 Good morning and welcome to everyone. This is the second meeting of the Economy, Jobs and Fair Work Committee in the fifth session of Parliament. May I in particular welcome the cabinet secretary and the minister who are with us today. Perhaps the others present could introduce themselves. I'm Simon Fuller. I'm Deputy Director in the Office of Chief Economist. I'm Rachel Gwion. I'm Deputy Director Enterprise and Skills Review. I'm Andy Hogg. I'm from the Scottish Government's oil and gas team. Perhaps I should say that the cabinet secretary is Keith Brown and the Minister for Business, Innovation and Energy, as Paul Wheelhouse. My apologies, of course. You do have names as well as the positions that you hold and for which you're here. I understand that both of you are able to give us a brief summary, as it were, of your position prior to moving into the evidence session. Perhaps I could ask, first of all, Keith Brown, the cabinet secretary for economy, jobs and fair work to speak to the committee. I thank you for the opportunity to come along this morning. I also congratulate you on the position of convenership of the committee to the other members who have been appointed. In the role that I have now as cabinet secretary for the economy, jobs and fair work, I am looking forward to working with the committee and individual members. If I can, as you have suggested, I will take the opportunity to set out some of the key issues that I will focus on over the coming months as part of the Government's approach. To make Scotland a more productive country through innovation, investment, internationalisation and, of course, inclusive growth. Clearly, the economic climate for Scotland, the UK and Europe as a whole has changed in the past few days as a result of the EU referendum outcome. That will inevitably lead to a period of economic uncertainty. It means that the external headwinds, such as the low oil price or lowering demand in China and elsewhere, will be added to and will persist right through 2016 and beyond. I, for my part, have been engaging extensively with the business community in Scotland over recent days to emphasise the points, perhaps the obvious points, but it is worth emphasising that, as of now, we are still firmly in the EU. Trade and business should continue as normal and we are determined that Scotland will continue in the future to be an attractive and stable place to do business. Maintaining and strengthening our links with our key European markets will be a key priority in the weeks and months to come. Having said all that, there is a real underlying strength in Scotland's economy. Last year, the economy grew nearly 2 per cent in the face of some of the most challenging external economic conditions that we have seen for some time. We have a highly skilled workforce and I do not underestimate the challenge of improving the skillset that we have in Scotland, but we have been very successful at attracting overseas investment and we have strengths across a range of sectors, so we intend to approach the coming challenges from a position of some strength. We also have to not lose sight of the fact that there are a number of other key areas of work that are currently in train. Chief among those is the work that we are doing in the north-east of Scotland. Of course, that has been particularly impacted by the pressures facing the oil and gas sector and in particular the oil price. The Scottish Government is working very closely with the oil and gas industry work that includes the workforce, the trade unions and the UK Government to secure a long-term future for the sector through the energy jobs task force and through the £12 million transition training fund that is there to support individuals and to help the sector to retain talent. We are also continuing for our part to press the UK Government to take further action to support the industry. You will be aware of the UK Government's statement at the budget about various measures, one of which was an indication that it would be considering long-long guarantees for infrastructure projects. On that particular issue, we have encouraged the UK Government to move very quickly because the discussions that Paul Wheelhouse and I had with the industry were number one in terms of their asks. I have been meeting with the chief secretary to the treasury and with other ministers in the next week or so and I intend to reinforce that point. We are also working to support the north-east region more widely through the £125 million that we contributed to the Aberdeen city region deal and a further £254 million of support for key infrastructure in Aberdeen. It is our view that those investments will help to enhance and promote the city's position as one of the world's leading locations for business and industry. Another key priority for me is the review of our enterprise development and skills agencies. It is obviously the case that those agencies play a key role in the delivery of services to support Scotland's businesses, the colleges, universities and the workforce. That review offers the opportunity to build on the achievements of all those bodies to ensure that they continue to be best placed to deliver our shared ambitions on Scotland's productivity performance. The review will focus on three particular aims, first of all, on achieving the Government's ambitions as set out in the economic strategy and national performance framework, ensuring that our economic and skills interventions are shaped by the needs of users and the economy and ensuring that delivery continuously reflects best practice. The fundamentals of the Scottish economy are strong. We do not downplay the challenges, either those that are facing us externally or those further actions that we have to take to make sure that we are best placed to maximise economic prosperity in Scotland. We have high levels of employment, which is not, of course, the denial levels of unemployment that we have. We have one of the most highly skilled workforces in Europe. We have a strong business base across a range of sectors, and we are an attractive country for foreign direct investment. On those points, I reiterate that I look forward to working with your convener and with MSPs in the committee and across the chamber to further develop the strengths of Scotland's economy and to tackle the on-going challenges that it faces. To repeat something that you said, almost routinely at the start of parliaments—and I certainly mentioned a number of times at the start of this parliaments—I genuinely have an interest in finding out what the views or suggestions of other members are. From my part, I have met two of the Opposition spokespersons already and I hope to meet the others very shortly. That is a genuine invitation for constructive ideas that we will look into and take on board if we are able to support them. I thank you very much and also my congratulations on your appointment to that position. We will now hear from Paul Wheelhouse, who is the Minister for Business, Innovation and Energy, and my congratulations to you on your appointment. I understand that you need to leave by 12 noon, so thank you for indicating that to the committee. When that stage comes, you can simply leave with no further ado. I appreciate your forbearance on that. I do not have a formal statement, but if I may, just a few things at the outset, certainly reiterate the cabinet secretary's remarks. I very much look forward to working and engaging with the committee and the important work that you do. It is an unsung part of the parliaments activities committee work and I congratulate you convener on your appointment as well, indeed all members of the committee, because I know that it is a vitally important committee. As the cabinet secretary has said, much of the engagement that we have had so far has been with the oil and gas sector, to try and deal with the current difficulties that the sector has faced. I have also been engaging very positively with the renewables sector, including last week, attending the offshore wind energy conference in Manchester to put forward Scotland's pitch, if you like, to be a sound location for further investment in offshore wind in our country. I am delighted to say that there are some positive messages that are coming forward around the current activity in that sector and potentially future activities. We have had good news in the form of the Beatrice offshore wind site being brought to financial close and work being commissioned from Scottish yards and facilities. I am also responsible for areas such as innovation and with the cabinet secretary I had very positive engagement with the can-do innovation forum. Of course, in my duties, I am also responsible for areas such as the pace response to difficulties that companies face on a day-to-day basis. I know that a number of members on the committee are also including Mr Leonard, who has an interest in a particular company in that respect. As the cabinet secretary has outlined, we have also got a key role in terms of some of the industry leadership groups. I have in the weeks since my appointment been involved with attending meetings of the financial services and life sciences, ILGs and engagement with retailers. However, it is a broad portfolio and I am excited to be part of it. I am looking forward to working with the committee as we take that forward. I will leave it at that, convener, because I appreciate that we have got limited time. The