anything that off-gem can do about the price to getting those removed if someone moves into a new property and a prepaid metre is already there? I know that it is very expensive to then get it changed back. I welcome your comments on that. We have very strict licence conditions on how suppliers should behave to all customers, particularly the most vulnerable. That has created some really clear requirements around access to emergency credit, for example, that may tide you over if you are facing financial difficulties. For all customers, we have requirements that the companies put you on an affordable prepayment plan. In a sense, the other thing that I want to add from my perspective, before I know what is coming up on specifics about removing metres, is that, in a sense, part of that smart mix-up programme that we were talking about earlier has been a really, really big change in the prepayment metre market, because that does allow you to top up in a variety of different ways. The last thing that I want to say in terms of how we are working and how the industry have worked over the last year and a half, prepayment customers did face some of the biggest issues during the Covid crisis. For example, if you are self-isolating and you have a metre that needs to be physically topped up, you have to find a way to get help to do that. I think that one of the things that the industry, off-gen and Government working together did really well, was to make sure that we identify issues like that early and find solutions where we can. That meant working with community groups. In some cases, that meant companies directly sending someone out to support you to make sure that you can top up your lead. I think that, exactly as you said, we have strict licence rules around all aspects of that. As you said, the roll-out of smart metres is really key in reducing the cost and hassle that is involved with PPMs. Smart metres will enable people to easily switch between suppliers to actually do that. We will make the whole process more cost-effective, so we will reduce the bills for PPM customers. The cap also applies to PPM customers, so they are protected. If a supplier goes out of business, the PPM customers are first on our list in terms of people that we are looking at. I am sure that they are transferred across seamlessly. I think that what we are saying is that we will come back with a note to the committee on the specific issue. Just to change the subject again, we have not really touched on hydrogen this morning. Can you tell me what role Ofgem has in hydrogen markets and the hydrogen economy and what work is it doing to prepare for and to regulate the market? This is a huge area for us. It is something that we are highly enthusiastic about. As I mentioned, when I was talking to that group of customers, it was about hydrogen blending and how they felt just about having part of their hydrogen coming through to all of their heating and their cooking. Equally, I went up and saw how the whole thing can work in practice. It shows you that these technologies are possible. In terms of our role, ultimately, there is a UK Government that will lead in terms of the design of the regulatory regime and the wider economic incentives that will be applied to generate hydrogen. Where Ofgem is likely to have a large role will be in certainly making sure that the network can evolve. If hydrogen turns out to be the most cost-effective option, how we change those gas networks and how we innovate on those gas networks is a really important part of what we do. Equally, I know that Steve is very passionate about that. We have built in a huge amount of innovation funding into these network settlements that we have. Through that, I expect to see a lot of proposals that will be saying, basically, how do we take this to the next stage of development? How do we make sure that we understand at commercial scale what the implications of hydrogen would be? How do we make sure that it is the right option that we have a network that is ready? Steve, do you want to add anything on the innovation fund in general, but it is a big part of our thinking unit? Absolutely, and I think that it is preparing those gas networks for the transition to a low-carbon future, understanding the feasibility, the costs of hydrogen and the gas grid and getting to a position where we have a clear demonstration that the hydrogen network is technically and economically feasible, safe and acceptable to customers. As Jonathan said, there is a huge amount of network innovation funding that has gone into that. Last year, we had SGNs own H100 project up in Fife, and there is lots more. At the back end of August, we announced the arrangements for the new strategic innovation fund that will apply through the real-to-prize controls. A heavy focus of that is on hydrogen and the heat challenge more generally. What we have said is that we can flex the fund that is available to explore those innovation schemes depending on the need and the value for money. My final question is regarding COP26. It is just around the corner. What are your expectations for it? What would you like to see coming out in regards to achieving the net zero targets? Perhaps I should talk a bit about the role that we are playing in COP and some of the things that we are doing. We reached out very early in the process to talk to other regulators and other market operators across a wide range of countries to begin to share experience on how we are approaching net zero and to learn from them. One thing that we are hopeful of on a very micro scale is to build that network out of COP. We would like to see an international network of regulators created whose sole role is to share the challenges that we are all facing. I have spoken to regulators in fully publicly owned systems. I have spoken to regulators in completely different regulators. What is remarkable to me is how similar the challenges are that we are facing. I would like to make sure that Ofgem, as an organisation, is working with its international partners not only to spread our good practice but also to learn from them and to make sure that we can understand where people will undoubtedly have more successful approaches than we do. In terms of COP itself, I am hopeful that we continue the level of ambition, not just in the UK but globally. Paradox for me, working in climate energy policy for 15-20 years, is incredible how far we have come. It is also incredible how far we have to go. The risk is that if we do not get sufficient international ambition, it will become harder domestically to continue. More importantly, we will not get to ameliorate some of the big effects of climate change that we know of. We have all got two voices, the one that says that we have to push further and faster. I think that we should recognise that there has been a huge change to get to here. We are building independence on natural gas, with all the price volatility that we have seen in recent weeks and, of course, all the carbon as well. We are locking in that infrastructure into the 2030s and beyond and really high carbon assets. What we are doing is testing and trialling a whole different set of approaches. I think that there will be some big trade-offs between low-carbon gas and electric heating. In a sense, what we have to understand better in both dimensions is the cost disruption and the infrastructure change that is involved in each. There are different ways of producing hydrogen, so we have green hydrogen that will come from renewable sources potentially. If you want to sort of end-portrait of where we are thinking but accepting that thinking is evolving, it does seem that, for some heavy industry, hydrogen feels like it has got a lot of potential. I think that there is an open question about heat and how heating will work. That is why it is really important that, over the next few years, we do push that innovation programme so that we have a much fuller understanding of the potential and the cost of different fuels. I think that coming back to the point about the current situation and our reliance on gases, however we do it, we do need diversification. I think that we are going to get that in the electricity sector. Remember, that will cover a lot of our transport in the future as well. Fiona Hyslop, I would like to take you into thinking in the strategic space and in timescale. Johnathan said that the world has to move further and faster, so that is not always going to be driven by the market itself. Clearly, legislation and regulation can drive that. In terms of a time frame here, if we are going to make this shift, what do you see a reasonable time frame is for us to meet the UK targets on climate change and that shift off carbon onto renewables? What is your current thinking strategically? I think that we look to a number of different areas to be able to answer that. I am just going to check, because my internet has gone slightly shaky there. If there is a silly question to ask, you cannot hear me, because someone let me know that you can. Great. We look particularly to the committee on climate change around the trajectories that we think we will need. I think that it is really clear that we need a continued big shift in the power sector. We need to see the acceleration in the way that we transition to renewable and other low-carbon technologies, such as CCS and nuclear. We need to see an equivalent shift in transport and the Government's goals around 2030. We accept that we are going to need millions of electric vehicles on the system to support that. For me, the biggest question collectively that we need to face is the question of how we are going to hit our homes and our businesses. I think that we need to work hard on unlocking the potential of the solutions that are already out there as possibilities. That is where we need to put continued effort. The one thing that I would say is that, when you look at the scale of that change and you look at potentially more than 10 to 12 million electric vehicles by 2030, that is why we need that flexible and smart system, because if we get that in place, the cost of adding all those vehicles to the system will be a lot lower. Indeed, those batteries provide huge benefits in terms of stability, security and managing other costs on the system. If we are looking at that scale of change, the more infrastructure we have, whether it is in transport, heating and the big areas, the more infrastructure we have, the cost can go down. It comes back to where the generation potential is. In the Scottish context, we have a situation where the Beatrice wind farm is operating and being charged an average of 4.50 per unit of energy, whereas the similar Gabbard of the south-east of England is £1.50 per unit. I suppose that the issue is that that tension is quite clearly there. Regulation has a part to play. How do we get that infrastructure shift where we can actually get the generation, Scotland's got 25 per cent of Europe's offshore potential? How do we translate that into mass infrastructure for use clearly in terms of a cost basis for more renewable distribution if the generation itself is being severely handicapped by the current regime? What steps in terms of energy legislation and when? We do not want to miss the boat because we have missed the legislation required to make those changes. If you can answer that, that would be helpful. Can you hear me again? Apologies, my