 Felly, ies gael i fynd i gwellio gael gondolioclennu 19 mewn 2020, gyda Gweithwyr Felfor. Mae'r ysgolwm y dyna yn amser oes i ddif glacir b skilledraff a'r cyfas representativei yn symud o gyfer mewn gwymig. Felly, mae'r cyf i gael i fynd i gwellio gandolioclennu 19 mewn mwynd i amser i gael i gael i gael. Efallai, mae'n gwybod, ac â gweithio, mae'n ganunol ni i gyd yn gweithio i gael i gael. Efallai. Bydd y tîm gweithwyr. gost o datblygu ond gennymau 6, rydyn ni wedi i adael gyda'r ac yn ei ffordd mwyn'r Hesgladeon a'r Aberdeen Traged Union. Rydyn ni'n gallu i chi ddim yn ei gael eich bwysig yw yw Farm mmhwn i'r honnod, i chi ddim yn ei gael i'u bwysig yw Lcm, ynbonell yw hwnnw i ddim yn ei gael i'r honnod. Roedd yn y d computersau ffiyth gyda'r gweithgofach, os yw'r wir ac y gallwn ei gael eich LCCM, ond y UK Parliament's Data Protection and Digital Information Bill. Y UK Government Bill was reintroduced in the House of Commons on 8 November 2023. The bill makes changes to the legal regime for processing personal data and touches on a number of different policy areas. I welcome Richard Lochhead, Minister for Small Business, Innovation, Tourism and Trade, who is joined by Helen Finlay, Head of Information Assurance and Data Protection and Eileen McLaughlin, Head of Digital Citizens Units, Scottish Government. I invite the minister to make a brief statement on the Scottish Government's position and I'll move to questions from members. Thank you, convener, and good morning to committee members. Thanks for giving the opportunity to discuss the Legislative Consent memorandum and subsequent supplementary LCM for the Data Protection and Digital Information Bill. The bill is UK legislation, which seeks to amend the current data protection framework and improve digital information services. There are four areas of the bill where consent has been requested. Those will help us to work towards a key ambition to the Scottish Government, which is to ensure that Scotland becomes an ethical digital nation, where people can trust public services to respect, privacy and be open and honest in the way in which data is being used. We want to maintain that commitment and build public services that are inclusive and practical in the digital domain. The provisions enabling digital verification will mean that people can choose to use this method to prove things about themselves in order to access a service. A trusted ID provider could check against data, for instance, provided by a consumer to the Department for Work and Pensions, or HM Passport Office, for example, when a customer is booking a flight or using a financial service to help to make that transaction more efficient for the customer. Customers will benefit from the smart data provisions when seeking lower prices or tariffs for energy bills, perhaps, and smart data schemes will empower customers to make better use of their data to enable accurate tariff comparisons, compare deals and switch suppliers. The amendments to the Digital Economy Act mean that enterprise agencies will be able to better target businesses to help them to comply with any relevant law, grow the business and engage in trade activities, and create a green and sustainable business. Police information sharing agreements could help to mitigate the loss of law enforcement information caused by leaving the European Union. For example, an agreement with the EU or EU member states could include real-time alerts on wanted or missing persons, which would allow Police Scotland to know that someone who is questioning at the roadside is also wanted in connection with a serious crime in the EU, or that someone who found their vulnerable position in Scotland was recently reported missing on the continent. Consenting to this bill will ensure that the people of Scotland do not miss out on benefits of these measures, whether that is as consumers or whether interacting with public services. Finally, the sharing of law enforcement data is vital to ensuring Scotland's law enforcement agencies are able to co-operate with their counterparts in the UK and Europe following our exit from the European Union. Ministers and officials from the Scottish Government have engaged regularly with their UK counterparts over the past two years to ensure that our concerns about the bill have been heard. We have stressed to the UK Government our view that the bill's benefits to organisations should not come at the expense of the rights of individuals and the continued adequacy decision from the European Commission, which is about allowing for the easy flow of personal data from the UK to the EU. Once again, I thank the opportunity to give some opening remarks. My officials, mainly, as well as myself, will take the opportunity to answer any of your questions. Thank you. Minister, do you have questions for the minister, Kevin Stewart? Thank you very much, convener, and good morning. Obviously, we have seen some controversy in terms of information sharing or companies taking over information completely and utterly in recent times, including the NHS south of the border using the US company Palantar in terms of patient medical information. I ask the minister and the panel what impact does LCM, if we were to proceed with it, have in terms of medical data sharing and large companies being involved in that data? The provisions that we are discussing today do impact on public services in terms of sharing information. Ailey's role in the Government is to oversee that within our own sphere, so I will let Ailey come in the second or two. Of course, the wider GDPR issues are reserved to the UK Government, and that is a different part of the bill. Our provisions do not relate to that. They are just really related to the involved bits. Ailey, do you want to speak about how we govern that? Yes. First of all, what I will say is that, particularly in the health sphere, you have to have very specific conditions under GDPR to share information. Although I cannot comment on the context of the NHS England and Palantar deal, because, obviously, I am not privy to all the terms of that, I would have suspected because it is required by law, I have adequately assessed their data protection implications in relation to sharing that information. I am sure that they had the correct legal basis to share it, but that, again, is something for NHS England to consider and not for us. The provisions of this bill do not specifically relate to health. What this bill relates to—and I am making a presumption, so forgive me if I am wrong—is that you are thinking about the smart data clauses under 65 to 81. Those clauses can permit data sharing, but they are very clearly at the customer's request. Therefore, it is sharing securely at the customer's request with authorised third parties for a benefit to the consumer. The objective of this is to improve data portability between suppliers, customers and relevant third parties, and it is to help to overcome information asymmetry between suppliers and customers. It is a positive data sharing provision, but it does not negate the need under GDPR to have the correct legal basis to share information. We are saying that it is a positive basis in that folk have to give consent, but in terms of regulation change in all of this, would it be possible to change that by using regulation, or would that require primary legislative change? I will tell you what I am driving at, because the DPLR committee highlighted that it remains the case that the Secretary of State may make regulations within the devolved competence alone. There is no requirement for the Secretary of State to obtain consent or to consult with Scottish ministers before exercising power. The kind of change that, instead of that positive aspect in folk consenting, could that be changed using regulation, or would that require primary legislative change to turn all of that around in its head? I believe that that would require primary legislation, because it would be amending UK GDPR at that point. As was in the question related to that, the UK Government could legislate to make changes to regulations without consulting with the Scottish Government or the Scottish Parliament. It is just to ask what arrangements are in place between officials with the Scottish Government to ensure that we have knowledge of if that happens. Will the minister give a commitment that he will keep the Scottish Parliament up-to-date if there are any changes that come through? Yes, we will certainly do our best to keep the Parliament up-to-date with anything that we become aware of. You will perhaps recall that there have been several times that I have been before this committee, with various ministerial hats on, where in terms of some of these negotiations over the LCMs and what we can support and what we can't support, the UK Secretary of State has attained power to intervene without consulting with the Scottish Government, but we have to take a decision sometimes. In this case, of course, we have a concession whereby Scottish ministers were added in to have a role in respect to the original clause 93, which is clause 99 now. However, we have to weigh up the benefits and disbenefits, so clearly we took the view that, overall, by supporting this, there are more benefits than otherwise would be the case. If there are no other questions, I would like to thank the minister for attending this morning and I will briefly suspend the meeting to allow for a change of my witnesses. I will now move to agenda item 5, which is the Subordinate Legislation and Public Procurement Agreement on Scotland Procurement. We now move to agenda 5, which is consideration of two SSIs. The committee is invited to note the Public Procurement Agreement on Government Procurement, Miscellaneous Amendments Scotland Regulations 2023. Are members content to note the instrument? The committee is also invited to note the Public Procurement Agreement on