members of the committee have a few questions that they would like to put to the cabinet secretary and the other individuals who have introduced themselves may wish to come in on one or two points as they feel appropriate. I will start by asking myself a question. We have had considerable foreign inward investment into Scotland and, of course, the internationalisation of the economy in Scotland is a factor that we have seen playing out in a different number of areas over the past few years and decade. Does the cabinet secretary consider that the internationalisation has both positive and negative consequences and what is the Scottish Government looking to do and any specific examples, if the cabinet secretary has any, to seek to make the most of internationalisation and how it can positively assist the Scottish economy and how any of the potential negatives can be dealt with? I think that there is overwhelmingly positive international investment into Scotland. The other aspect of internationalisation, of course, is how we can grow our exports and be more international in the outlook that we have in our domestic economy. The two things are obviously linked. When we have, I think, 119 different projects of investment coming into Scotland, which is truly remarkable, given that the only area that I have had more than that was London within the UK. When you have that coming in, you can often get new practices and innovation coming in with that investment. I think that that has got to be positive for the Scottish economy. Perhaps in your mind, convener, in terms of disadvantages, the fear that has been there for some time, that sometimes this investment can be footloose, it can use up grants and it can move on elsewhere. Of course, that is something that we are very concerned about, to make sure that it is not the case. However, I think that it is extremely positive. That is why we have been quite determined in going out after that investment. A great deal of work is done by SDI and by Scottish Enterprise to attract that investment. Obviously, we want it to have a beneficial impact on the economy, not least first of all, because of the creation of jobs that often follows, but we obviously want to make sure that it is the kind of investment that fits with where Scotland wants to go. I think that we have a very good track record on that. I do think that very recent events will challenge us in relation to that. We have challenged the whole of the UK in relation to that. I do not think that, for example, the downgrading of the credit rating is at all helpful. However, as is the case with the general economic conditions, whether that is the tailing off or the slowing of demand across the world, certainly from China and elsewhere, whether it is because of other pressures—Iran, Russia and so on—in relation to the all-price, oversupply and tailing off of demand, we cannot really change that. What we have to do is try to work in the environment that we find ourselves in. The same is true of trying to attract investment, so we will continue to do that. As I say, the success that we have—I was talking to Ernst and Young last year—I think that the Conservative MSP, Murdo Fraser, has asked a question about what the value of that investment is. Those 119 projects that I have asked as well as their own people in the Scottish Government have asked Ernst and Young about work on that as well, so I hope to come back to either this committee or the Parliament with that information to give more of a—to go to the heart of your question—the exact value that we can attach to that investment. However, I think that it is almost to the exception beneficial to the economy. Certainly, to just emphasise what the cabinet secretary has said, I am certainly aware from just having attended an event this morning at BlackRock. It is a UKTI-sponsored event to look at the collective pitch on financial services that we are making internationally. Lord Dunlop for UK Government was there as well. It was very clear from those in the industry that they see the location at Edinburgh's, for example, the second-largest financial centre after London in a European context that we have a hugely significant role. One of the reasons why in respect to the internationalisation aspect of why we are successful and will continue, hopefully, to be successful is because of the quality of the skills that we have available, the track record, the heritage, if you like, in financial services. It is not the be-all and end-all, but it is important. However, we also have locational advantages being in a time zone, which is very convenient from the point of view of trading both in the sort of Atlantic context when also to the east. We have a geographically advantageous position, English language being a language that is obviously used extensively in the financial service industry. There are some natural advantages that we have that we can play upon, but we also have had some successes in sectors that are perhaps not so obvious. I know that, in my own patch down the borders just last week, there were 30 manufacturing jobs reshored by Starrots, an American-owned company, into the borders to put them back in jobs that had been lost to Scotland and the work of STI and local council as well, but also Scottish Enterprise to re-secure jobs coming back in is also a positive trend to see as well manufacturing coming back to Scotland and hopefully back to UK as well. That is something that we can obviously try and learn lessons from. What were the successful factors? What is clear in terms of the picture in financial services and other industries is making a picture not just about those things like language and locational advantages, but also the quality of life that we can offer, the quality of public services while our infrastructure is not perfect. I do not think that anyone would say that it is improving greatly or broadband communications and so forth. We are modernising as a country as well and we need to exploit those opportunities to try and attract inward investment to Scotland and to try and offset a previous trend where perhaps jobs are being offshore to other environments and we are increasingly being competitive in seeing jobs being brought back to Scotland and to UK. I am interested in the Government's work on promoting innovation. In the paper that we received for this meeting, it was suggesting that there were challenges facing Scotland in terms of research and development and business expenditure on that was quite low compared to other countries. How can the Scottish Government encourage businesses to invest in R&D? I am happy to take that one. We are doing what I believe is leading edge of works through the Canada Innovation Forum, which the Deputy First Minister and his previous role drove forward. The Cabinet Secretary and myself attended the most recent meeting of the Canada Innovation Forum. We have heard about pilot projects that are being taken forward at a Scotland level. Two examples of which are in the area of digital services, which are trying to identify and support and fast track new digital services companies. They tend to either be winners very quickly or they are not. It is the nature of the industry and so we need to get interventions in there to make sure that they have the right support. That is a very exciting pilot that will help to drive forward potentially areas for innovation in what could be a hugely successful sector for Scotland. We have a tremendous record in the games industry and other aspects of digital technology. We know that through the work of the financial services industry, Fintech is another area of financial technology, which is a hugely important area for financial services. Scotland, because of our heritage and being innovators in financial services, whether it is Stuart Stevenson, will remind you, I can promise in the course of committee debates, the invention of the ATM largely happened in Scotland. Those are areas where we have been at the forefront of a particularly important industry internationally and so we have a heritage there that we can exploit. In the other extent, in public services, we have opportunities to innovate as well. Obviously, the public sector is a very significant part of our economy and therefore the pilot that is being taken forward in the Highlands area to look at innovation in and around healthcare is potentially a very exciting one as well. We are trying to take forward or approach a sectoral level, if you like, looking at how we help small and medium-sized enterprises. Although there is some debate about whether they should be called SMEs in digital sector, different terminology would be used, but we take forward how we can support individual companies and sectors as a whole. On top of that, the work that we are doing more generally in terms of the manufacturing action plan that we have developed to try and ensure that we have the ability to support manufacturing sector in Scotland to innovate and some very interesting ideas coming forward about creating a centre of excellence for the manufacturing sector as well to try and support the needs of manufacturers and give them access to perhaps equipment and technology, which present a very high barrier to entry if we are trying to explore new product development to be able to access that in a facility that is shared and to be able to develop new prototypes and those kinds of areas as well. There is a range of different measures to