internet is very shaky. I am sorry, Deputy Committee, just to understand the question, you are asking basically the scale and pace at which we need to reform the system and the charging system around it. Yes, including the point about transmission as well, because that is clear. If we miss the boat on changes, how do we get the pace and scale that we need for the timeframes that we are talking about to get that further fastest kind of drive? My view is that there are some very big changes that we need to make that strategic step. For example, when you think about the transmission system as a whole and you think about the bill that will be needed to support offshore wind, we are strong supporters, as people know, of having an independent system operator. That really is going to guide that investment and make sure that we can make that strategic change. That system operator needs to be able to make sure that we have an integrated offshore regime and allows that huge step change really in terms of offshore wind generation, and indeed begins to plan and to run the system at a more local level also. Alongside that, that will take time. We need to make sure that through our network regulation, and Steve McMahon is leading the current set of price controls, that we have capacity to get the necessary investment in place. What we did when we designed the first three of these is we said, look, here is an initial allocation of money, so £30 billion, roughly. We have designed a process to allow companies to come to us and build more network if that is what they need to do. In essence, what we have is a system that makes sure that we can run the system that we think we need today, but also adapts very quickly if we need to build out more tomorrow. I think that you will find that has played through in our local network settlements, as well as our national network settlements. In that way, we will make sure that networks can invest, in some cases, ahead of need to make sure that we can have a net zero target. Steve, would you like to come in? I agree with that. I think that there is significant investment that is already happening across electricity networks in Scotland, whether that be at the transmission level or the distribution level. We are looking at a lot of grid reinforcement projects coming through, so that network constraints do not obstruct the export of power across the country. Picking up on that last point that Jonathan made, we are scaling up the investment ahead of need through our approach to strategic planning, particularly on the transmission network. That is essentially, if you look historically, there has been emissions created in the past where generators had been connected to the grid without the associated network capacity being in place. I commit to sort that out later. The investment that is catching up in the future will anticipate in advance so that network constraints are in an obstacle. That is a big feature of the transmission planning. The distribution network is the local grids as well. We are just going through the processor, settling those price controls and we will take the decision on those next year. The same principles in terms of making sure that the networks are not constrained and achieving net zero, but doing so in a way that is fair to consumers. That is the driving principle behind it. The point about diversification of energy needs to be both and where we need to get to, as opposed to either green, hydrogen or others. How do we know in terms of our timescale again that the regulations and the legislation that is needed in advance of the transition will be in place? What is your view of when that has to happen to unlock that potential? To explain how we think about our regulations, we use those scenarios to 2030. We make sure that we will be building a system that is fit to allow all of the millions of electric vehicles, for example, on it. That really forms a fundamental part that business planning is going through. Equally, the energy bill that is being planned is vital to make sure that we can make the system of governance changes underneath that to make sure that we have a sustainable system for the future. In the sense of what we do, we look to people at the Committee on Climate Change to give us a stake in the ground to make sure that we understand how much the system needs to change. That is what drives the thinking around how we shape our regulatory design and how we apply the regulations that we use. I would like to come back to something that Steve McMahon mentioned in terms of consumer behaviour and the concept of behavioural change. One of the issues raised by other panel sessions in other committee meetings is the extent of behavioural change that is required on the part of consumers. I would like to get your perspective on the many elements of behavioural change that will have to happen in the years ahead. What role will off-gem play in that? The way that we all use energy in a sense will need to change. As a result, we will need to adapt how we use our energy and indeed when we use our energy. There are a number of different elements to that, but one is taking advantage of the potential of new technologies that are available. If I were to give you a very simple example and explain off-gem's role in that, if you go back to charging your electric vehicle, we think that we know that if that is done in a smart and flexible way, the consequent costs for the system are much, much lower than if we all simply charge our vehicles at the same time that we need to use the grid for lots of other things. Equally, we know that that can be managed in a way that a consumer can still set all of the needs that they have and allow a system to optimise around that through smart charging and smart charges. Through product standards in base and across government, the Government is thinking about how to make sure that those standards are applied. I mean, when I'm a customer, I make sure that not only I get a smart charger but that we have a default set of tariff sets. What we see is our role in working with the Government to shape those things but, equally, making sure that when we do that that the charging regime and all the costs underneath that really do support consumers to make the right cost. So what I would say is that we do need to get the economics right here but we don't think that the economics are going to be enough. We are probably going to need a wider set of behavioural intervention to support customers on the journey that they would make. I point out something in smart charging. The other thing that I point out, really, is that one nut we still need to continue to crack is energy efficiency. I'm making sure that all of us are doing what we can to prevent our homes from using more energy than they need. We both support us in our journey to low carbon but also reduce bills. Thank you very much for that. That brings us to the end of our allocated time. Let me once again thank the panel for joining us today. We very much appreciate hearing from you. Given the range of issues that you raised this morning, I think that we would very much like to have another meeting in the near future to have a look at some of these issues as they progress. Thanks again for joining us and enjoy the rest of your day. The committee will now suspend for a changeover of panel. Good morning everyone and welcome back. I'm pleased to welcome our second panel of witnesses this morning. They are Brendan Callaghan, interim chief executive environmental standard of Scotland. Tony Rose, former director of the Infrastructure Commission for Scotland. Professor Ian Docherty, former commissioner of the Infrastructure Commission for Scotland. Professor Karen Turner, director of the Centre for Energy Policy University of Strathclyde. Thank you very much to each of you for joining the committee meeting today. We appreciate your input. We also thank you for your submissions given to the committee in advance. We have roughly an hour and 15 minutes for this session and we have a number of topics to cover. Please bear with us while we ask a number of questions of you. The first question relates to scrutiny of the Scottish Government policy in the transition to net zero. That is one of the main responsibilities of this committee. Your submissions to the committee made it clear that we are looking at a vast number of overlapping policy initiatives and a wide range of targets and metrics that will need to be monitored. With the best will in the world, we as a committee will not be able to keep track of every single one of those targets. The question is to ask what you believe are the key policy initiatives and the key targets and metrics that we should be monitoring and what policies and targets will have the most impact on shifting the dial towards the climate change targets. Perhaps I can start with Professor Turner because measurement of policy impact was something or is something covered in the net zero principles framework outlined in the submission that you gave to the committee. Professor Turner, I hand over to you to begin the session. Thank you very much for inviting me along this morning. The core essence of what we have submitted in advance is that, when we are thinking about net zero, there is a huge transition of the economy and of how people live, how they earn their income, how they spend their income, what they think about. As you have alluded to, it raises the issue that this is a huge public policy challenge. It is not just a climate policy challenge, it is one that is going to cut across economic policy, social policy and industry policy. It is trying to bring all those parts together that is so challenging. In a Scottish context, we are operating with a devolved Government that does not necessarily have all the levers and powers that are in place. A lot of co-ordination is going to be required between the devolved nations and the national government. We have identified issues around how we really need to understand who ultimately pays for things, how they pay for them and when. That is a lot to do with, if we adopt an approach where industry has to pay for things, industry will try to pass things on through their costs. The first challenge is that, as we start to incorporate the price of carbon and how we pay for things and the price of our consumption, that will impact the cost of living. The other issue is that, where it is more difficult to pass on costs in complex international supply chains that many of the firms, for example, at Grangemouth operate in, cannot pass on the prices easily. If they lose competitiveness, then the costs to households are transmitted in ways of, first of all, workers losing their jobs, reducing their spending and things like that. That is a very complex picture. I am an economist and I am not a technologist, so I am not going to pick out the best technological pathways. What I am concerned about is how we do things in a way that impacts the continued prosperity of the Scottish economy. Ideally, I was one of the Scottish Just Transition Commissioners. We should not be looking just to sustain what we have now. There are a lot of inequalities in our economy and in our society. How can we work in ways that start to improve them? The metrics that we need to look at are the ones that really concern people's lives. Jobs, not just the number of jobs but the quality of jobs that we