Government Procurement Thresholds, Miscellaneous Amendments Scotland Regulations 2023. I will now take agenda item 4, which is consideration of a legislative consent memorandum on the UK Government's economic activity of public bodies overseas matters bill. The stated aims of the bill are to ensure a consistent foreign policy across the UK by preventing public bodies from indicating political or moral disapproval of a foreign state when making decisions about procurement and investment. I welcome Tom Arthur, Minister for Community Wealth and Public Finance, who is joined by Russell Bain, Deputy Director International Futures and Brand Scotland Policy. Alasdair Hamilton, Procurement Policy, Portfolio Manager and Robert McConnell, a lawyer with the Scottish Government. I invite the minister to make a brief statement to the committee and then I will invite members' questions. The bill triggers the consent process because it alters the executive competence of Scottish ministers by preventing ministers from taking immoral or political disapproval of any foreign state conduct into account in procurement decisions. That is not necessary. There are already significant protections in domestic procurement law. It is undemocratic. It would allow UK ministers to find Scottish ministers for even saying that they would have taken a disapproval into account where it is not unlawful to do so. It risks our ability to take a values-based approach to international engagement. Whether it is in relation to Ukraine today or apartheid South Africa in the past, it should be clear why that is important. As such, the Scottish Government does not recommend that consent is given. I have a number of short questions. I hope that we can get some short answers. First of all, minister, would you accept that international affairs and masters of international trade are reserved to the UK Parliament? Yes. In your policy memorandum paragraph 20, you make reference to the UK Government, which UK Government are you referring to? That would be the UK Government, of course, a previous UK Government. The UK Government moves in power at the time. When apartheid is taking place. I just want to get some precision as to what dates you are referring to. That would be the UK Government that was in power at the time. There was an approach that was clearly understood at the time when the UK Government was under, when that was the circumstances in South Africa. I am genuinely confused by that because I did a very little bit of simple research. Margaret Thatcher's Government, for example, condemned apartheid on a number of occasions. Famously, Margaret Thatcher, when she met Archbishop Desmond Tutu condemned apartheid. She condemned apartheid in 1984 during the visit of PW Bota, the South African leader of the United Kingdom, and the UK Government also was involved in sanctioning South Africa. I am not entirely sure what that paragraph refers to. Well, there was an approach that the UK Government would have taken over the duration. The point that is highlighted, which is specifically in relation to clause 4 and the implications that that would have had, is that it would have prevented public bodies or Scottish ministers from publishing a statement that would have said that it would have acted in a particular way. The way in which the legislation is set out and operates would have created restrictions on the competence of Scottish ministers where a Scottish Parliament had to be in existence at that particular period of time and where the UK Government to have had this legislation in place, it would have placed restrictions upon the competence of Scottish ministers. Well, I am concerned, minister, that you are founding your arguments on a statement in your legislative consent memorandum that is not sustainable. But anyway, let's move on to the substance of the issue, if we can. There are many repressive regimes in the world. There are many countries in the Middle East, for example, which have terrible track records when it comes to the rights of women, the rights of the LGBT community, the rights of religious minorities, which repress free speech. We have countries such as Iran, which are particular examples of this, we have countries such as China, which are a very deplorable human rights record. Are you aware of any campaigns to boycott, divest and sanction for many of those countries? No. No. So, thank you. So this is all about Israel, isn't it? This is exactly what this whole debate is about and what this legislation is about, is about Israel, for some reason, is being singled out here by campaigners when there are all these other repressive regimes that are being ignored. What we've seen over the last few weeks, particularly since the 7th of October, is a dramatic rise in antisemitic activity. I've certainly spoken to members of the Jewish community in Glasgow who say they have never experienced such a hostile environment as they are experiencing today. They feel unsafe in Scotland. You'll have read the submission, I'm sure, from the Scottish Council of Jewish Communities, showing overwhelming support for the bill and opposing the action that the Scottish Government is taking. Are you not concerned that, in opposing this bill, the perception will be that you're giving succor to antisemitic sentiments? What you should be doing instead is giving reassurance to the Scottish Jewish community at this particular point when they feel more threatened than at any point in the last 40 years. I refute the implication that this isn't any way of giving succor. I think that every single person who is a member of this Parliament is completely unified in their unconditional and unqualified condemnation of antisemitism in all its form. What we are considering this morning is a legislative consent motion whereby the UK Government is seeking to alter the competence of Scottish ministers. They are seeking to change the devolution settlement. That is specifically what we are considering here with regard to this LCM. It is situated in a broader context of consistent acts by the UK Government to undermine devolution. That is specifically what this LCM speaks to. I can perhaps understand the Scottish Government. We have taken that view before the 7th of October, but we are in a very different situation now. Let me just read you what the Scottish Council of Jewish Communities say in their submission. We urge the Scottish Parliament to take note of the vulnerability and anxiety of many Jewish people in Scotland, as demonstrated by the large majority view among the Scottish Jewish community in support of the Westminster Bill, and so reject the Scottish Government legislative consent memorandum. That was written before the 7th of October. I imagine that if we were to ask them today, we would get a much, much stronger response from them. Do you not just think, given what's happened, that you are on the wrong side of the argument? I respect that there are a range of views, and there have been a range of views aired where this legislation has been considered at Westminster. The position that we are considering here today are the implications for devolution, specifically the executive competence of Scottish ministers. That is a distinct matter. It is something that we as parliamentarians have to pay close attention to and to consider carefully. That is particularly within the context of what we have seen over recent years as an approach by the UK Government that has been encroaching upon devolved competency. That is what we are specifically considering here. That legislation would alter the executive competence of Scottish ministers, and as such, we are opposed to the legislation on that basis. I have any other members who wish to ask a question, Gordon MacDonald. Thank you very much, convener. On Murdo's point, I just remind folk that the Conservative Government in the 1980s tried to stop boycotts against apartheid in South Africa. We should remember that. Amnesty International, in its evidence to the UK Parliament, highlights that Scotland is trying to attempt to use a leverage of public procurement to incentivise companies to behave sustainably with regard to human rights, labour rights and the environment. Similarly, human rights watch said that if the bill comes into effect, the effect could be to hamper those groups from taking steps in business dealings to avoid causing or contributing to human rights abuses and international crimes. Local Government Association of England has raised concerns, and the University of UK has raised concerns regarding freedom of speech, etc. My question to you is, what is the potential impact on councils or universities on their procurement policy or pension fund investment decisions if the bill was to become law? Scottish ministers and public bodies in Scotland, of course, take decisions on procurement that are consistent with and uphold our obligations under international and domestic procurement law. It is also recognised that, as expected of all those who are in a position to take decisions, the decisions are not taken in a ethical or moral vacuum. However, we have a strong record on public procurement, we have clear provision set out within legislation, and we have a clear set suite of tools to assist public bodies in their procurement decisions. However, all public procurement decisions taken in Scotland, of course, have to be consistent with both domestic and international procurement law obligations. I raise some evidence around the Scottish procurement policy note from 2014 that strongly discourages trade with the legal settlements in the occupied Palestinian territories, which understands that it is still a relevant piece of policy. It has been a case where the Scottish Government is arguing that it does not deviate from UK foreign policy. Are you confident that that is consistent? To make the presentation that we have received, I want to raise those