support to individual companies to create infrastructure that will support innovation such as a manufacturing centre of excellence or something of that nature. We are taking forward a range of ideas in that area. R&D is a very clear correlation between R&D and successful economies. If you look at the US, there is more in R&D than the UK does. It is more successful. Japan is the same. The EU does more than the UK does. It is really important that we encourage that. It is not just about what the Government does either through the funding council or through its higher and further education institutions, which is very important. It is also what individual businesses do and the culture of R&D. I have mentioned in the chamber previously one example of Scotland Fife in Fife, who is facing very difficult circumstances, took on additional design capacity, almost completely revamped their product range and turned around their business because of that. That is investment in R&D. It is worth saying that we have a successful tracker that is risen by 44 per cent in dual terms between 2007 and 2014. That is from £629 million to £905 million. That 44 per cent increase in Scotland compares a 10 per cent increase in the UK. We are making progress, but it is also true that we have a long way to go to reach the levels of the EU and world leaders like Japan. It is a very clear correlation between R&D and economic success. I will move on to Liam Kerr. I am going to ask you about the oil and gas sector. You talked about engaging with the oil and gas sector and you outlined some of the steps that you have been taking. The £12 million transition fund, which is obviously very good, but my understanding is that it is very difficult to access. That has not been a great take-up. You talked about the £254 million contribution, but I understand that there is no fixed timescale on that, so we are not quite sure when it will come up. You talked about pressing the UK Government to support the industry, which is good. My questions arising from that are what is the Scottish Government doing to support the sector and maintain the jobs up in the north-east? What is it doing to support those who have lost their jobs to outwith the transition training fund to rescale and remain in Scotland and remain in the north-east? You will know that Aberdeen master plan is being looked at at the moment, and that will obviously have a significant positive impact on the local economy up there. Are there any plans for further investment into that by the Scottish Government going forward? If I can just take, first of all, your point about the £254 million investment, I think that it is really important to be clear about that. You said that there was no timetable for it or timescale. Just to repeat how that came about, we were entering into a conversation with Aberdeenshire councils and the UK Government on the city deal. We thought that the city deal should be far more expansive than was proposed by the UK Government. It proposed £125 million from them, £125 million from the Scottish Government over a number of different things. They are in gas, at innovation centre, in relation to digital, in relation to some infrastructure works. Because they would refuse to go any further than that, we announced a further £254 million. The city deal itself was over a 10-year period, so that was the context for the announcement of that £254 million, which covered, for example, work on the Montrose, the Usain junction and other initiatives in relation to housing and in relation to putting more money into digital. We went further. If we put that together, we came up with £504 million, £1.5 billion, £3 quarters of which have been funded by the Scottish Government. That is how it came about and that is what the timescale is. The timescale is exactly the same as the timescale for the city deal. That was the context for the announcement, but it does not mean to say, for example, in relation to the Lorne Scurth junction, which is one of the proposals that will take 10 years to do that. You cannot be definitive about it, because any project like that, anybody who knows anything about it knows that you have to go through statutory processes, which may or may not include a public inquiry, so you cannot be definitive. We want to get on with doing that project. That is a very substantial contribution, far more than the UK Government was willing to put in to the north-east economy. That is, of course, in addition to the Aberdeen-Westam peripheral route, for which people have been campaigning for nearly 50 years and it is now being done. People can see the evidence on the ground in relation to that. I think that we have done a great deal in relation to that. Of course, we have the full range of Government bodies trying to help with people who will be looking for either new jobs or to retrain. My colleague Paul Wheelhouse, who is responsible for energy, can mention some more about that. However, the Transition Training Fund has helped many people, not all of whom are necessarily going on to a new job, some of whom will do that, but who are looking for advice and support in relation to their skills. The point of the Transition Training Fund, which I think was welcomed by all concerned at the time, is to try and help people to stay in gameful employment, of course it is, but PACE is also doing that, and there have been three PACE events in addition to that. However, it is also to try and make sure that we retain first of all the skills in that area or that we retain the skills in the industry. You will know yourself how mobile that industry is, so it is quite possible that people can move elsewhere, but they will have the option to come back when things further improve. That is the basis on which we have tried to help people in the north-east. It is a very taken-with-the-city deal and the additional extra investment that we announced a very good package. The point of that is that we had the Secretary of State for Transport come up a year ago and said that the problem in Scotland was that there had not been enough investment in the transport infrastructure for decades. That is what he said. He actually was a transport minister in 1989, but never mind. He was right in that. Why we do not have, for example, all our cities connected by motorway or dual-carriageway is an important point. However, if you look at what the people in the north-east have said, for long enough, there has not been that development in the infrastructure or the AWPR, perhaps being the crucial point. There is another much smaller project called the Mustord Look Bypass. It is a very small development by bypass. Again, people in Murray have been campaigning for that for 50 years and it has now been completed and is open. We have understood the bottlenecks that are there in terms of the infrastructure. I think that our track record in trying to tackle that, not least given the constraints that we have on our capital and other budgets, has been commendable. Perhaps my colleague wants to say a bit more about the oil side of things as well. Thank you. To add to what the cabinet secretary has said, we are using all the powers that we have under devolved powers to try and support the industry at this difficult time, job losses in the industry continue to remain a significant cause for concern. A key aim of the energy jobs task force that has been referred to has been to reach and support those at risk of redundancy, so the position as at before last week's event on the 22nd of June at Robert Gordon University, which we do not yet have statistics for attendance for yet, but the industry task force has engaged with approximately 8,800 of individuals and over 100 employers to date to better help them. Those who are affected move forward into new employment. As the cabinet secretary said, the transition training fund we recognise has been some sort of teething troubles. The previous minister, Fergus Ewing, had changed the criteria in the reflection of that to no longer make it a requirement for someone to have identified employment before getting access to the transition training fund. That will hopefully help some individuals who know perhaps that there is a need for skills but not yet identified a specific employment opportunity that will allow them to exercise those skills to gain the training to be allowed to transition into new opportunities. Indeed, at the offshore wind energy conference that I referred to earlier on in Manchester last week, I discussed the issue with a number of offshore wind employers who are looking at potentially transitioning individuals from the oil and gas sector. In some cases, there are oil and gas developers or operators who have a renewable subsidiary in other cases because they are looking at opportunities to take people with subsea skills in those areas that they will need for offshore installation. There is on-going work being supported by the transition training fund to make sure that those individuals have the transitional skills that they need to get into employment opportunities and to try to work with associated sectors such as renewable energy to make sure that there are opportunities to take them on. We have a challenging environment in those sectors that could potentially absorb skills from oil and gas and that we have a destabilised environment in terms of financial support to the renewables industry at the moment. That is creating uncertainty in that industry. In an