have are easy for people who are at the moment working in carbon intensive sectors. I think that the UNS data has shown that that is often a lot of people from low-income households who are working in more carbon intensive jobs. That accentuates the challenge of ensuring the Just Transition to make sure that workers can transition. You are looking at quality of jobs, level of wages and training opportunities for people to be more mobile. We are looking at earnings as well. There is really a need to keep an eye on what is happening to the income levels from different sources, not just employment income. What is happening to the income levels of different households? Crucially, while that is the UK metric, what is happening to the cost of living and consumer prices as a result of how the green economy expands and where we are getting costs being passed on? That is a complex challenge. If we think about, for example, if you ask the petrochemical industry to pay more, even in a global sense, what that is going to feed back to is that there are so many things that people presume from their toiletries, from the way their food is packaged, from the way their food is produced. Furniture in their houses is all kinds of things. If those costs start to go up, that introduces a wider concern. We have been very vexed with energy poverty, but that is to do with energy bills. When we start to move into a space that prices are going to inevitably have to rise, carbon poverty would cover a wide range of goods and services. I think that we need to always have a primary focus on metrics that concern people's ability to earn a living and what it costs them to live. Before I bring in other panel members, I just wanted to ask you about the key metrics that you covered. Is there a consensus among policymakers in Scotland about what the key metrics should be, what should be focused on, or is that a debate that is still being had? I get the sense that the answer without pre-empting it is probably the latter, that there are not yet settled key metrics, five or ten, that are central to this and agreed by most policymakers? Probably you would have a broad consensus on a higher level of the types of things that need to be monitored, but I think that you are right. There needs to be discussion and debate over locking down and tying down what are the specific things that we need to monitor and how we are going to monitor them. Crucially, how are we operating in the devolved context? How do we identify what causes what and what is under the control of decision makers within Scotland so that we can track how things are changing and understand why they are changing? It is not just a question of identifying metrics, it is trying to identify metrics in a way that they can be tracked and effected. Let me ask the same question of either Tony Rose or Professor Ian Docherty on behalf of the Infrastructure Commission. I would like to make some remarks about the transport sector, which is the area that I am most heavily involved in. I think that this is somewhat different because we know the problem that we have to solve and that problem is the level of car traffic in the economy and reducing that level of traffic. At the moment, transport emissions are roughly 40 per cent of the overall inventory of that, about 40 per cent of the 40 per cent are allocated to traffic. Of course, that number has been pretty stubborn and has not produced very much at all. I am giving some of the impacts of the pandemic that we have seen where car traffic is now higher than it was before Covid and we have seen this explosion in the use of light bans in particular as the economy moves even further towards online retail and home delivery. There are lots of trends that are in the opposite direction to that, which we would like to see. I will answer your question directly about the metrics that are crucial in holding the Government to account for the targets that are set. I would point you to the 20 per cent car kilometre reduction target. We absolutely have to achieve that and I think that it is important to recognise that that target is derived from academic research that shows even if we are able to decarbonise the road vehicle fleet, completely because of the embodied carbon in the vehicles themselves, we will have to do with a smaller fleet in future. That 20 per cent car reduction target over the next decade or so is absolutely crucial. I would also say that it is important that we focus on the interim milestone targets that we have for 2030 because our trajectory to the 2045 targets will be well set by then. There is always the danger of back loading in the assumption that technological solutions will come along in the next five or ten years to fix problems rather than having to do the more politically difficult and behaviourally difficult changes to everyday life, which our carbon targets will require of all of us. The opening remarks echo a point that Professor Turner made about the key issue of who pays for the process of decarbonisation. At the moment, we have a transport system that embeds inequality in the economy and arguably a lack of productivity in the economy because of the domination of road traffic and road traffic in particular places and created by particular sets of people doing particular sets of things. My own view is that we will not get anywhere towards our transport decarbonisation targets unless we have a proper and agreed system of road pricing. That is inevitable given the shift away from fossil-fueled vehicles in any case because, from the Treasury's perspective, that revenue stream will have to be replaced with something else. However, how that happens is deeply challenging but also an opportunity to change how we organise the transport system, who pays for different aspects of it and more clearly relates who pays to who benefits most from the system. I do not underestimate the difficulty of doing that. For one moment, particularly as Professor Turner says, the issue of pricing remains a reserved matter by and large and there are on-going but very stuttering conversations between the UK Government and the devolved nations on those issues. In a sense, it is a classic multi-level governance problem where the incentives for agreement are not always as clear as we might wish them to be. Professor Docherty, let me ask the same question about key metrics and key policy initiatives of Brendan Callaghan. Brendan, I appreciate it's early days in terms of the setup of environmental standard Scotland. Do you have anything to add to this discussion at this stage? Thank you, convener. It is very early days and we are a brand new body set up by the Parliament earlier this year to help with scrutiny and ensure compliance with the effectiveness of environmental regulations and laws. It is early days for us and this area is certainly an area that we can have a role and we can start to contribute. At our point of setup, we haven't identified an immediate list of priorities because we want to be able to respond to the representations that people come to us with and the work of our own analytical function. Just some quick thoughts on perhaps some obvious priorities, but the climate change emissions reduction targets and climate change act clearly identify the main sectors. You've already heard transport mentioned. Land use and industrial emissions are the two other areas that are going to be very tricky to reduce in line with that. It would be obvious areas to watch in an annual basis to see how the progress, whether that keeps track with the pace that is needed to get to the interim measures and the final 2045 net zero target. Professor Docherty, I would like to come back to one of the matters that you highlighted, the target to reduce the distance travelled by car by 20 per cent by 2030, which will require a reversal of a very long period of increasing car use. You touched on that, but I'd like to get your further thoughts on the behavioural change that will be required to achieve that target. Are we or are Governments doing enough to set the scene? Are Governments doing enough to help the public to understand why significant changes in behaviour will be required? The issue is obviously at the front of everybody's minds because of the scale and immediacy of the challenge of our decarbonisation targets, but it has been one that has been explored in research and literature for several decades now. That is the classic question about the balance between what are termed the carrot so improved alternatives to the car and the sticks, which are making it harder to use the car for some trips, whether that's parking policy or whether that's other words of pricing. Politicians of all stripes, for obvious reasons, are much more comfortable speaking about the carrots than they are about the sticks. However, if you look at the history of our attempts to shift travel away from cars to other modes, the carrots have relatively little impact. The growth in car traffic has proven to be pretty resilient over the years, albeit with a moderation in the rate of that growth in the 2020-10s. However, as I've already said, I'm very worried about the way that the pandemic has the potential to set us back on some of that progress. If you look at the moment, the public transport pattern is still heavily depressed in comparison to where it was before the pandemic. Car traffic is back to normal to the same overall level as it was in the pandemic, in some cases higher, and the level of commercial traffic is higher. The baseline is very difficult. The direct answer to your question would be no. I don't think that there is any government anywhere that's doing enough to prepare people for the level of change that meeting our carbon targets means in terms of how we all travel around. We know what that means, though we know about the transport hierarchy that starts with reducing the need to travel in the first place. There's a lot of really important research being done at the moment to understand what the long-term impacts of the ship to online working, the potential to embed that and to reduce business travel and other trips, which we can substitute by this kind of virtual meeting. We need to understand and mobilise that much better, but we also need to make sure that the number of optional trips that can be made by other modes are maximised. That's where policy interventions such as the now famous 15 or 20 minute neighbourhoods, where we have to very quickly address the inheritance of our planning policies over the last few decades, where it's become difficult for people to fulfil their everyday needs by walking and cycling. That needs to be a very important focus of government policy in the immediate term. Thank you very much. A very brief follow-up for me. My question relates to the relevance of annual targets on the way to meeting the 2030 and 2045 targets, which are obviously some way off. You mentioned that progress against those targets might not be linear in the sense that difficult decisions might be put off in the hope that technology and improvements in technology might bring some of the solutions. I wonder if you could elaborate on that in terms of the implications for public policy and what difficult decisions do you think have to be taken in the next one or two years? I think that if you were to ask most people, most members of the public, about their understanding of the debate so far, they