points on behalf of them. I think that it is important to note with the coming into force of the 2014 act in subsequent regulations, along with a suite of tools. We promote sustainable procurement across Scotland, which takes into account a wide range of considerations and factors. I do not know perhaps Allister, if you want to expand on that. Our approach over the last number of years, since the 2014 act came into effect in 2016, has been to focus on producing sustainable procurement guidance and sustainable procurement tools for purchases across Scotland. Those cover issues such as modern slavery, conflict minerals, human rights and so on. They are more of general application than of particular, but they touch on some of those issues that are live across the world. The committee is going to do some post-life scrutiny on that act, so that might be an area that we consider in more detail. Can I just ask what engagement the Scottish Government has had with the UK Government, but also other devolved administrations who have also been considering this as an LCM? There was an exchange of ministerial letters following the bill's introduction, and there has been continued engagement at a official level through the process of the legislation being considered. Have you had any discussions with other devolved administrations? Our primary engagement has been with the UK Government. There has been constructive engagement with Welsh Government colleagues in particular, but they obviously take their own considerations. Is there any other questions from members? That brings us to the end of the evidence session on the LCM. Thank you to the minister for attending the English officials, and I will now briefly suspend the meeting for a change of witnesses. The next item of business is item number six, and it is our third evidence session on our Just Transition Inquiry into the Northeast and Moray. Today's evidence session is comprised of two panels. For the first panel, I welcome Mike Duncan, North East Scotland Development Manager for FSB North East Scotland and Jordan Jack, General Secretary of the Campaign for North East Rail. We have received apologies from Duncan Cameron, managing director for FirstBus, who has had to take part in another urgent business. I will come to Mike first. Part of our inquiry, we are looking at Just Transition Inquiry in the Northeast, is considering whether people understand what a Just Transition is. Is there a shared understanding among your members of what the expectation is? Do you have any views on how we could tell whether we have achieved the Just Transition or not? What would be the indicators particularly for your members? We did a survey at the start of the year, a big small business survey, and the results seem to indicate that a lot of our members do not know what the Just Transition is all about. In fact, I did a bit of work to break down our Scotland-wide stats into Moray in the Northeast stats, and 40 to 45 per cent of the respondents had no idea what the Government's net zero targets were. What was interesting was that this was in comparison with a 38 per cent Scotland-wide lack of understanding. It showed that Moray in the Northeast had less of an understanding on average than the whole of Scotland, which is interesting considering the work that is going on there. To help to improve that engagement, we have some work to do as the FSB and other business representative organisations to try and help small businesses to get involved, but there might also be other funding aspects that could engage small business owners and we will get on to that later with other questions later on. Do you think that the understanding is that people know that there has to be a transition that takes place, but what does the Just part of it mean? For small businesses, they will think that they need to change their energy source or other practical measures, but is there an understanding of what it means for it to be just? I think that a lot of the thinking just now in businesses that I speak to are that it's something that's happening in Aberdeen. It's about oil and gas. It's not necessarily affecting businesses throughout Moray in the Northeast. It might be something that happens to them on 10 years' time once it's sorted out in Aberdeen. It'll affect us, that type of thing. I don't think that there is an understanding of what that just means. I have spent some time looking at the community aspect, so I had a look around a showcase for the participatory budgeting side of it. A lot of what the community groups and the voluntary sector were looking for was similar to what small businesses we would be looking for. It might be triple glazing, insulation, solar panels, maybe a heat pump, that type of thing. Again, I don't know if that understanding is there because that's not necessary. There's a different funding mechanism for business as there is for that participatory budgeting. It's similar needs, but the just aspect, I don't think that it's quite understood. Finance or support in some way is the main barrier to businesses making these type of changes you've described at the moment. The Scottish National Investment Bank is very important. It's an important funding mechanism to leverage that private investment, but I think there needs to be something else in the funding mix, potentially a grant scheme. You'll find that if grants are mentioned, businesses do pick up the ears business owners. It's one of the main things that people come to me looking for is funding for X, Y and Z. Potentially provided through the local authorities, I would imagine match funding, not naive enough to expect 100% funding for anything, but maybe more ambitious than 50-50% match funding, maybe one third to two thirds. I hope business owners might not want to do is borrow money that they have to pay back over three, five, ten years, but what they will know is I have this amount of money in the bank just now that I could invest in just transition or projects that help the government achieve. It's got just transition targets and they might be able to use that money with some match funding to do smaller projects. Just one more question before I come to Jordan. When you surveyed the members and I think you said 42% didn't know what it was, were they in particular businesses or was it just across the board? It's across the board. I'm an FSB membership in Murray in the Northeast. I've got about 2,500 members in every industry, every sector. It wasn't a specific survey, it was industry-wide. Jordan, if I come to you who you're here representing the campaign for rail, you could argue that you're a campaign that is focused on delivering a just transition, but do you think there's a shared understanding of what a just transition means for the area and how will we know if we've achieved it? It's quite difficult. We attended a meeting with the Just Transition Lab in the University of Aberdeen just last week and they've been working on it and they're about to publish a piece of work that looks at exactly that and measuring the just transition and trying to work out exactly how we quantify that. As a campaign, we've always leaned heavily on evidence rather than just shouting that we want this. We really want to have evidence to back us up and to be the arbiter to hear what the people that do the work are saying. A big piece of that work was collating and trying to understand people's understandings of the just transition and how we measure it going forward. That piece is due in December and I'd really urge the committee to look into that when it's published, because it's a really solid piece of work and we were thoroughly impressed with the work that's been done at the University of Aberdeen. Mike said that there's a feeling among his members that it's something that's happening in Aberdeen that it's about the oil and gas sector. Do you find that's a challenge for you in trying to link the campaign into the broader activity that needs to happen to deliver a just transition? As a campaign, we are looking at the just transition as a longer term thing and it's less about how individual businesses are changing. We're looking less at how say a business changes from an oil heating system to an electric heating system. We're looking at are these businesses going to be able to hold on in the area and are we going to have the wider industrial base to support these smaller businesses? For example, if we're looking at over the long term a reduction in oil and gas and an increase in renewables to match that, we need to hold on to that skilled staff and for us as a campaign it's about looking at that from a local perspective. There's a competition between the city and the shire when it comes to attracting this investment and also into a shire in North Aberdeenshire, which I can phrase about in Peterhead compared with Mintrose in Arbroath in ports like that. We've got to think as this investment comes in, are we increasing the people that are commuting? Are we fundamentally changing the makeup of where people's jobs are and where they're commuting to and from and how is that going to affect the region as a whole? I'll now bring in Maggie Chapman to be forward by Kevin Stewart. Thank you very much, Claire. Good morning to the panel. Thank you for being with us this morning. I've got a few questions around infrastructure and supply chains and transport. So, Mikey, if I can start with you, you said that people aren't aware they don't know what the necessary targets are and they don't necessarily know how they apply to them, but some of your members do. Are there good examples that you can tell us about this morning that where some of your members in the northeast have said, actually yes, this matters, this is good, this is what we're doing and this is how we can move ourselves and our business along that path. I think it's more, they've taken the decisions themselves to