ideal world, we would have a more propitious set of circumstances in which to recruit people into offshore wind and other renewables opportunities. However, having said that, there are still opportunities arising and so we will do what we can to make sure that those people are taken up as best as possible with employees coming out of the North Sea sector. I believe that there has been some interest in the past of the work that has been taken forward by the oil and gas energy jobs task force and I am happy to try to provide some more detail for the committee if that would be of interest in due course. Jackie Baillie In the interests of time, I only require response from either the cabinet secretary or the minister because we really have pressure on the time available to us. Obviously, the impact of leaving the European Union is not yet quantified but already I think we are all hearing anecdotal stories about investment decisions being changed, jobs maybe being withdrawn and that is not the situation that we would want. Initially, what are you doing about that? Specifically, you have already an economic strategy but people want it implemented. Where is the action plan? Are we going to see one coming? Where are the detailed performance measures and targets? That might be part of the solution. I am happy to answer that for Jackie Baillie. Of course, the vote last week and the implications of that change quite a lot within the economic landscape. There is no question of that. I think that it is a case of making sure that we position Scotland, first of all, to take advantage of any investment opportunities. For example, in the oil industry, which we have just been talking about, there is an uptick in terms of the fact that they pay in dollars and not in pounds and there is a benefit to that. There is also the case that we have spoken to nearly all the major banks and a number of the substantial businesses over the course of the last three or four days to find out exactly what they would need from the Government in terms of any interests that they have to also provide reassurance to them as large employers or people from the rest of the EU about the approach of the Scottish Government, the assurances that the First Minister has given to them, the fact that we remain in the EU, that it is our intention to stay in the EU and to provide as much reassurance as possible. We have put at the disposal of those companies and we have created new fora for on-going discussions with those companies as things move forward to provide that level of reassurance. We will obviously want to be much more acutely aware or as acutely aware as we can be of any potential threat of any disinvestments as we are, as always, of any potential opportunities for new investments. We have had that discussion with those companies and I think that that has been very beneficial. They seem to have been very grateful for the immediate contact that they have had from the Scottish Government on that level of support. If, at the roots of Jackie Baillie's question, the extent to which the events of the last few days change things in terms of how we approach the work in the economy, then, of course, they do. We have to have a different emphasis. We had in place contingency plans before the referendum in the eventuality, and we will see those things through. Briefly, I appreciate the point above—sorry. I do want to pursue one of you because I think that it takes time when both of you answer. Perhaps we could allow Jackie Baillie to do this because we have a very limited time slot and I would like to allow each member of the committee to put at least one question. Thank you, convener. I will be very brief. I am struggling to understand your first point, which is that, if a company is paid in dollars, that is a good thing. If you have studied the price of the pound relative to the dollar, you will understand that companies paid in dollars are suffering an immediate loss. I do not understand where you are coming from on that one, so that is the first thing. The second thing is that I asked you specifically about the economic strategy, when is the action plan coming, when is the comprehensive measurement framework, and I do not think that I heard a response. I have most responded to that later point in the chamber previously, and I have mentioned things like, as has been mentioned already, the manufacturing strategy that we have, the different elements that we are putting in place in terms of productivity, in terms of the infrastructure. The point that I was making in terms of dollars is that the price of oil is traded in dollars. That is the point of making. That is why some people have said that there has been an uptick for them in relation to that, and perhaps one of the officials, despite the fact that you are not too keen to hear from other people, it might be that one of the officials wants to comment on that, but that is the point that I am making about the oil industry. We have, and I have mentioned before in the chamber, the different aspects of the economic strategy. The point that I was trying to make in responding to your first question is that, of course, we have to look afresh at how we do that because of recent events, but I think that it would be useful to hear from Simon Lieslaw. The oil price point that I think was being made was that, for companies operating in the North Sea, when they sell their oil, the oil is priced in dollars. Obviously, when they take that money back to the UK, they are in effect repatriating that money and putting it back into pounds. For a company that is primarily operating in sterling in terms of its costs, labour costs and such like, but is able to export its products, the silver products that it is exporting in dollars, the exchange rate movements that we have seen in the past few days will provide essentially a fill-up for those companies when they are taking up money back into the UK. The problem with some existing companies—sorry, convener, I will be very quick—is that one is being paid in dollars that has contacted me this week to say that they are suffering an immediate loss because of that same exchange rate mechanism. There are swings and roundabouts here. Andy Wightman A couple of very quick questions to the cabinet secretary. What is your definition of sustainable economic growth? For a fuller explanation, you can look at the Government's statement on its economic strategy, but it is obviously growth that is sustainable. It is sustainable in terms of the economy, sustainable in terms of the environment and sustainable in terms of the human resources. If you look at things like fair work practices, it is not, in my view, sustainable to have work practices that are so punitive in terms of employees that you do not get the full benefit of the employees or that it has such a detrimental impact on the workforce that you do not get the full potential. The same would apply in relation to the environment as well. You want to have an economy that uses the environment to work with the environment in a way that is sustainable. I do not think that the definition of sustainable is that challenging. It is fairly obvious that if you can get something that sustains itself over a period of time rather than burns itself out, whether it is in terms of the economy or the workforce or in terms of investment, then you have something that is sustainable. Very briefly, on energy, the Government has got a target of two gigawatts of community and locally sourced renewables by 2030, with the cuts in feeding tariffs and your intention to produce an energy strategy. What plans do you have to ensure that A targets met but possibly exceeded, given that it is potentially a more resilient part of the renewable energy sector? I am glad that that point has been raised. Clearly, we have a number of different reasons for supporting community energy, not least because the benefits from delivering the energy itself can be felt at a local level. The local community will gain from the profitability of the scheme. Mr Whiteman is quite right that the changes in financial subsidies that have been implemented by the UK Government and the Scottish Parliament no longer have powers to legislate such as rocks as a result of decisions that have been taken in the House of Lords. We are in a position where we have to try and influence through other means in terms of the overarching energy strategy that we will be developing over the course of this calendar year and, hopefully, have published by the end of the year. Working in parallel with the third version of the important proposals and policies, which is the Government's climate change strategy, so that the two documents are interlinked. Obviously, energy is going to be critical to delivering on our climate change ambitions, but we are also seeing a change in our stance on energy, trying to encourage more local and community projects. We are confident that we are well on our way to achieving the two gigawatt target, but it is becoming more challenging, and I certainly acknowledge that. We will have to try to look at all the different energy strategies and interventions that we can bring to bear to support development of community projects. I am particularly interested in the early phases of my new role to try and look at the opportunities in relation to community hydro projects, which have taken a bit of a hammering because of the changes in feeding tariffs and the degression and