would understand the challenge of decarbonising the transport system as moving to electric vehicles or other alternative fuels such as hydrogen vehicles. The point of the traffic reduction target that I've already set out is that we cannot achieve our decarbonisation targets for the transport sector as a whole solely by changing the vehicle fleet. We have to reduce the overall level of travel and we have to make really radical changes to the model split of how we travel around, so that means rebalancing the number of trips between the private car, van, traffic, public transport and the active modes walking and cycling. I really do fear that there is a crowding out process. A lot of government communication is about the provision of electric charging points, about a strategy for electrification of the vehicle fleet. A lot less of it is preparing people for having to change their own personal behaviour and adjust how they make some of the trips that they have as part of their everyday life. It means that we will all have to use all of us that have our cars available to us. We will all have to use them a little bit less in future and we will have to do some more of other things and again to answer your question directly. No, despite the best of intentions, I don't think that the scale of that challenge and what that means for each of us as individuals is anything like adequately communicated to the public as yet. Thank you very much. Let me bring in Fiona Hyslop, please. Thank you and good morning. I want to focus my question on infrastructure, so if I can come to Mr Rose first, Professor Dockty might want to come in on this as well. The issue of the infrastructure commission and its view on existing infrastructure and its presumption against new infrastructure was quite a powerful statement. The first focus has been on new building standards or things that are new. I want to ask you what needs to happen to ensure that that recommendation is delivered and is the Scottish Government implementing the recommendations on presumption against new infrastructure in your view? Thank you for the question and thanks for the invite to come today. In terms of what the commission recommended in terms of achieving net zero and an inclusive economy, it published its infrastructure investment plan early in the year in February. As part of that, one of the key tenants of that was the investment hierarchy. That investment hierarchy had looking at existing assets and what you need from them through to then investing in you at the bottom of that hierarchy. It was encouraging to see that that approach was being taken at a level of principle. In terms of working practice to get there, it is turning a lot of policy thinking on its head and that will take time to roll through. In terms of promoting that recommendation from the commission, that was a good start in that infrastructure investment plan to articulate that hierarchy from looking at what you already have. There is not a need to not build new things but looking at what you have best was part of that hierarchy that the Government put forward in the infrastructure investment plan. On transport, we considered whether we should recommend a complete moratorium on new road building. There are one or two schemes in Scotland that you can still argue would be effective road building schemes if they do not add any more capacity to the network overall. The scheme that comes to my mind is some form of bypass for Dundee when there are lots of opportunities to reallocate road space along the Kingsway and to do a lot of urban repair and regeneration using better public transport along that corridor. Unlike Wales, we did not recommend a complete moratorium on road building because we thought that was inappropriate. However, we were quite strong to say that what we should not do is promote the idea that we should continue to expand. The overall capacity of the road networks was very pleased to see that adopted by the Government in some recent policy statements about the focus being on the resilience and the performance of the existing network and not its expansion. Scotland has gone through a very welcome period of expansion of the railway over the past couple of decades with notable reopenings of routes and stations. I think that that is going to be much harder to continue given the scale of the decarbonisation challenge that the rail sector faces and the scale of electrification that will be required in rolling stock renewal. I think that many people are of the assumption that new railways and new stations are going to come along over the next 15-20 years at the same pace as we have been able to deliver them over the last equivalent period, but I fear that that is not going to be the case because of the scale and the size of the decarbonisation task that is ahead of us on the rail front. The second question is mostly about the incentives for building reuse in particular and what investment or incentive mechanisms are needed to maximise the economic and resource opportunities of transitioning to the circular economy, certainly for materials, but for building use. I wonder particularly in relation to our experience of Covid and looking at city centres in particular whether, as part of that Covid green recovery, better use or different use of existing buildings can be part of that growth. What do you think that the Scottish Government can do to incentivise reuse of existing buildings? Secondly, would you like to comment on the consensus in Scotland that zero-vac rating for retrofitting of existing buildings would actually be an economic incentive for recovery as well as reusing existing buildings? In terms of what government can do around the reuse of buildings, it is a bit bland but there are already initiatives out there in terms of a net zero building standard that has been promoted, and that is a really important part of particularly public buildings but other buildings. It sets out what you can do to design a building and require a building to make it get to net zero. Having that in place, a lot of this is new to owners of buildings and others and having a standard and a guidance that allows them to understand what they can do to get their building to net zero is really important. I often mention hydrogen earlier about different choices of fuel and use of that energy. The hydrogen element is about reusing gas networks. That is a complicated process but you need to build in the whole value asset value of those things and allow the owners of those assets to see why investing now for repurposing and reusing can be a really important part of their approach. Thinking about that whole life investment asset value and building that in and providing guidance allows them to see how getting to net zero is financially as well as net zero positive for them is an important part. There are already moves in place to do that but there is clearly more to be done on that front as well. Do you want to say anything about the use of existing buildings in cities? Is that helpful or not in net zero or is that just a necessity of life post Covid? I can kick off and I'm sure we'll come in as well. I think from the work of the commission that the repurposing and reusing of buildings in city centres is a vitally important component of what we're seeking to achieve here. As Covid has sort of accentuated that requirement, if people aren't working in cities as much, repurposing those assets and making them places to live or making that environment in city centres to be more viable from a living and working combination is vitally important. There are already trends around offices that aren't being used as much as being repurposed into residential dwellings and that does two things. It enhances a city centre as a living place but it also means that you are repurposing those assets rather than knocking them down and rebuilding them. There are good examples of that happening already in the country so it's a really important part of what the commission was saying and Covid has almost accelerated the implementation of that. Professor Docherty, I'm conscious that people are not biting on my vat issue but there you go. Professor Docherty, I wasn't aware that there was a consensus on the vat issue but I think that for me this by no means my area of expertise but the gradient between the lack of that on new buildings and the application of that to the materials that's used to refurbish existing buildings is a long running issue and I think I'd certainly be in favour of doing something about that. On the transport and statistics front I think I'd say a couple of things. It's a truism that for probably as long as we've measured these things so for a century or more, we travel around more or less the same time that we've always done and we travel around the same time to do the same things that we've always done but as transport technologies improved we've travelled further to do the same things. That's what you've seen of decades and decades of net decentralisation from cities as the car has become an ever more dominant part of the overall mobility mix. Therefore it's obvious that if we want to reverse that and if we want to reduce the level of overall car traffic we have and therefore emissions from transport then we should reverse that. So if we're going to continue to spend the same time travelling to do the same things then we have to travel shorter distances and re-using buildings in city centres where or town centres where the majority of services that people rely and depend on are easily available to them by walking, cycling, public transport is pretty much as close to a no-brainer in a policy sense I think as you can find however. This comes back to the point about pricing that I made earlier. I'm really concerned about the potential for a renewed gradient between how we price and how easy it is to travel around and access city centres versus suburban and out-of-town service areas. So city centre football we know has collapsed, we know that that's driven by a lack of public transport commuting and we know that's because the people who are most likely to have used particularly the rail network to access city centre jobs are those that can do them from home. So I think that the reception space on that now is quite well established and of course we need to see how the rebound of that will unwind over time. However as long as we still fail to price properly trips like taking your 4x4 from a suburban location to an out-of-town shopping centre and creating that kind of traffic as a double one for existing town and city centres we'd be concerned about that in academic research in the professions for decades. I think that the risks now of us desperately trying to reinvigorate our town and city centres whilst even more of that activity graduates to out-of-town retail and service centres now with all the implications that has for equality of access for people that don't have a car. I think that that's going to be a really difficult short term problem that bold policy interventions and I would argue pricing are going to have to address. Mark Ruskell, to be followed by Collette Stevenson. Thank you. Good morning to the panel. Can I start with Professor Docherty? I wanted to ask you about your report into the future of rail post the pandemic. I mean it remains quite controversial because I think one of the recommendations in there was that there should