do something about it rather than accessing the fund that's available, that's the majority of what the majority of businesses are doing and again their focus isn't to, they don't wake up in the morning saying, I want to achieve the government's just transition targets, they say I want to reduce my energy bills and how can this cost me less and they'll do little things like change the light bulbs and sort out drafts and things like that. I honestly cannot pick any examples of where I've spoken to a member that has actually accessed the just transition fund, perhaps that's my fault for not looking widely enough but I have tried, but I think that comes down again to the current economic situation where businesses aren't looking to get a loan. For many businesses, especially the ones that have only started in the last few years, finance is at its most expensive point right now and any business decision that says when something's at its most expensive, you should buy it, you should do it, you kind of have to think twice about it. I have had a look through the list of projects that have, the bigger projects that have received funding and I think they're fantastic and that funding needs to continue. I do think a big chunk of that funding is in Aberdeen as a city and there might be more opportunities in the more rural areas to spend an additional round of funding. The project that we've got here at Rail is a great example. The Calbrick Trust, the work in Fintorn and the River Fintorn, the work of the James Hatton Institute are fantastic and I'd like to see more projects like that in the wider Aberdeenshire Murray area and that might help to increase engagement and bring other businesses on board. Okay, thanks for that. That's interesting and I suppose we're interested in how the Just Transition Fund is working, others will maybe ask more about that but I suppose there's just general work, you know, the fund is one element of the Just Transition and I'm wondering when you identify the tensions between the city and the shire what is it that you think small businesses or start-ups need other than investment other than the funding in terms of creating the right environment for sustainable development of their businesses? I wouldn't say tensions, I think there are brilliant examples of where the city shire worked together, the regional economic strategy being one of them but one aspect is including Murray in this that Murray is tied to the Highland Economic Partnership and the city and shire have their own regional economic partnership so that's an issue there. The organisations that might be driving the Just Transition and are based in the city and shire might not have the linkages into Murray and that takes time to develop and I know that we're not speaking about a year or two years, the Just Transition will be a further long-term prospect so there could be a driver to make those linkages between Murray and the city and shire and to improve them. Sorry, was there any other aspect to the question? I suppose are there other things that you're looking for either in terms of regional strategies, I mean you mentioned the economic strategies. The strategies are there and I think the joined upness of the Just Transition project and these regional strategies are there as well. So if the strategies are there, why aren't SMEs more aware of one of the outcomes of the strategies will be lowering carbon emissions? What's missing in that joined upness? It's similar to when I said that small business owners don't wake up and think I want to achieve the government's targets, they also don't wake up and say oh I've just read the regional economic strategy, it's how that filters down into that wider small business pool, it might not be the specific words that are used, they might not know the absolute direction but what needs to be communicated is how they can follow that direction and what kind of route or the easiest route or the best financial route for that small business owner to take to reach those strategic targets more than actually knowing exactly what that strategy might be. And what does the government, what do we need to do to enable that communication? Information can go out but you can't force anyone to read that information, what the mechanism that I would use is funding. When you start putting pound signs to things, people start taking notice. If I can focus just a little bit more on a certain subset of SMEs, those particularly engaged with supporting renewables themselves and supply chain issues, what are the barriers or challenges that your members are telling you they are facing? I imagine the short answer is going to be funding again. One of the more general issues about supply chain is the payment issues, and late payment, which can be an issue. There are examples, I was speaking to a larger Tier 1 main contractor the other week who has some fantastic 14-day payment terms for their subcontractors but that's not universal. So smaller businesses can be reluctant to get involved in the supply chain if the main contractor or the Tier 1 contractor doesn't have a good payment record, they don't want to put all their eggs in one basket pretty much. So that's one of the main barriers. Other than that, I think that small businesses are fairly well placed to take advantage of the opportunities. Obviously, the investment in skills will make a difference as time goes on and to make small business owners, employers aware of the skills they will need to take advantage of those opportunities going forward. Jordan, if I can come to you now. You hear for the campaign for north-east rail and obviously transport is, I think all of us understand that the importance of transport for the gest transition. Can you just outline some of the reasons why you think prioritising public transport is so crucial, not only for Scotland's ambitions in this space but particularly for the north of the north-east? Yeah, so transport is often thought of as this kind of a field of its own, kind of a siloed off to be its own thing, as if it doesn't interact with other things, but really transport is the foundation upon which we build our lives. It's interwoven into every decision that we make. Our sense of place comes from where we live and where we live often comes from where we work and that is intimately linked to transport. I can give you a concrete example of that. Two multimillion pound international companies were founded in Fraserborough. Brew Dogs is one of them and the second one is Power Jacks who make jack screws for aircraft and ships and things like that. Both of them felt that as they were growing, as they achieved the growth that they needed, they moved out of Fraserborough and to Ellen. Ellen is only 10 miles down the road. The difference is Ellen's got a dual-carriage way connection, Fraserborough doesn't. So I'm not saying that transport is the sole reason that happened but it's certainly a huge part of it and when we look at what these companies were saying publicly, it was both that they struggled to attract investment where they were and they also struggled to keep and attract skilled staff to the area. So people are looking at, looking at the area and thinking, oh, it's too far away. It's the absolute rurality of the area but it's also the perceived ruralness of the area and how far away it feels to people that's making a decision. I just find it astonishing that such huge growth can be achieved with just moving 10 miles down the road. It's not like they've moved closer to Edinburgh or to the central belt, they've just moved to Ellen. So transport has enormous implications for our lives and it can deliver so much for us as well. When we think about this rurality and perceived sense of remoteness, rail can deliver regeneration. We look at the headlines that's come out of the borders. The head of the borders council a couple of years after it opened said that the rail had breathed new life into communities that were declining. Just last week we had another headline come out of the border said that a valley community had been completely revived. Spoilers but just tomorrow there's an article coming out in the PNJ about the three-year anniversary control opening and again there's interviews with small businesses in there who have all said that the railway has made an enormous difference to their trade and we've seen the population of the town increase and we've seen that town thrive whereas before it was maybe a satellite town to to Edinburgh. It's now thriving on its own in its own state. So transport is much more than just what it is and like I said it underpins everything we do and when we think about housing when we think about employment transport is intimately linked in that conversation. Okay thanks and I mean I suppose you mentioned some of the successes that other other reopenings or new rail routes had had. Could you just we're thinking about the gest transition we're thinking about the shift away from a fossil fuel based economy so their benefits obviously to businesses and you've outlined some of them. What is it specific about rail that's so important? Rail is important because it is a separate secondary line so it delivers segregation. So what rail can achieve is modal shift so when we've got in the example north of Elin to Fraser and Peterhead we've got the two largest towns in the phrase the first and the third largest towns in Aberdeenshire and a single carriageway road that's shared with enormous amounts of freight and road freight because there's no other option it's shared with buses which get delayed with cars it's shared with drivers and it's shared with people that have to drive and tax as well so everyone has only got one option if we've not got a railway. If we introduce a railway we can shift the freight that can go on the rail to the railways things that can go in containers on the railway that relieves the roads and we