its impact on hydro projects and creating uncertainty for investors, and to identify other opportunities to resurrect some of those projects. I am open to contributions from, as the Cabinet Secretary is, from around the table on constructive ideas for Mr Wightman and others as to how we can achieve that. I am happy to meet Mr Wightman to see if there are any thoughts that he and the Green Party have in that area. More generally, of course, we have set out in the manifesto plans for creating an energy company, which would be, I hope, an area of policy that members will take an interest in. I wonder whether the Government is assessing the impact on businesses here in Scotland in relation to the downgrading of the UK pound. Is there any assistance that can be given and are we talking to the UK Government in relation to—I know that the Bank of England is actually putting money in at the present time—is there any departments in Scotland looking at assisting businesses right now who are caught in this cycle? I think that I would just suggest in relation to Mr Paterson's question that what we said at the start in terms of the engagement that we have had with businesses is a kind of rolling programme. In addition to the conversations that I had over the past few days, Paul Wheelhouse has also had with a number of the sectors. We have many processes by which we can stay in touch with business and one of the organisations that I was speaking to was the Chamber of Commerce over the weekend. We have those conduits through which we can find it if there is particular pressures for either particular sectors or businesses. The way that I have spoken with businesses is to say, let us know—you are the ones that know your business—if you feel those pressures, if there is something that we can help out with that we will do that. So far, businesses have spoken to—have said that they are grateful for that contact and they will use it if they feel they need to. In relation to discussions with the UK Government, you mentioned the Government of the Bank of England. The First Minister spoke on Friday morning with the Government of the Bank of England and I was party to that call. That is when he gave the assurances in relation to the markets and the money that the UK Government had on standby to use to support the markets. We have had that reassurance and that conversation is also to be further meetings with the First Minister and the Governor of the Bank of England in relation to that. The third point to the question was relationships and discussions with the UK Government. I think that it is for maybe five UK ministers that I will be meeting over the course of the next 10 days. I think that that level of engagement is reflected amongst my colleagues as well. There are obviously major issues that we want to try and get to. Some of those meetings are set up for different purposes but we will now also include discussions around the impact of Brexit as well. That conversation is happening and it will be right across Government that we will see that. Dean Lockhart Thank you to the cabinet secretary and minister for taking time out to meet with us today. Given the uncertainty over the EU referendum and there is no doubt that there will be significant uncertainty arising from that, we discussed this beforehand. We are keen that the committee looks at and continues not to be distracted or distracted by the EU referendum. I think that there are key underlying issues that we can still address. Scottish exports to the EU only account for 15 per cent of our exports, while exports to the rest of the UK account for something like 60 per cent of our exports. We are keen that while the EU question is important, we continue the business of the committee without distraction. Given that this is our first meeting, I have a more general question for the cabinet secretary about the structure of the Scottish economy. In each of the last seven years, the Scottish economy has underperformed the rest of the UK in terms of GDP growth and is currently underperforming Wales and Ireland. This seven-year period includes a time when oil was above $110 a barrel, so it is not just a case or a question about oil and gas. I would like to get your views on what the structural issues that we face as an economy are, because, given the skills that we have as a country, we should be performing better in terms of GDP growth. I do not at this stage venture to offer answers, but we should be looking at productivity, the skills gap, unemployment at 6.2 per cent, but we have a significant skills gap in the economy. We have a lack of funding or resources for new innovations and new businesses starting up, and the public sector in Scotland is far larger as a proportional GDP is far larger than elsewhere in the UK. While I am not asking for all the questions now, given that this is our first meeting, I would like your initial thoughts as to the priorities in terms of your policy and our committee remit, what the priorities are in terms of redressing the structural issue with the Scottish economy that we are continuing to underperform the rest of the UK? That is a very good question. I would say that, perhaps I could write back to the member in relation to the point that he makes about GDP and also a more historical perspective that seems for the best part of my adult life. That has been the case that Scotland has been substantially behind the rest of the UK in a number of indicators. There are a number of indicators in the past seven years where we are well ahead of the UK as well, I have to say, but I think that the underlying point that Mr Lockhart makes is about what are the key areas to look at. He has already mentioned one of them, which is productivity. That has got to be a key issue for us. Within productivity, he can imagine that we will be looking very closely, not least through the fact that it is in the title for Paul Wheelhouse's job at innovation and how we can increase innovation entrepreneurial take-up—that is the point of much of what we are doing just now. He mentioned exports and the level of exports to the rest of the UK and to Europe. Going out with the UK is where we have got some serious ground to make up. What can we do to make the culture much more—especially in our small and medium-sized businesses—export-orientated? What is the obstacle to that? Is it a cultural one or are there regulatory ones and getting to the bottom of that? I am not saying that I am the first person to look at that. I am not saying that it is an easy thing to resolve, but I think that in terms of trying to boost economic performance, increasing the investment that we get into Scotland, the point that was made previously by Ash Denham in relation to R&D, is very important. It is a feature of very strong economies. Whether it is the nature of the UK economy or the lopsided approach that we have with London sucking up much of the investment from the rest of England—far less the rest of the UK—whether that has been a factor, we have to improve our productivity. We have seen improvements around 4.4 per cent since 2007, which is substantially higher than the UK, but not nearly as much as we have to do. Changing the culture in terms of innovation, changing the pattern or the hit rate in terms of exports for a small and medium-sized enterprise, it tends to be the same companies that continue to export and grow the exports. Let us try to get many more of our companies exporting as well. That is partly the reason why the review of the skills agencies and that is the other leg of what Dean Lockhart was saying—the skills that we have to have, not just the skills that we need right now in the economy, but the ones that we can see that we are going to need very shortly. We are trying to anticipate those as best we can and make sure that they are there to give us that edge. There are different aspects to that. That is a highlight of the areas that we know that we are looking into. There will be others as well, but perhaps it would be useful, despite all that, to write back to Dean Lockhart with some of our views on the relative economic performance and a fuller answer on those different aspects. If I could maybe come in, I agree absolutely with everything that the cabinet secretary has said. Just to pick up on a specific example, although we have, as we have touched on it, renewable energy, one of the fastest growing sectors that we have had in Scotland for some time, counter-cyclical. We have had investments throughout the recession in billions of pounds of investment in onshore wind and increasingly in areas such as offshore wind, which is providing employment opportunities for the energy park, in yards, in fife and elsewhere. We are seeing some great opportunities arising from that. That is a sector that is fully supported by the Scottish Government. I believe that it has broad support across the Scottish Parliament and Civic Scotland, notwithstanding some of the local tensions about planning applications that I fully acknowledge. However, we have a sector that has an industry that is desperate to invest in it. It has the natural advantage in that we have the energy resources that can be utilised to develop the sector and external policy influences. I am not meaning to make a big constitutional point about this, but it is an unhelpful decision that has been taken in respect of the position on technology by the UK Government in recent times. We need to reflect that this