be a reduction in revenue requirement and clearly that has raised alarm bells with staff unions and those who are concerned about cuts to services that may come on the back of that. I guess I wanted to ask you about whether you see a reduction in revenue requirement as being compatible with designing a rail service which is competitive with private car usage. If I can just give you a very quick example of that, I held a public meeting last week where ScotRail were telling the public about the proposed changes that they want to make to the rail timetabling and it's arguably this has come on the back of your recommendations to government. They described the Perth to Edinburgh rail service as effectively not being competitive with the private car and they were describing how you can get across the M90 and Queensfree crossing cheaply. So their response to that is to effectively say well in that case it doesn't really matter if we increase journey times because very few people are using that rail service anyway. So I just wondered if like what your thoughts are on you know the compatibility of reducing that revenue cost with maintaining competitive services and is there not a danger that if we cut too fast too hard then effectively we just end up with service that people are not going to use anymore because there's nothing left to use. So thank you for the question and thank you for the opportunity to discuss the report. I should say I'm flattered by the attention that's generated and if only I had that level of direct influence over the decisions of ScotRail. I'd like to point you two things about the report. One is based on the evidence that myself and colleagues have been collecting as part of a very wide cross Great Britain research project on the impacts of Covid on travel behaviour. That study will continue for another couple of years now as we seek to better understand a lot of the longer term trends and particularly the impact on public transport as it's reflected in this report. One of the key recommendations I made and this doesn't seem to be picked up of course in the dash for a headline is that there is no credible decarbonisation pathway for transport. I can see that doesn't involve a very much greater level of use of the railway in Scotland than that which we had before the pandemic. So in the report I made some guesstimates about what the scale of that increase might be based on what might be seen as achievable shifts from the car to other modes and also from physical transport to online meetings or home working. The headline is that it's reasonable to assume that we should plan for a doubling of the number of passengers on the railway as opposed to pre-pandemic. I think that if we plan for that then we can get towards net zero and the decarbonisation of the transport system. The question then becomes as you rightly point out. It's effectively a kind of bridging challenge, isn't it? How do we get from this crisis situation we have now where railway passage is still only about half what it was before the pandemic and revenue also is roughly about half what it was to a system or situation rather where passage, perhaps not revenue for reasons I've come onto, but passage is double what it was before. So it's a bridging issue. I think that there are some difficult issues that the railway industry and by extension ministers who fund it have been grappling with again that haven't perhaps had the airtime that they might deserve. First of all, the rail network isn't actually used very much and particularly where we have a lot of expensive rail networks. So again pre-pandemic, even in the Greater Glasgow suburban network, which is often lauded as being the best outside London and the UK, et cetera, something like, you know, I think it's fewer than a half of all adults used the train once a month. We have had this asset, which is grossly underused, and the main reason that's grossly underused, and again I point to this in the report, is because of the different level of pricing and back to the question that Professor Turner raised earlier on about who pays for the transport network. Frankly, driving is too cheap. Public transport tickets are too expensive and too complex, and that's the reason that more people don't use the railway. So I would argue that that's the root cause, and if we want to really address batteries recovery on the railway, given all that we've talked about, about the decreased activity in city centres, et cetera, et cetera, we will not do that to the extent that we require to do if we don't get a grip of the pricing structure across all modes of transport. That means who pays, and that does come back to the core issue about how we price car travel, because I think just about everything depends on that. I don't envy people in ScotRail or ministers. Part of the problem with service reductions that the operators are grappling with, of course, are the direct operational impacts of the pandemic and what that's meant for the availability of staff, and particularly drivers, and the expense of driver trading, and a whole set of difficult operational issues. One thing that I would also say is that the rail network, as it stands now, has only had so many services, so many seats and so many people employed in it for relatively a very short period of time, so even if you go back to the start of the current franchise period and I've looked up some of the statistics here to make sure I get this right. Since 2015, we've had a 4 per cent increase in passengers, about a 20 per cent increase in seats, an 8 per cent increase in the services that were run on the network, and a 22 per cent increase in government support for ScotRail. We've been spending a lot more money for not very much more in terms of service output, so I don't think that a recalibration of the ScotRail timetable is necessarily as much of a difficulty across the network as a whole is being made out. Of course, I understand that there are differences in different routes, in particular users whose services are affected, and that, of course, is true. The final point that I would make for follow-up questions is that ministers are in a situation where we have a devolved financial settlement and unless somebody has changed the legal basis of Scottish parliamentary spending and we've all become modern monetary theorists overnight, the budget still has to be balanced and the revenue budget across all public services, of which ScotRail is effectively one even in advance of the nationalisation of the operating company. Ministers have a budget to spend on public services. If you look at how much the railway costs now for the relatively small number of trips it provides now, in comparison to the pressures that particularly the health system is under, I think that it's entirely justifiable and indeed I would expect ministers to open up the question about where value for money across those public services is best found. That's a really difficult set of questions. Yes, that does shine a light on the very large revenue support that the rail industry has enjoyed, an increasingly large support over recent years, and those are really difficult political questions, and that's what you see played out in the media every day, but I think that it's very healthy that, at long last, we're actually having that conversation. OK, thanks. Can I ask you in terms of revenue income? I mean, your own research that you're involved in is pointing to the fact that we might not know what rail patronage is going to look like for another 12 to 24 months. I'm just wondering if now is the right time for ScotRail to be doing a timetabling review when we don't actually know what that long-term trend is going to look like. I mean, I'm on the train every week, and I kind of marginally say a few more people coming on each week, but it's not really clear if it's going to go back to the kind of levels of patronage we saw pre-Covid, which were, well, the trains were completely packed. Well, again, I have no responsibility for setting the timetable, and so I'm lucky enough to be able to write a report and give some advice in the period meetings like this, which I hope that colleagues in ScotRail will listen to. I think that they've said publicly that the timetable recalibration, which is under way, is a new baseline and that services will be added to that as attributes recovers. I think that we'd all welcome that. I also would say that I wouldn't underestimate the operational difficulties, particularly ensuring that the availability of drivers, given the hiatus and driver training that they've experienced over the course of the pandemic, make some pretty difficult operational decisions which engineering and ops colleagues in the railway industry have had to deal with over that period. The timetable recalibration is a really crucial and difficult and controversial process, but it's driven by a whole set of complex variables, one of which we haven't mentioned yet is reliability, because we know that reliability of railway services is perhaps equally as important as frequency to many people. Pre-pandemic, the predecessor to this committee, spent a lot of time looking through the reasons why punctuality on the ScotRail network had fallen, as indeed had happened in many operators across the GB network, and the answer to that was that we were trying to shoehorn more and more and more services on an infrastructure that really couldn't cope with them. In many respects, I think that this is the ideal time to be doing this. Again, I would agree that that does open up some really difficult questions about the impacts on individual routes and value for money. I would say that the bringing end of the operating company into the public sector is going to shine an even stronger light, I think, about the value for money that we get from the railway network as it's currently contributed. What are the opportunity costs of not spending that on other aspects of public services? Of course, that's the way that the annual Scottish budget is formulated. As I'm sure you all know, when you're requested to make proposed changes to budget, you have to think about the impacts on other spending lines across. I think that that's a really healthy debate for us to be having. Again, I'd say that the most important discussion that we've got to have as a result of that is about how the overall transport system is funded, who pays for it and what that tells us about how well it serves our communities. Thank you. We're certainly debating it intensely at the moment. Can I move quickly on to ESS and Brendan Callaghan, something completely different? Obviously, as an organisation, you've now got your draft, sorry, your interim plan, strategic plan going forward. I wanted to ask you about whether there are some key areas that you're going to be focusing on in the next year. I'm aware that there are particular concerns around the marine environment, compliance with existing laws and regulations, the adequacy of some of our laws, particularly in relation to salmon farming and to fisheries licensing. I'm aware that there are complaints that were in with the European Commission ahead of Brexit in relation to acoustic terrant devices, for example, in the marine environment, which presumably now will go nowhere. I'm interested in, is that an area that you're really focusing in on or other areas that are problematic in terms of compliance and the