can shift an enormous amount of the cars on to the railway again relieving the roads and that increases capacity on the road network which gives you better buses it reduces the frustration of drivers being held behind slow lorries and which reduces accidents and it delivers the thing that we hear from business constantly is predictability and reliability of transport so when there was a study done in 2016 into reopening the historic line the historic for martin and buccan line and one of the things that was raised there I can quote it directly is uh phrase when Peterhead ports are key generators of freight for oil and gas and subsea so increasingly renewable industries where vessels only have a limited time at birth slack must be built into freight movements leading to inefficiencies and higher costs for these businesses which reduces their competitive nature when compared to ports such as Aberdeen and Montrose so again I'm talking about this this competition within the region and rail by introducing rail it it it it can the modal shift is the thing that we're looking at moving things off of the road and on to rail and and that click miss chatman can I make some progress and this time I'll bring you in at the end so okay so Kevin Stewart will be followed by Brian thank you convener if I could turn first of all to mr Duncan and he's talked fair about the fact that there seems to be a lack of communication around about just transition to smaller businesses mr Duncan and I had the pleasure of visiting businesses in Rose Mount a fair while ago now I think maybe over a year ago now top of the agenda for those businesses at that point was the cost of energy do you think in terms of the communication that needs to come across and obviously you've also talked about possible funding changes do you think we need to get across to businesses that the just transition and the changes that we are going to make can play a part in reducing the cost of energy which we're causing a great amount of grief at the time that we visited those businesses and probably that grief is greater now yeah the challenges of running a business are still very similar to when we had a wander around rose mountain last year the answer is I think to aid the communication we need to use much simpler language and not because business owners can't understand what what we're talking about but it's just when when we're around a committee table like this and we're speaking about just transition every day or whatever the business owners have got their heads down running their business that to get them to to look up and listen we have to speak to them in plain terms about what they can do to to make that business more efficient whether that's energy saving or in cash terms and so yes I think there in the communication terms the simpler we can communicate the better good we visited a framing business that day Kevin who was up to his eyes with work good thing for him but I would imagine that the likes of him and others that we visited and others right across Aberdeen in the northeast are in a similar position where its head down get on with the work and not enough time do you think that the the government local government other public bodies are missing a trick by not using utilising the good offices of the fsb and others to get that communication out there to businesses to get them to think a little bit differently take that we time out with the information that's supplied in order to get it right for their futures yeah I don't disagree that there is work to be done by business representative organisations local authorities and the government to to make sure that information is not just out there but it's actually being understood and and read properly I think if it was better explained about the benefits that business could get from taking those first couple of steps into a just transition future or a low carbon future then I think small businesses would listen again I've mentioned it before it comes back to to the funding aspect there they're primarily there to to run their business and their heads are down because they're busy they're busy working away and to get them to lift those heads and think about something else does require an extra stimulus so communication is king as well as funding here yeah basically I think what you're driving at they go hand in hand if people don't know there's funding available then they're not going to go for it okay thank you mr Duncan if I could turn to to mr jack and I'm gonna go a wee back bit back into history obviously investment in rail is pretty costly I think it would be fair to say and often the assessments that are done that lead up to new rail projects they can be quite onerous can they not and you're embarking on some of that work at this moment in time if we go back to the expected patronage of Lawrence Kirk station let's take that one as an example it transpired that once that station was open that patronage was 77 percent if I remember rightly greater than had been envisaged in any of the assessments I would argue that that was partly because a bigger car park was put in place than was originally envisaged as well we've also seen increased patronage from changes to timetabling in the northeast I think if I remember rightly after the timetable changes between Inverruri and Stonehaven patronage at Inverruri increased by 80 percent do you think mr jack that there is the patronage levels on that for Martin Buchan route to justify the reopening of that railway absolutely when we compare the railways that let's let's look at the borders railway when we compare the line Aberdeen to Peterhead sorry dice to Peterhead and to the borders to tweedbank as it was if we think back looking at history to the borders railway there was a certain opposition to extending the borders railway as far as tweedbank there was a lot of opposition and it was thought that the stations in Edinburgh and close to Edinburgh would would be the only ones that would justify themselves economically but actually when and that's what the studies showed and that's what the consultants showed but actually when the line opened and we got the year one review in and we got the year two review in we saw a wholesale underestimation of patronage on the entire line but when we look into that that data more granularly we actually saw that it was the stations that were furthest away from Edinburgh that outperformed that massively outperformed and the stations closest to Edinburgh actually underperformed their expectations and the difference in Peterhead in Peterhead let's just compare apples for apples this line to Peterhead is within half a mile of the length of the line to tweedbank now we are looking at another we are proposing another 20 miles to Fraser as well there's no getting away from the fact that this would be the longest railway reopening in Scotland at 50 miles ish but just to compare the 30 with the 30 on the Peterhead branch the population is roughly 88 to 85 percent of the border so it is less the length is like i said almost exactly the same but when you look at the distribution the largest population is in Peterhead right at the end of the line the second largest population is in Allen more than half of the way there so if we think about the the the borders and and how the the stations that were furthest away outperformed and i'm speaking 800 percent 1200 percent for the example for tweedbank and 800 percent for gallousheels compared to the stations closest that's more that's going to more than make up for the 15 drop in population compared to the regions so that modal shift do you think is important there really is important to gain that modal shift again i'm going to go back into history because obviously it's been a fair amount of time since for Martin Buchan closed but it closed to passengers before it closed to freight and if my memory serves me well in terms of history um it wasn't until around about the mid 80s that the freight aspects from Frezibra Seist actually ceased operation now you talked about two companies brewedog powerjacks i'm sure that all of the committee are aware of these companies making that move just a wee bit seist in order to get the linkages do you think if a freight operation had continued to a rail freight operation had continued to exist that those companies might have stayed in Frezibra because it would have been easier for them to ship their gates i don't want to second guess these companies i'm needed to sit on the boards these companies but i think the answer from my perspective is quite an obvious yes because the transport problems that is that has been raised in the 2016 study which was just to get us on the table that the the findings of the 2016 study were actually reevaluated by nest trans in 2022 and an evidence review and they were found to largely still be the problems that were identified in 2016 were still relevant in 2022 and so when i speak of the 2016 study that is is up to date it's going to be but that problems were unreliably afraid having to build in slack because of the shared road space and the the frequency of accidents and the knock-on effects that that causes and so if they were shipping by rail they would they wouldn't have to deal with them problems and they would also benefit from the the long connection the connections to the entire UK rail network so they would they would get down to their processing plants their distribution their distribution plants the central belt but they could also continue the trains on and across to the continent as well so one of the other things that the committee has heard a lot about is increased capacity increasing capacity and modernising our ports and harbours in order to to maximise the opportunity that renewables offshore renewables can give us and obviously i certainly Fraserbury i've got a plan Fraserbury report i've got a plan at this moment a pretty