Parliament can play a role in liaison with the UK Government and say that it is unhelpful to the development of Scotland's economy. There is broad support for this sector and we have a great opportunity to nest it. It is creating jobs around the country. I do not deny the democratic right of the UK Government to change policy in respect of decisions in England and Wales, but it has had a detrimental effect on a growing industry in Scotland, which has been powering our economy through a very tough recession. That is not helpful. We could be doing far more in terms of developing that sector if we had a more conducive environment to support it at this moment in time. That is just one example where we can perhaps work together to make a case for a different approach to support for the renewables industry. That is just one example of perhaps other sectors that we could take a lead on. Richard Leonard has been mentioned already of the manufacturing action plan, which was launched in February of this year. I just wondered whether the cabinet secretary could update us on where we are with the various action points in it. For example, has there been a decision taken on the location of a manufacturing centre for excellence? How extensive has the workplace innovation service been? The leadership development programme, how extensive is that? The enhanced asset reviews by the Scottish manufacturing advisory service, which had a target of, I think, 600 over three years, at what point have we reached with them? First of all, the manufacturing action plan has only recently been produced, so many of the questions that Richard Leonard has asked have not been resolved, including the first of those, on the location for the centre of excellence. There are different interests being taken into account currently. Beyond that, I think that the manufacturing action plan is very useful in its own right, but I think that I am just new to this position. I would like to see that extended further to make it something that used to be fashionable to be talked about, which is an industrial policy. It is all very well to have manufacturing, so I think that we have done a tremendous job in terms of making sure that we continue to make steel in Scotland, but we have to make sure that, beyond that, what the steel has been produced for, we have to make sure that raw materials are coming into that. I think that it is a way that those things hang together. I am happy to write back to Richard Leonard on the various points that he makes on the manufacturing action plan, but I am new to this position and I want to take a wider view of that. There are some things that we will be able to be very public about shortly, which will demonstrate that we are taking a more holistic approach. Manufacturing, I think, over the past 30 or 40 years has been almost like a dirty word, where people seem to give up on the idea that we can be a significant manufacturer and I am not willing to accept that. That is why, of course, my predecessor instigated the manufacturing action plan, but I do think that it is now, and perhaps even more so in relation to events of the past three or four days, there may well be opportunities as to how we can flesh out industrial policy. I do not know if any of the officials want to come in on that. That response, which I am very encouraged by, is a plan and not a strategy, and what we need is a strategy. Do you wish to make a response to that? Just to say exactly that point that Richard Lennon is making, it is very good to have a manufacturing action plan, but it has to sit within a wider context. The industrial policy is a new buzzword that we should be using for that these days, because it is so long since people have talked about it. It is like the old alternative economic strategy that we used to be talked about as well, but I think that it is very important that it hangs together. What you will see in the review that we are doing of Scottish Enterprise and the other bodies is fleshing that out as well over the course of the summer as to how that helps to hang together. Perhaps that has been one of the weaknesses that we have had previously, that we have thought too much in isolation about different manufacturing opportunities. It does not stack up unless you have got the basis. You have got the supply that is coming in for manufacturing, and you have got beyond that downstream also the right way to access the markets for what you manufacture. I think that there are real opportunities in relation to that. As I say, new to the position, I am happy to flesh that out more in detail over the weeks and once ahead, and right to Richard Leonard on some of the specific points that he has raised as well. Before I ask Gillian Martin to put her question, there is one matter that I wanted just to clarify with the minister conscious that he will be leaving us at 12. I think that energy efficiency falls within your portfolio, but the question is whether or not fuel poverty also comes within that portfolio? The first thing that I would say is that the Government is trying to set out on its path to be less silo driven, and so we are working together with ministers across Government on all those themes. Clearly, for energy efficiency, one of the Scottish Parliament has fully devolved responsibilities. We will be taking forward that as part of the development of the energy strategy. The energy strategy, which we will consult with other colleagues in terms of housing and other areas, will be developing a whole systems approach. We will be looking at not just the supply of electricity, which tends to be where people focus on areas such as renewables and other technologies, nuclear etc. We will be looking at how we use our energy, not just electricity but heat, fuel for transport and certainly fuel poverty is an issue that cuts across all those areas. Whatever energy strategy we develop with colleagues will be one that takes forward at its heart delivery on our climate change strategy but also tackling our statutory obligations in terms of tackling fuel poverty. That will be a good example of cross-portfolio working. It will also feature in the discussions around climate change strategy in relation to the work of the cabinet sub-committee that will be led by Rosanna Cunningham. I would imagine that fuel poverty will be cross-portfolio in practice in that respect. However, fuel poverty falls within the portfolio interests that I have. We are obviously engaging with the UK Government on energy market regulation as well to see how that influences the ability to deal with fuel poverty. Maybe the question is who will take responsibility for that. That may cover a number of issues. I will clarify that. Angela Constance, co-league of the Cabinet Secretary for Communities, Social Security and Equalities, has fuel poverty in her responsibilities. I will make the point that we will be working very closely together. Fuel poverty is something that is very relevant to the energy portfolio and delivery of energy supply. We will also look at how we can help consumers to save energy and, therefore, improve their family finances as well. I have been asked to disclose and I am happy to do so that I am at the parliamentary liaison officer for the cabinet secretary. I was going to ask about the loan guarantees you have, but I suspect that you will not be able to give me the answer. You will have meetings in the next coming weeks about that. Since you probably do not have an answer as to where we are with the Westminster Government, it is important that we get you to explain why it is so important to the businesses in the north-east and the oil industry in terms of innovation and keeping skills in the area, so that we can have that. I am happy to do that. Perhaps the energy minister would want to say a couple of words on this as well, if he is still here. In fact, do you want to go? I am happy to do that. Your apologies, convener. I believe that I may have to leave during the course of the minister's answer. What we certainly heard from the industry when Paul Wheelhouse and myself went to visit them was that, especially for those who are not the big companies at BP, Shell and so on, it was this requirement to have loan guarantees, especially for infrastructure works. In particular, there is an issue with that. If you have some people withdrawing from certain fields, that makes the costs of the infrastructure fall on fewer businesses. It becomes a question of whether ahead of when they would naturally come to the end of their useful life, they are then, if not decommissioned, no longer used because nobody is able to pay for them. The same is true for investment in further infrastructure to support production or even in terms of supporting exploration. We had a very clear request. I have to say, the companies by and large were grateful for what the other measures that the UK Government took in its budget. They had been lobbying for those and they had got some of those, obviously, as other things they would want, but they were pleased about that. The one that they thought they had made progress with was loan guarantees. Apart from a mention in the budget, nothing further has been done about it. I do not think that there is a great deal of difference in views between ourselves, the industry and the UK Government. What there is, I think, is a lack of appreciation on the part of the UK Government about the need for pace in this. Things will start to happen