adequacy of our existing laws and regulations? Okay, thanks very much for that question. I would stress that it's very early days for us, we're established as an organisation on 1 October, so we haven't taken any formal decisions about the topics we'll be investigating at this point. However, marine and the wider concerns about the regulatory environment, that is something that's been brought to our attention in formal discussions that we've been having with a range of bodies so far. It is one that we're, I guess, at a pre-investigation stage of looking at the wider circumstances around that and start to understand if that's something that we could look at. In the development of ESS over the last six to nine months, we have made our presence known and we have been starting to establish these early relationships. I think where we're actually at is that a lot of bodies have their concerns about a range of matters and they're probably keeping their power to dry until we're actually here and we now have our powers and are formally established. We're starting to get a stream of inquiries and a stream of issues coming to us. As I said earlier in my introduction, it was a conscious decision that we didn't want to arrive to say, for the first six months, this is what we're going to be doing. We're still really putting in place our capacity and we want our early focus to be informed by these discussions with expert bodies and the issues that people come to us with. We've been talking to bodies environment link, RSPB, the coastal communities network and they've been flagging a variety of issues that we're going to start to be sifting through and considering where we put our resources. In terms of your relationship with the UK climate change committee, it was something that we discussed a lot during the passage of the continuity bill and how that was going to work. How does that look now? Do you have a memorandum of understanding? Are you clear where you can work together and where you have discrete responsibilities? We're absolutely heading for a memorandum of understanding. We've had a formal meeting with them to discuss how that might work. We know their input and responded to the consultation on the draft legislation. It's looking like a very productive relationship. They have a role as an adviser. They're experts. They do research and analysis on the role of climate change policy. We have a role there but we also have the powers of compliance and enforcement. We'll capture that in a memorandum of understanding over the next couple of months, which will be on our website. People can have a look. Essentially, we want to avoid duplication. We're not going to be doing research or analysis in areas that they're working on, but we want to be able to feed off the work and the issues that they identify. They might be advising Government on the one hand of problematic areas or areas where progress has not been made, but that might be useful for us to identify areas where, behind that, there's lack of compliance or there's an ineffective law that we could perhaps take action and investigate with the authorities concerned. Liam Kerr has a brief supplementary in this area to be followed by Collette Stevenson. On the powers of enforcement that you mentioned, I'm right in saying that the ISS cannot impose fines for breaches. Does the ISS have sharp enough teeth? No, we can't directly impose fines but we do have, for example, if it was a straightforward matter and we issued a compliance notice, we would actually hope to be able to resolve these matters through dialogue and through agreement with the public authorities concerned. But if we issued a compliance notice, for example, requiring them to change the procedures or adopt a different approach, and they didn't comply with that, the legislation gives us the ability to go to the court of session. The court of session can either require that those actions are implemented or they can treat their matter as a contempt of court. In that situation, fines or other other court action could ensue. We think that we have teeth and we have adequate powers but time will tell and you'll obviously be able to see yourselves how that goes. That's very interesting, thank you. Thank you very much. Liam Kerr, Collette Stevenson to be followed by Monica Lennon. I wanted to talk about or ask you some questions around adaptation, obviously adapting to climate change, you know, regardless of how swiftly our emissions are cut or hopefully are cut as we go forward. I think I probably drawn Karen on this is what are the costs of actually adapting and becoming more resilient to climate change and how do you think these should actually be born? I'll say up front that most of our work has been looking so far at the cost of mitigation rather than adaptation, but I think the general question of how should the cost be born. I think the challenge here is that, as I mentioned earlier, there's often a kind of model where a polluter pays model. You see a way that's often thought as the kind of model or the appropriate way to pay for something. The problem that we have though is that wherever people or bodies can, they will pass on costs that they're having to bear. If you charge a polluter, you'll see the prices going up. I love watching people on the television when different issues come up and there was a guy a couple of weeks of what the petrol pump said, and he said, will we end up paying for it, whatever happens? I think that there is a heavy dose of truth to that, that you have to be careful and it's about the distribution. You have less control when think costs are passing indirectly and they're going on to consumer prices. I think that's what often brings the argument back to do you need to look at taxpayer burdens because then it is more controllable over who is ultimately going to pay for things. Particularly where there really needs to be concern over the people who are least able to pay for things carrying too much of the burden. There are concerns there where you do taxpayer burdens that we've seen through the Covid crisis. Whenever better off people are spending less money, the people whose jobs are at risk are the lower income people and that's something you always have to caution about. Before you ask how should we distribute the burden, we really have to think about what are the outcomes that we're concerned about. Going back to the just transition, where do we want different groups in society to be at the end of all of this with particular concern over those who are less well able to pay? For citizens who are also electorates, I think that they are going to be content with whatever happens here. That's where we need to start. We need to ask the picture of what do we think we want our net zero society to look like. Yes, we're going to have to pay more. We have to think about how that's going to be distributed and then we have to backtrack that up to where we've got stuff to pay for. How are we going to make sure that that's paid that we get to the outcomes that we want? I'm hearing a lot more of this kind of theory of change and I think that we really need to start applying this where you look at your outcomes. In Scotland, it's a different electorate, it's a different society to other parts of the UK. We really need to look at what do the Scottish people want the Scottish economy in society to look like when we get to net zero. Based on those outcomes, that's how we need to figure out how we're going to pay for all of them. If not, the law of unanticipated consequences might mean that we have the best intentions for how we set things out but how the costs are ultimately passed on through various mechanisms in the economy that can give us outcomes that are not desirable and will ultimately equate to a transition that is not regarded as a just one because that is the key thing. Academics like me can sit down and say what is the just transition and define it but at the end of the day, the transition will only be just if the people have viewed it as such. We really need to start with where do we think we want to be and that's perhaps a bigger, wider debate but we've got COP26 coming to the city. Rather than having a public debate with apologies because all those areas are important about cars and emissions and how you heat your home, why don't we have a debate about a discussion about what we think we want this country to look like when it's net zero? We can potentially have a role in adaptation. We obviously have to have an eye on what the legislation requires and the role of public authorities in delivering that. I mean, I don't have an awful lot to say in this one at this stage because that's something that we need to look into in quite a lot of detail as to where could we use our own ideas to do that. For example, if a matter was drawn to our attention about the unfairness or the lack of a just transition on something and we don't have an awful lot to say in this one at this stage because that's something that we need to look into in quite a lot of detail as to where could we use our powers and our role to influence this. For example, if a matter was drawn to our attention about the unfairness or the lack of a just transition on something and we identified that that was essentially the law was being ineffective in having an unintended consequence and it was broadly an environmental law, then certainly we could either go to that public authority or go back to government and draw that to their attention in quite, shine a light on that in quite a formal way. That's probably all I need to say at this time. So, and just finally, thanks. Just finally, it is to do with regards to the actual publication of Scotland's adaptation programme in 2019. Where has the most notable progress been made so far and where are the areas of greatest concern? And I think I'll ask Ian Docherty on that, I think. Thank you. I think what I'd point to there is something I said earlier on, which is perhaps the built-in expectation that we will continue to build as much new transport infrastructure as we've been able to do over the last 15 to 20 years. So, we've already seen the impacts of climate change on the transport network, so the rest would be thankful is the obvious example and of course it remains to be seen what the final outcome of the inquiry about the drearmine stone haven were, but there's another example of extreme weather events which we expect to become ever more complement place as climate change unfolds and the catastrophic impact that that can have on infrastructure and infrastructure failure. So, I'm very taken by something that Professor Turner said there about the transition will only be just if it seemed to be just in the court of public opinion, is it where? And again, I'm not sure that we're all ready for a period of the redirection of resources much more towards increasing the resilience of our existing networks rather than building new ones. Again, that shift has been long talked about in the analysis and the academic research on the likely futures, but I don't think that's percolated through to the public debate yet. So, when you add together the fact that a lot of our infrastructure remains aged in the first place, it was up for major renewals in this debate about the structures on the M8 through the centre of Glasgow that are 60 years old now in the long-term future that they might have. So, you've got the existing