ambitious plan in terms of expansion Peterhead always has plans we have seen the opening of south harbour at Aberdeen what parts do you see a rail playing in terms of the transportation of goods to to these ports and how much of the study that you are undertaking is looking at freight and not just passenger movements so i'll answer it in reverse the study itself freight is we've we've just last week had to reiterate this me had to but we reiterated this as to the consultant in a meeting that freight is as integral to the study as passengers because we're aiming for that modal shift the focus of our study is achieving the benefits that we saw in in the borders and add them to that by the freight element because there's one thing that the borders the borders to all these benefits but they never actually achieved the shipment of freight that they wanted so a lot of that is lessons learned to the borders a lot of that is lessons learned from leaving and trying to get diagio on board but freight is an integral part of it and like i said it's chasing modal shift if we can't get these hdvs off of the single carriageway roads we're not going to solve the problems areas that we identified in 2016 and reiterated in 2022 so um what role do i see it playing um we're not naive enough to think that uh we're going to see winterman blade on the back of a train anytime soon especially through the turns number doing that's that's just not going to happen but what we can do is we can look at the businesses that are suitable for yeah um so to be suitable for rail it needs to be heavy or bulky it needs to fit in a container and it needs to be regular and ideally long distance as well um and in the northeast we've got a wealth of businesses that that meet them criteria broodog is one they're shipping cans they can ship empty cans up they can ship full cans back same as the success we've seen the highland freight highland spring and um in perthure um we've also got uh mackeys do ice cream we've got the exact same thing so food products we've got gray and adams who build uh hdv trailers we're not going to get the entire hdv trailer on but they take um prefabricated parts like uh axles like steering assemblies like like big big chunky parts for for to go on to hdv trailers they come all the way up from lester um and asco um ship things between the ports but they've they a lot of that won't fit on freight on on rail but a lot of it it just goes into a container on the back by lorry in a way so there's a huge opportunity there another opportunity we see is um the acorn project which was a bit of a political football for a while but um we now see that that's um progressing um so acorn project is um a carbon car capture storage project in sinfergus between frisbrat and peterhead um a lot of the co2 is going to be pumped up from grainsmouth um directly in a reversed um pipeline but they also plan for a lot of it to come up from all over the uk um to peterhead port and then on to the back of a lorry and driven from peterhead port to to sinfergus so we see an opportunity there to cut out the middleman and put a rail link directly into um sinfergus and we can we can see the co2 wagons come up from anywhere in the uk rail network up to directly out of sinfergus we're not burning the roads um and when it comes to the long-term ambitions things like producing hydrogen um or even sustainable aviation fuel we get that two-way traffic as well so we're not at any point in the in the supply chain are we shipping empty wagons grant i've got one final very quick question come here um and that is a round about um what work have we done in co-operation between the two um to see what impact positive or negative i suspect it would be positive on the reopening of railway stations in the northeastern beyond or even those timetabling changes that i've mentioned as well has the fsb done any studies in contour for example about the opening there was there any studies done in laurence kirk around about the reopening there um and is that maybe something that um your organisations can do in collaboration to see what benefits or any dis benefits that are um to reopening station i can assure there are you there will be collaboration from today onwards um and i can also tell you that i've actually used contours station myself to commute into Aberdeen um before driving and then you might think about extending the railway to bucky harbour as well which is one you didn't mention about uh taking advantage of just transition funding thank you jordan um yeah so we like i said we work off um we like to work off evidence that is available um to us we we didn't like to just as a as a campaign because at the end of the campaign it's just a group of people a group of there might be somebody there might be nobody um so we like to to boost evidence um so for us as a campaign a lot of our work has been retrospective and working with nest trans um to to tease out the information that is there and provide that um forward going forward and we are raising a bit of funding so we're looking at funding studies into these things case studies um and building up that evidence base but there is a wealth evidence already out there from the local um transport partnerships um on like we're saying that how often um we underestimate the popularity of these stations thank you convener um thank you uh brian what do you wish us up to metric thank you convener uh good morning i'll i'll be brief i'll ask my question in two parts the first part to you jordan second part you might um the scolish government to have a target of reducing car mileage by 20 by 2030 and i'm interested in the impact the currently what we're trying to do is prevent cars coming into city centres i have my own experience of that in Aberdeen trying to navigate myself around a couple weeks ago having not been in Aberdeen for a while i wonder if our public transport system has the capability currently to pick up that that slack if you like of people trans or travelling into and out of our city centres for for you know either for purchases or for work um and secondly the impact what impact on trade that preventing people being able to come in and out of work will have or coming out to show up will have on our city centres uh our sort of recruitment retention and and you know as i said in terms of turnover for businesses so initially to you jordan around are we set is the north east set up to take up that reduction in car i would say we it's the infrastructure in the northeast in terms of public transport when you get out of the city is woefully inadequate um we we go back as far as beaching the northeast was one of the the hardest hit areas when we look at the what well was compared to what there is and though we're not a nostalgic campaign at all we're looking at the needs now and and the problems now and the solutions now but to give an example um i got the train in from dice today which is the closest station um the closest station to frasbyt and peterhead by mileage if i was to catch the same train that i caught today sorry to frasbyt but i was using public transport i would have had to leave 44 minutes earlier um from frasbyt to get the bus and 36 minutes earlier from from peterhead to get the bus come that's compared to driving um but when we're speaking about public transport there's there's the availability problem and whether you've got the options now um a lot of the time we look at stick solutions and we're looking we're looking at um things like congesting charges and um like like that's been taken in arboradain and bus gates and things like that but we need we're actually both carat and stick in my in our minds a campaign we're never going to achieve modal shift and by modal shift all i mean is people deciding to leave their car at home and get public transport the only way people make that decision and we know ourselves is is if there's a better option in the car we're only going to leave the car and get something else if that something else is better than driving um so it needs to either be faster it needs to be more convenient or it needs to be just just better somehow and sometimes um so that's the availability problem but sometimes um you've got the option but you can't quite make it work and that's the first mile last mile problem so you might be able to get into say the centre of arboradain but you're not going to the centre of arboradain you're going to industrial estate or you're you're going to to all ends where we're or you're going to the new harbours for example so there needs to be this um as mike said there needs to be joint up thinking and we need to start thinking a lot more about integrating our transport system so um often i look at timetable railways timetables and bus timetables and we see that there's a train just for example sake arboradain to dundee but there's also a bus leaving within five minutes arboradain to dundee and it's got the same stops now why is why is why why why is that a thing um when if we should be looking at sorry we should be looking at maybe having the train stopping every so often and being able to get off the train onto a bus directly and connecting there so so we need to look at integrating our transport system um and that's buses trains to buses but maybe then to active travel as well and and and how do we get not only to city centres but to where we're actually going um before mr jack here mentioned carrot and stick i'd written it down myself and he mentioned convenience and i'd written that down myself as well um so i'm back exactly what you're saying i'm not going to repeat that but there's no doubt that restricting traffic into town centres has a negative impact on trade and people need to be where they want to be to to to buy the products they need the services they want and there is a kind of change required to get people to think differently to to think to to be willing to park