very quickly if they do not have the investment that is required. In order to make that investment, some of those companies need to have those loan guarantees. It happens in a number of other sectors that are not something that is unusual. I suppose that our plea to the UK Government is, we know that you are sympathetic to this. Get on and do it, because if you do not, the implications can be very substantial. The other thing that I should just mention that they said is that despite the fact that they felt that they had a good hearing in terms of the budget proposals in other areas on petroleum revenue tax and so on, they felt that the industry was not being taken as seriously as it might. They felt that that was because, that is what they were saying, that they were not paying petroleum revenue tax and that there was no tax going in. The UK Government was saying that this is not an interest-paying tax. The point is that more than £600 million has been generated from the supply side of that industry as well. Those people are paying tax and those companies are paying corporation tax. There is a huge tax receipt from the North Sea industries just now. I think that it is on that basis that the companies are very keen to the UK Government. There is no point in taking the incentives. If they take three years over this, there is no point to it. It has got to be three weeks or three months that they get this sorted out. That is the nature of what the long guarantees are seeking and why they need to have them very quickly. Just briefly, there is one annoying my private office in doing so, by not leaving promptly. One of the things that came across to me, and the camera secretary is absolutely right about the urgency of this, is that we have, as many people will observe if they are going around Scotland's coasts exploration rigs and other equipment that is sitting idle at the moment. The utilisation rates for that equipment are far lower than they usually are. I appreciate that there will be a difference of opinion about the development of more hydrocarbon fuels, but it is just a technical point that those rigs will cost a lot more to bring back into use if they are lying idle for a long period of time. They physically need to be taken from a cold start, as it is described to us, and brought back into serviceable condition. They are literally rusting in the sea locks and the firsts of Scotland at this moment in time when they are not being used. There is an incentive on the part of the industry to ensure that the UK Government realises that there is a need to ensure that, through loan guarantees and other mechanisms, that those assets can be maintained to try and support the industry to maintain them so that they do not have wasteful expenditure at some point later down the line to bring fuels back into use or to explore new fuels, because that is a disincentive for the smaller operators who have not got huge balance sheets behind them to invest in that they are very high costs. It may take £10 million plus to bring a rig back into serviceable condition, and that is a high cost for a business to face, especially if there is no financial support for them. On the lower oil prices, is it not better that infrastructure for oil platforms and such things is retained in Scotland rather than being dismantled so that it can be put back to use as and when the oil price improves? I do not think that it is said that the decommissioning that they are referring to here is actually rigs that are ideally to be used in Scottish waters for Scottish fields, but they are deteriorating. They will be deteriorating while they are sitting idle. There are different maintenance schedules that can be applied, some which keep them effectively oven ready and ready to go, but there is no incentive to do that at the moment with the lack of investment coming through in the pipeline. The costs are higher because they are effectively starting from a cold start position, and that is a higher financial burden on the part of the operator to bring that rig back into service, because they have to pay for that, not the rig owner. They have to pay that cost to bring it back into use. It is just to flag that up as an issue. Obviously, loan guarantees and others may help to bring production and exploration activity back into play, which would allow those assets to be maintained on a more regular basis. Julian Martin, any follow-up questions for the cabinet secretary or the minister of policy is still here? We will just relay a request that we find out as soon as possible what the results of your negotiations are on this, because I am being a north-east MSP and I am getting quite a lot of the industry representatives contacting me about this very pressing issue. I have just written to the chief secretary of treasury. I think that it is next week that I meet with him, and that is at the point at which I will take that up. I am happy to come back to the committee with the outcome of that, although I expect that it will be myself making the case. I am, hopefully, saying that he will look at it, but I am happy to update the committee in due course. Did one of the officials want to con it? Was it at the point that you are going to make? Was it at the same point? It is a meeting on Thursday. It is a meeting on Thursday, you say. John Mason There are just a few areas that I would like to touch on, if that is okay, that have not been mentioned so far with the convener's indulgence. The point has been made to us that housing is an important part of the economy now. Part of housing is just to give people decent houses, which is a separate question. However, do you see housing as an important part of the economy as far as jobs and so on is concerned? Yes. It is not part of my portfolio, but it is extremely important, not just because people need to have warm, dry, safe and attractive places to live, but also because, if you want to attract going back to my portfolio, companies to locate in particular areas housing supply, a good housing supply is very important for that. Housing is very important to the economy, but in its own right as well. Secondly, the enterprise agencies understand that there is a review going on in Scottish Enterprise and HIE. I am less familiar with HIE, but historically they have had slightly different remits. If I am correct, Scottish Enterprise falls under your remit, but HIE does not. Can you explain to me why that is the case and how you see the review going? I think that it is the case, because if you look at the remit of Fergus Ewing, which is about rural issues and connectivity and so on, there is a natural alliance with HIE in relation to that. However, we have a fairly close working relationship in relation to working across that, so there will be issues that I am dealing with in terms of the economy, which will impact on rural areas, and we will have joint working in relation to that. I think that your other point was about the review itself and how that is going to work, am I right? Yes. I think that the point has also been made, given the new challenges that we were facing after last week. Is the review the priority for Scottish Enterprise, or should it be just out there doing their work? I think that it continues to be a huge priority. Although we are doing that, of course, we have to keep an eye on the fact that, take one example, one of the bodies that will be involved in that review will be SDI. Obviously, the point was made by Jackie Baillie or somebody previously. It is a crucial point in terms of investment and the potential for disinvestment. We have to make sure, of course, that the Rai remains on the ball in relation to those things, but that review will proceed, and I think that we will be informed by some of the things that we have to confront as a result of the Brexit vote last week. It is a short period for us to achieve this by the end of the summer, so it is not going to be something that lingers for a long time, but it is extremely important. Also, if you think of the timescale, not that anything seems certain in this environment, but one of the timescales that we are told is that article 50 would not be triggered until October, perhaps after that, then there is a two-year period after that. The environment that we are in is going to continue for some time. It is right that we continue and bash on with the review of the enterprise agencies, the Scottish Funding Council, Skills Development Scotland. In fact, you could say that if this vote had happened that we had not planned that review, we would have to do some pretty quick work to make sure that we were pointing in the right direction to deal with some of the implications of the vote in any event. Another part of your remit is the fair work side of things. It is always the fear that when we are facing challenges in the economy that we just want jobs almost at any cost and does the fair work side like getting the living wage, like making sure that women are getting their fair shot of jobs would be secondary. How do you see them balancing up? It is a very good point. As you say, if things become pressured, then there can be the temptation to say jobs at any price. However, the whole thrust of what the Government is doing and what the First Minister has said is that we first of all believed that Scotland has voted to stay in the EU and we intend that Scotland should stay in the EU. If you have that approach, I do not think that you can reasonably