fragility of the infrastructure, how it will need to be made more resilient for increased extreme weather events and other implications of climate change, and then on top of that, the requirement for decarbonisation through electrification of either vehicles or the fixed network. When you set out that kind of sequential set of requirements, I don't think it's hard to see that we won't be building as much a new kit as we've done in recent years, but again, I'm not quite sure the extent to which that has made it into the public understanding of how our public expenditure choices by necessity will have to change over the next 15, 20 years. OK. No further questions, convener. Thank you very much. Monica Lennon, to be followed by Jackie Dunbar. Thank you, convener. Good morning, panel, and good morning to Professor Turner's cat who made a nice appearance a moment ago. Can I return Professor Docherty to your report? Mark Ruskell has asked some questions already, and I think that you were very modest about the attention that reports receive, some of the headlines. After all, you are a former non-exec director of ScotRail and Transport Scotland, so you are a person of influence. Your report is right that Scotland's rail network has a central role to play in meeting Scotland's climate change targets. I think that you also made the important point about, I've lost my notes here, what you said about making that shift from the car to train. What I'm not sure about—I think that this is where the public are confused—is that if we're going to try and meet those climate change targets, how will the proposed service cuts, proposed closures of ticket offices and job losses help with that? Surely those kinds of measures will make it more difficult or make people feel less safe, less secure and that it's less accessible to them and run counter to the race to net zero. I just wonder alongside that, because there are concerns about the quality impact of some of these proposals. We're hearing a lot right now in the media about women's safety, but also I hear a lot about the rise in hate crime towards disabled people, towards people of colour on our railways. If we want to affect behaviour change and give people the confidence to get on the trains, how will all these cuts help with that? Thank you for those comments. Those are complex issues, so I'll try to piece my way through them. If you take any reduction in service cons to your quality in isolation, it's obvious that that is likely to have a difficult impact on people that depend on the service. I don't think that anybody is arguing that that's not the case, but there's some really crucial context here. First of all is that we've had a massive growth in the proportion of public expenditure allocated to the railways in recent years and indeed the numbers of trains that we have. So a modest retrenchment in the overall numbers of services, it's not as if we're going back to the 1960s or 70s in terms of the overall level of service provision. We're going back to probably where we were in 2015 or 2016, with about half the number of passengers that the network would have been expected to have. Those are the facts and you're absolutely correct to say that they present some really hard choices and hard choices to me are always about opportunity costs. I come back to the point about what we would expect our ministers to do with the public expenditure that they have available to them and what are the best outcomes for the public that they should expect from those decisions. I've been quietly warning in public events and also within those roles that you identified. I've held in the rail industry for many years now that at some point the relentless growth in the amount of public expenditure allocated to the railways would come to an end because nothing is forever. I didn't expect it to be Covid, as I don't think anybody expected the pandemic to be the exogenous shock that delivered this, but it was a fair assumption that at some point that continuous growth in the resources available to the network would slow or stop or reverse. In many respects we're dealing with the consequences of that now. I understand exactly what you're saying about the equalities aspects of all of this and personal safety and the general quality of the experience of being a traveller on the network. Those are issues that are common to every equivalent railway network across Europe and the world. There are a set of choices about how resources are deployed to meet them. Our network hasn't changed very much in comparison to many equivalents across Europe. It's still a traditional heavy rail network, crude in a way that looks the same as it's done for a long time, with stations that look the same as they've done for a long time, with ticket retailing options that by and large look the way they've done for a long time. I've designed lots of other equivalent rail networks in Europe that have made different choices to modernise those and have better outcomes. One thing I would say about safety is that by far the best way to improve the safety for people that use the network is to have more people travelling on it. Then we have to come back to the root cause of all of this and how we get more people travelling on the network. Of course I understand all the concerns that have been raised in response to the questions that I think need highlighted and need discussed. The impacts of the attractiveness of travelling by train that what ScotRail is proposing if they are enacted. Let's assume that they are as negative as you put forward. They are absolutely dwarfed by our inability to get to terms with the low overall use of the railway and back to this question about who pays, and the fact that we have set up a fiscal structure of the network and encouraged by it. I'm making this more so now, post-pandemic. That means that there are far too many people using cars when they could be on a bus or in a train. I come back to that statistic, which I have to say shocked me when I heard it the other week, about a minority of adults who are in the part of the country covered by our best railway system have used it once in the last month pre-pandemic. If we are going to fix the service quality issues that everybody is concerned about, we have to have a step change in the use of the network. That requires really far-reaching questions about whether it is fit for the travel patterns of the future rather than the travel patterns of the past. I found my notes from earlier when I was scribbling down what you were saying in response to Mark Ruskell. You talked about having a plan for the doubling of real passengers. I'm not sure if that plan exists, but I'd be interested to hear what you think it should include. I'm going back to public confidence and public mood, because clearly during the pandemic people were advised not to use public transport if they were travelling by car, not to car share. How do we, in terms of public messaging, try to shift that advice? I haven't really heard a lot of new advice to tell people to get back on the bus, get back on the train. We're seeing, obviously, morale very low amongst key transport workers including rail workers. We're seeing industrial dispute. We're seeing possible strikes increasing during COP26. How do Government transport Scotland and ScotRail and trade unions cut through all of that and try to find some agreement so that we can get the travelling public back into public transport and out of private cars? Thank you for those questions. I've tried to scribble some of them down, so please forgive me if I miss them and I'll try to go through them. Myself and colleagues involved in the Transport and Covid Research project have already published some of our outcomes on this, both from our household survey work, which is undertaken in 10 areas across Great Britain, some of our focus group work in our interviews with key decision makers across the transport sector as a whole. We have a quote in one of our academic papers from somebody south of the border senior representative of one of the key organisations of the transport sector, expressing his bewilderment when he heard the Prime Minister in one of the early Covid briefings from Downing Street, particularly the message of avoid public transport. For that person, the entire working career had been based on trying to achieve this model shift between the car and public transport that we talked about right at the beginning of the session in terms of the carrots and making the service better. He argued or felt like decades of that work was being undermined in an instant, so I don't underestimate the impact that that's had. Indeed, we're trying to do some work in our forthcoming survey waves to really understand that better. In passing, it's worth saying that Transport Scotland tried to have a slightly different message about keeping the public transport network open for essential users. We could probably discuss all day the extent to which that was successful, but again, I have academic colleagues elsewhere who are doing some work about mesting across Covid and its impact on behaviour. What we have found in our work thus far on the upside is that we haven't found much evidence yet of whitching away from public transport to more car use because people are uncomfortable, either because of the direct impacts of the virus or of the safety issues that you mentioned. What we have seen is that the people who are most likely to commute by train are most likely to have jobs in city centres best served by rail and most likely to be in the kind of jobs where traditionally rail commuting has done well. The same thing is true of cycling, interestingly. The number of people commuting by cycling, of course, in our survey, has fallen again precisely because those people tend to be in jobs where it's easy for them to work at home or with a laptop in a cafe or whatever. There's a set of self-selecting processes going on. On the downside, what's happening is that people have more flexibility in terms of time when they're at home. For example, if I'm sitting at home now rather than in an office somewhere, if it rains at three o'clock and I decide I want to pick the kids up from school rather than getting to walk home, I'm at three to do that because of the cars and the drive. If you look at the traffic use statistics, what you see is that we've had a reprofiling of what kinds of trips are happening. Again, that's why I said earlier on that I worry about behaviours that are being embedded in that we've created, almost by accident, a default, a more North American view where daytime car trips, more school run, more driving to the shops rather than walking to the local corner shop etc. Those things are now more possible for more people because we are not sat in offices somewhere else away from the home. So there's a whole set of really complex behavioural changes there that we have to understand better and we have to try and unwind because they are contrary to what we're trying to achieve. On messaging and how we move forward. It looks like we have a brief table for the issue. Professor Dockry, you cut out slightly there if you could repeat your last perhaps a couple of sentences, that would be great. Sorry, I just moved on to the issue about messaging as we move forward on how to recover patronage. Clearly this is difficult because the lack of use of public transport is driven by economic