in a maybe a satellite town like like contour we've mentioned before and get the train into a town centre um but not just in Aberdeen i'm thinking about our smaller town centres which are going the same way um not just pedestrianised but pushing cars out wider at a time when there is no carrot or no available parking round about to help people get in to support those small businesses that are in our towns um and to come on to another part of your question about the infrastructure when i was speaking to a transport and logistics company um two or three weeks ago um about um changing their vehicles hydrogen electric however they want to go and like the the main thing is cost i can buy a a truck and for x 100 000 and a hydrogen or electric one will be 400 000 so it's four times four times the cost but the second question is infrastructure it's not the infrastructure does not exist right now for that logistics transport company to invest in an electric or hydrogen vehicle um to make it sustainable for what they do going forward um and it will take a vast amount of quantity of of money and time to uh to get that appropriate infrastructure in place maybe we had that before aligning boston a rail timetable so i believe at the end thank you it's connected to brian's question so it's a the just transition fund is a 10-year fund and we're in kind of the end of the two years and you've both described i suppose particularly geordan about a kind of inclusive integrated network system you know transport system that would support modal shift and that would be available to everybody and would be accessible which you think would be one of the kind underpinning you know reasons for a just transition do you feel that these type of conversations are taking place enough in the northeast in murray or mike who'd said it does feel like it's still Aberdeen or it's still oil and gas and do you think the broader and who should be leading take the broader discussions taking place and who should be leading on that and can you drive in that forward do you think i think that again i'll make the distinction between Aberdeen city and shire and murray they both have distinctive strategies for dealing with it but they're not used to the linkages between those two areas unless you go back to the old the old grampion region which which was obviously moved away from so there are plans in place to make it more integrated i'll maybe just put the dualling of the 96 up there as well as a possibility but there's always more work to do is what i would say and there's no doubt that an improvement in the infrastructure would help our small business community would help customers get to them and for those businesses that export or or have products to get out of the northeast and then it would help help that as well and i just want to touch on on park and ride briefly and it has to be free no one's going to pay for a park and ride system and so that has to be subsidised i would say by the local authority or whatever it might be to make it viable at all i would add we often in transport lock ourselves in to long term plans now long term planning is an absolute must with with transport i'm just going to say that i'm i'm not i'm not saying anything different but we need to review a lot more than we do now for example we've got stp r2 which is our transport investment now through to 2040 and so that's a 20 year plan from that we've got our local regional transport strategy and now we've got our local transport strategy that's just recently been published and they're all based off each other um down and down the line but then congruent to that we've got the the government's 20 percent reduction in car target by 2030 now it's mentioned in all of these documents but there's there's an effort to to look at each each element of that and say well how does this contribute to that goal where if we're building a a city centre of is that going to get us closer to that goal or further away from that goal so every time the government takes out a goal or a target we should be reviewing these documents and saying well we've got this plan is that going to help us that is that going to be a detriment just to pull some examples for the the regional transport strategy there's a lot of good things in there there's um amdian rapid transport um for example um a lot of investment in parking ride and things like that but we're also building um the the beryden corridor which is a city centre dual carriageway um and that's been in the works for for for a long long long time so there you go speaking of history um so has is that just continued on and been pushing push and push because it's been on the plans or um has that ever been looked at well is that going to help us reach our 20 percent reduction goals now as a campaign we're a real campaign we're not an anti-road campaign um the merits of the beryden corridor we've got different views within the campaign but that's just a perfect example of should should is that going to help us towards a 20 percent reduction goal I think so personally and in terms of the just transition fund which is the part of the inquiry I think Mike you just referred to the fund earlier because there is the fund that's administered by SNP and then we took evidence from local community groups who were applying for the community participa budgeting side of it is it a fund that you think is relevant to your members because you said you'd looked at the funding it tends to be bigger projects bigger companies and then you've got the discrete pot of money that's for local communities and that we met them at tendies when we're voluntary groups charities who were accessing that money is there anything from the funding that's been announced it's reaching smaller businesses or designed for them do you think this should be if there's more? Well yeah from what you said there it's a bit in the middle that that's missing you've got the funding for the larger businesses the funding for the community groups but where do small businesses go especially those ones that don't want to to have the risk of of alone and I don't want to be picked up wrong I think the Scottish national investment bank is highly important and using them to to transfer funds from the Government to businesses and leverage that that kind of private finance is very important and the FSB have called for to put a measurement on that for 20 percent and I'll just make sure I get this right 20 percent of their annual investments to be targeted at smaller smaller businesses and that can be taken and applied to to just transition funding as well but I do think it's vitally important that there's more of a funding mix it's not the only way to get money into into smaller businesses and that's where I would have the the grant scheme administered by local authorities however that's chosen to the percentages there for the the business contribution and the public contribution. As we all know that local authorities are under extreme kind of financial pressure they've not got a lot of you know capacity to introduce kind of new funds should the government have put in I think it's 500 million over 10 years it's quite a bit should that maybe maybe local authorities aren't the right place to channel it through for FS for smaller businesses but that's only new that's that's money that's on the table it's only place that money is coming from that's there to spend it's on the table do you think there should be sorry when I was speaking about local authorities more just be the administration side of they've got the knowledge on the ground in the local areas of taking the money that's available and providing it and assessing the applications and the whole process of application needs to be as quick and easy as possible for small business owners if we're speaking about a two-thirds public one-third small business you would if a small business very small project if a small business owner said I've got 2,000 pounds to invest and then the grant fans might say right here's 4,000 pounds do a 6,000 pound project or I've got 10,000 pounds to invest here's 20,000 do a 30,000 pound project something like that is what I am suggesting and Jordan do you want the in terms of just transition fund you know we've talked about where the fund is currently focused do you think the focus of the fund is correct well for us as a campaign we wouldn't be where we are with the just transition fund and it's maybe for a better context it's important to explain how we got to where we are we the just transition fund was never set up to fund campaigns like ours and we had to do a lot of a lot of negotiation a lot of back and forth with the the Aberdeen Grampian Chamber of Commerce to be able to to take just transition to transition funding because it's set up for businesses and to do the specific projects for things like upgrading boilers and solar panels and XYZ so for us as a campaign we have had to get a consultant on board and the Chamber of Commerce has had to take the money take our money and pass that to consultant in this triangular this triangular setup so it's been quite difficult for us to get that funding and I think the arguments I'm making today is that transport is so integrally important to the just transition itself I think I think it it should there should be a way for for campaigns like ours to there should be a separate channel for campaigns to apply for us what I'm getting at but the it's like I'm saying that all the way down from the to MSPR2 down to the regional transport strategy we are separate we are added on there's nothing to say that we're going to get to the the end of the the funded portion of our study what two-thirds funded so far even if it's successful there's nothing to say that we're going to get the funding to continue so we'd like we're hoping and we're certainly going to be applying that the just transition can fund will be there