start to lower your standards in terms of fair work practices, many of which are underpinned by European legislation. I recently did procurement, for example, and much of what we have done, although we are not able to insist upon it under European regulations, is to drive up people being paid the living wage, for example. I think that it is entirely consistent with the Government's approach of wanting to stay in Europe for the benefits that it brings, not least to employees, that we continue to maintain and improve those standards for employees as we go forward. Just the final point that I wanted to ask about—quite often when we are discussing the economy and other factors, the comparison is always with the rest of the UK. I just wonder if you think sometimes we over-emphasise that and maybe we should compare with, say, Denmark, Netherlands, Ireland and other countries like that? I think that it is a very good point and I agree with it, although I think that the point made previously by Dean Lockhart how important the rest of the UK is to the market in Scotland where you cannot lose sight of that. However, you are right. If you look at the performance of Scotland in relation to small European countries, it is 1.9 per cent growth that is there or there about with other European countries. However, you do not want to set that as your ceiling, you want to achieve the highest possible performance that you can. It is perhaps inevitable that people will, given the fact that it is true that we have been part of the UK, people want to make that comparison. Much of our ONS and other statistical gathering mechanisms are based around that. They come out in the context of the UK, so that is perhaps inevitable. If what you are saying is that we should be much more willing and keen to compare ourselves with comparable nations in the economies around the world, that evidence is out there already and perhaps we should be doing a bit more of that. It gives you a more objective context in which to judge the Scottish economy's performance. You commented on staying in the European Union. Of course, we are part of Europe whether we are in the European Union or not as a matter of geographical and historical fact. Surely it is the responsibility of the United Kingdom Parliament to deal with issues of our relationship with the European Union and international relations. Indeed, your position or every member of the committee or the Scottish Parliament exists in terms of the Scotland Act 1998, which sets out in schedule 5 part 1 paragraph 7 that issues to do with international relations are reserved to the United Kingdom Parliament. Would you like to clarify your position? I think that I have been a member of this Parliament not as long as some, but certainly for the last nine years. It has always been the case that this Parliament has been an outward looking Parliament that has had international relations, whether it is through the external relations committee or others. It is also true to say that both the Scottish Parliament and the Scottish Government have very extensive discussions with the institutions of the EU on a regular basis, and that is not going to change and I think that it will expand because of the vote that we have just had. The UK Government does have those responsibilities. The Scottish Government, I believe, has a responsibility to reflect the fact that 62 per cent of people in Scotland that voted to stay in the EU, that is a responsibility that we take very seriously and will intend to prosecute. Obviously, the Parliament is going to have discussions on that later today, but I think that it is absolutely the responsibility of the Scottish Government to have regard to what the Scottish people have said. Jackie Baillie wanted to come in on the point. Just briefly, can I also state for the record that I may have been here for a long time, but I did start very, very young. Can I return to the question of the review, because I do think that this is important. We support the review, we agree with it. I would encourage the cabinet secretary to reflect on the timetable though, because I think that we are all aware of organisational change in and of itself. It is not necessarily the most important thing. When you have organisational change sometimes, there is a degree of naval gazing and protectionism that diverts them from the main purpose. Given what we know about the potential impact of the EU referendum, he would not find criticism from many people if he chose to extend the timetable slightly. I invite him to consider that. That is a very fair point. We will obviously consider those points. What I would say is that it tends to be the case, notwithstanding recent events, that if you set a certain amount of time for something, you take up that time regardless. One thing that I am low to do is set a side more time, because we will just use up that time inevitably. However, I think that the point that Jackie Baillie makes about institutions, and I forget how she phrased it, is defending in their corner. If you spoke to the officials that I have spoken to since I have been given the remit, they will know that that is not how I intend to conduct this review. For example, we will be able to say much more on this in the next week or so, but this is about finding out how the users of those services, those that benefit from those services, is going to be central to the way that we carry out the review, much less to do with where we are this institution, we have done a great job and leave us alone. That is not going to be the basis of it. I hope that what we announce in the next couple of weeks and people involved in the process will get to know about that in the next couple of weeks, perhaps even in the next week, will help to reassure Jackie Baillie on that point. I am very grateful to her offer of no criticism for an extension to the review, and I will certainly bear that in mind. Talk about age when it comes to hear that. Ministers have a couple of questions, related questions in regards to fracking, and I wonder if you could tell the committee when are the powers that have been promised in relation to fracking going to come to this Parliament? Will the final say, will the veto rest with ministers or will it be at local government level? I think that, on the latter point, that has always been our view that it should be a ministerial decision in relation to that. As to the exact timescales, perhaps I can get one of the officials to come back on that. It is when you really miss the fact that the energy minister has gone just now. I am happy to give a timetable for how we intend to deal with it, but some of the licensing powers have already come to Scotland. I do not think that one of the issues that is material is when other powers come to us. We are carrying on with the review that we have, the evidence-based review that we have, and the moratorium will continue through that period. I do not think that it is the waiting for additional powers that are material to this, but perhaps Andy Hogg would want to say something more on that. The research projects to inform the consultation are currently under way, and they will hopefully report back towards the end of summer, until our consultation to take place is going beyond that. Dean Lockhart A very brief question for the cabinet secretary to help the committee to focus on our remit and work during the recess. Is there any prospect of any changes or tweaks to the Government's economic policy, the four-eye economic policy, either in light of the EU vote or otherwise, or do you see that being the benchmark for the Government's economic policy going forward? It is a very good question. I think that it is hard to see how any of those four eyes that underpin the policy would cease to become relevant, but I think that you make a very important point about how circumstances have changed. Of course, we are in the process of looking at how those changed circumstances should impact on how we drive economic policy, and perhaps just to come back to a point that I made previously. That is meant genuinely if you feel that there are issues that could be taken on by the Government in relation to that, and that is true of any member. We are more than happy to listen to that. The underlying point is that we are in pretty new territory here, and there is no way that somebody can have a 360-degree appreciation of all the different opportunities or threats. The more people that are looking at that, with Scotland's interest at heart, the better and more than willing to listen to that. We do not propose, apart from reviewing what we are doing in the light of circumstances, changes to that. I cannot see a circumstance where the four eyes would not be just as applicable, but if there are other suggestions or other things occur, we will, of course, look to incorporate that. Thank you. Are there any other points that anyone would like to raise with the cabinet secretary? If there is nothing, I would just like to thank you, cabinet secretary, for coming today and for responding and also setting out your own position at the outset. Thank you very much. I should have said at the outset that, although Gordon MacDonald is not here, he has sent in his apologies, so those are noted. The next point was to ask the committee to agree that items 3 and 4 on the agenda be dealt with in private. Is that agreed? Yes. Thank you. We will then move over to private meeting after we have a short break.