imperatives for people who would otherwise have used it. So it's the issue about is their job still being done from home or not. I think that it's going to be challenging for the public transport sectors to recover patronage, particularly the way that the rail network is set up to depend on significant numbers of city centre commuters playing. That's going to be really tough to recover and indeed I don't expect the level of city centre radio queuing to recover in the foreseeable future so there are going to be on-going questions about that. I really don't want to get into the issue of industrial action because this is not my expertise and I'm as much of an observer about the relationships between the rail industry employers. I say that this is a member of a trade union and a profession that has its own issues with its own employers at the moment so I understand that context very well. The one comment that I'd make is that it's very instructive to look at the difference in conditions and the way that the sectors have been treated during Covid between the rail sector and between the bus sector in particular and also between the rail sector and again other public services. For example, in the bus sector many members of staff are furloughed, wages tend to be lower, employment tends to be more precarious. There has been a long standing debate that I have participated in in committees of this Parliament and elsewhere about whether the relative split in public support for bus versus rail is appropriate, given the vastly greater expenditure on the rail network for a much smaller relative contribution to overall transport needs. There has been no furlough in the rail industry in the bus and wages salaries tend to be much higher. I think that that is one of the issues that has been exposed by this experience and I would also say that about comparisons between different public servants. A ScotRail ticket examiner, with eight weeks training, will earn the same salary as someone entering the NHS in a professional nursing or McWhiffrey or scientific job who is expected to have a degree. There are lots of ways that you can look at that comparison and one that I would be entirely sympathetic to is that colleagues in our health service who have borne the brunt of this terrible experience are underpaid. I wonder about the bringing in of the rail sector into the wider public expenditure conversation in a more explicit way than it has been in the past and what the unintended consequences of that are going to be. I suppose that that is my semi-informed observer's opinion to say that, yes, I really do hope that management and union sit down and find a way through this because I think that this is a wider issue about how we make sure that the finance of our key public services and the people that work in them is adequately and fairly agreed upon. We are going to move on to Jackie Dunbar, to be followed by Liam Kerr. Just because we are up against the clock, if I could ask panel members to keep answers fairly brief, this is a fascinating topic but we are slightly running against time. I am going to open up my question, if you do not mind, to any member of the panel who would like to answer it. It is to do with the natural infrastructure. Can I ask what are the key opportunities to not only increase natural infrastructure but to also better integrate the planning, the investment and the delivery of natural infrastructure into the other forms of infrastructure planning? I can have a quick take on that one. One of the key opportunities is in the new national planning framework 4. On the back of the infrastructure commission's work, natural infrastructure was included in the Scottish Government's definition of infrastructure, which is pretty monumental in terms of compared to lots of other countries around the world. I think that it is taking a good step and taking on board that. The opportunity of the MPF 4 provides for the first time that natural infrastructure to be considered in the context of everything else that has been looked at in the built environment. I think that that does offer a really good opportunity for natural infrastructure to have a level playing field and to have its place in the way that Scotland plans its infrastructure going forward and fits that into wider policymaking. You mentioned the MPF 4. Can you dig down a little bit deeper about what the key opportunity would be for green and blue natural infrastructure in the framework? On one level, having it on a level playing field with everything else in that context is an opportunity for it itself, because it will be looked at in that same level, whereas it was relatively outside that system, I suppose beforehand. Having it as part of the infrastructure definition and having it considered with transport and energy and others at that same level of importance is an opportunity in itself. It would be interesting to see where MPF 4 gets to in terms of bringing it into that fold. Professor Turner, two questions for you if I may. The Scottish Government signalled an intention to create a national public energy agency and has its remit a focus on heat energy efficiency and delivery of investment. Is that the right place to focus, rather than the traditional energy markets, do you think? I think so, yes, because I think that there very much needs to be a focus on the service, how we are using the energy, because that ultimately determines the demand, what people need and when they need it. I think that there is a lot in this debate about what is essential for different groups and what is luxury and things like that. When we focus in on the types of services, particularly around heat, which is the big challenge that we have yet to make much ground with, there has been important progress in energy efficiency and retrofitting with goals, perhaps without action to catch up. I think that there is a focus on the services. The Government's role there, the public sector role there, really needs to be on delivering the outcomes that are important for people in ensuring that different groups and society and the essential needs for those less able to pay continue to be met. I think that that is the right focus. I think that we already have policy attention in terms of markets through the regulator and things like that. The interventions now need to be extremely well targeted, given the scale of the challenge in limited time. The focus of service is important. The final thing for me, in the papers that you supplied, Professor Turner told us about your net zero principles framework for public policy making. One of those principles is, I am just going to read this, offshoring is not the answer in regional, national or global context if it only shifts emissions, jobs and GDP overseas. That seems to be a very important point and, indeed, very important principles. How much regard do you know, do the Scottish Government take to principles like this and, indeed, this framework? I think that the problem is, and it is a big challenge, is that the targets that we are set under the international climate agreements and what has had to come through the climate act and things like that, there are territorial emissions, there are the emissions that are generated within Scotland and within the UK. If you take it to the extreme, the simplest way to reduce your emissions would be to have all the dirty stuff not take place in Scotland. I have arguably come up with this in the work of the Just Transition Commission. There is a big drop in Scotland's emissions when the steel industry went. However, in our consumption needs, we are still using steel indirectly every day. It is very important that, even things such as our wind farms have a steel requirement, cars and things like that. We raised the issue through OECD negotiators and other researchers more than 10 years ago that are the targets that we have got the right ones, because there are territorial emissions. The answer is that they are the best that we can get, because it has taken so long to get everybody agreeing. It is also very difficult if you went to a carbon footprint measure to measure things properly and consistently, but that does not mean that we do not need to have an eye to what are the implications of what our decisions are. Off-shoring is probably the biggest risk. There is a lot of debate about whether we should be extracting oil and gas from the North Sea. The question for me is, are we still using it? If we are still indirectly using coal and oil and gas, but they are just being burned in other countries and extracted in other countries, that is not delivering climate justice even though we might be meeting our targets. The big off-shoring concern for society is that, when we lose jobs here in order to meet Scotland's domestic territorial climate emissions, we are not only off-shoring the emissions, it means that the jobs in the GDP generation are going somewhere else. That needs to be central. Even though, strictly speaking, our targets and territorial ones in Scotland will do well if it reaches net zero on that count, we need to always bear in mind the wider question of the global climate, even if we are not legally bound on that. For the wellbeing of the Scottish people and the Scottish economy, we are not wanting to be protectionist. Activity should take place at the most carbon-efficient location, but people's earnings and jobs are important, not just from a social sense. If people lose jobs and earnings, we reduce our tax base, which means that we do not have as much money to spend on net zero and other things. It is really important that we are building a strong economy that serves the people, as well as delivering in spirit and in legal terms on meeting the climate change problem. Off-shoring needs to be front and centre and also on-shoring. If we can become a carbon-efficient location with some of the first mover things that we are doing with the carbon capture and storage programmes, if we become the carbon-efficient location, then maybe we can pull more production to that location. That will become somebody else's off-shoring problem, but that is the complexity of the problem, isn't it? I'm very grateful. That brings us to the end of our allocated time. Let me thank once again our panel and guests this morning. You have given us a fascinating range of discussion points to take forward in our work programme. I wish we had longer, but that brings us to the end of our time. Thank you very much and enjoy the rest of your day. The final public agenda item for the committee is agenda item 3, which is consideration of negative instrument number 318, as listed on the agenda for the committee today. I refer members to paper number 3. This is an instrument laid under the negative procedure, which means that its provisions will come into force unless the Parliament agrees to a motion to annull it. No motions to annull have been laid. The Delegated Powers and Law Reform Committee considered the instrument on 21 September and determined that it did not need to draw the attention of Parliament to the instrument on any grounds within its remit. Do any members of the committee have comments on the instrument? There are no comments. I therefore invite the committee to agree that it does not wish to make any further recommendations in relation to this instrument. That is agreed. Thank you very much. The committee will now move into private session.