for us but there's no guarantee that that's in place and there's no mechanism for us to apply for that directly okay if there's no other questions from my my give it you here you can come in again just a short question thanks clear what one of the things we've kind of touched it in passing in passing but I'm wondering georgian could you just say a little bit more about the broader community benefit of of getting our infrastructure right rail is one element of that but but what's the because we've talked about businesses we've talked about SMEs and others and and commuters but in terms of community benefit can you just expand on that so the thing that it comes down to is regeneration Fraserborough and Peterhead are regeneration priority areas to the Scottish Government but that regeneration priority area covers the entire northeast coast it goes as far as Banff and I think it actually goes as far as Bucky as well so when we're speaking about investment in communities in attracting investment improving infrastructure removes that sense of remoteness which attracts investment and the investment is what gets me so rather than there's there's kind of this backwards thing they're the better infrastructure you've got the more investment there is in the local area which means the more facilities you've got the less in the area which actually means the less commuters that is so by investing in transport you're reducing the amount of people traveling which again is beneficial for our carbon emissions because there's less people traveling overall because we've got more facilities locally we've got we've got say a cinema locally we've got a hospital locally and we don't need to go into the city to do that because we've got rid of that sense of isolation that these communities suffer. I have a pet theory that Fraserborough and Peterhead are some of the strongest pockets of Scott speakers in the country and I have a pet theory that that's because these communities are so isolated and they've now had the chance to mingle in to lose their accents so we've kept we've held on our accents compared to the other folk when we can make them. I think that's a good example but we're talking about like I said model shift, reducing frustration, reducing accidents and yeah investment locally keeps people local. Okay thank you I'll now bring this session to an end I'd like to thank the witnesses very much for appearing for us this morning and I'll briefly suspend the meeting as we change over our panel thank you. I now open the meeting again I welcome our second panel of witnesses we're joined by Fergus March, policy adviser, Aberdeen and Grampian Chamber of Commerce who's attending virtually, Mark Munro chief investment officer from Scottish National Investment Bank and Rona Nohara chief executive crown estate Scotland welcome to the meeting if members and witnesses can keep their questions and answers as concise as possible that would be helpful. I'm going to come to Fergus first of all so you might have if you heard the first panel we are looking at a just transition and one thing we're interested in is a definition and whether there's a shared understanding of what it means and if everybody's working towards the same goal in the north-east in Murray and how we would know if we've achieved it or not so I don't know if you want to come in first from your perspective and that of your members it's a tricky one and thanks for like me come along this morning and sorry I can't be there in person to speak to you so I think this is a constant debate but from a business and economy perspective which is what I'm here to offer today I don't think we should overthink things so I'll try and keep it as simple as possible I think a just transition should be one of which doesn't put people out of work it doesn't make them accept a job at a lower salary to the one that they currently have it's a transition that creates new economic opportunities that are at least at the scale and to the value to the economy of those that have come before the risk I guess in the context of the north-east of Scotland which has been geared towards oil and gas for some decades is that the move from oil and gas to less carbon intensive industries with that you perhaps see a significant drop in in gva as it currently stands the value of jobs in those new industries does not match the value of jobs in oil and gas so that to be avoided and I think a just transition crucially is one that doesn't create a cliff edge it doesn't say oh today we're turning off the taps on oil and gas and tomorrow we'll start thinking about what next it's a change of state over time so I think while from the chamber's perspective we're fairly clear on how we can make a transition just and we're certainly not saying it's going to be an easy process to get right and that has to be a common endeavour between the business community industry the government and the public at large and do you feel that that's a shared understanding with other organisations I mean you've kind of said it out about how the chamber would define it do you think that's a common understanding in short no I think there's I think there's um probably a few different views at play about how that's understood it's certainly a definition that that we use as our as our working definition I think the the members that we represent so that's 1200 businesses across the region you know a third of those probably in the energy sector two thirds of those in other industries I think broadly they are fairly square behind that sort of definition um and you know ultimately I think this comes down to jobs um people whether it's from a community perspective or a business perspective or I hope certainly a government perspective um realises that you know a major industry that has sustained economic prosperity in the northeast of Scotland for decades has been the energy sector how we sustain that going forward is the bit the puzzle we all have to get right um I think you know as a working definition what I set out isn't a bad one um but um you know is there a common understanding that that's the goal not necessarily okay thank you um Ronan ohara for coming to you with the same question around an understanding of a just transition whether it's shared and how we will know if we've achieved it or not thank you convener and committee good morning and thank you for the opportunity to present evidence today I think in crown state scotland um the interpretation that we would adopt is slightly broader and the definition lies in the two words the transition of course being clearly that requirement that inescapable need to transition or economy from a carbon based economy to a green energy economy and all the facets that go with that importantly you know remembering that that is skills and education and food supply and transport and housing and social infrastructure and critical infrastructure and of course the just aspect being in the fact that um that's the piece we control most that's the piece where we have the opportunity to decide how we respond to that imperative for change and ultimately the response that is put in place that must be put in place is one that leaves nobody behind it is one that provides that security of employment that the individuals and families and communities in society that are least well placed to carry the burden and most vulnerable to the transition are cared for and accommodated through the transition and supported through the transition and do you think we need definitions or you know measurements because you've described which would be I think a fairly common understanding of what a just transition is that nobody's left behind but how do what measurements should be using to know if that's been achieved or not um I think it would be helpful to have a do you think rather than you define what they would be do you think it would be helpful to have a set of definitions and measurements well I think that definitely in terms of as an organization and the aspects of the transition that we are directly responsible for I think it's absolutely key that we develop and have metrics that support that long-term policy objective and help us understand if we're achieving it I think that scales up then to society I think that there needs to be an understanding of where we are on the journey and I suppose that falls into the remit of national statistics in some respects and do you have uh as an organization have a set of metrics already or is that because we heard from I think it's SSC last week that they have a just transition plan in place and they're attempting to measure in is that something that the current estate is so it's a very live conversation at this moment timing in currently Scotland on the basis that we are in the process of developing our new copper plan and the associated performance framework and metrics for the period 2025 through to 2030 um and although many of the metrics that we currently have talked to um helping us understand whether or not our tenants and customers of the communities that we serve and support are progressing through a transition I think there is actually an opportunity for us to take a more specific and conscious approach to that okay thank you and mark if I come to you and I'll just uh just a brief answer will suffice because other members I think will ask questions around this as well but in terms of the Scottish National Investment Bank what the understanding of a just transition is and how do you think is a shared understanding within the north-east in Moray? Yeah good morning thank you as well the bank has a mission to support a just transition to net zero and I think we've recognised that and the investments that we have made we've made four investments in the north-east in Moray totaling 100 million pounds that's recognising that the energy system of today which we probably classify supported by the oil and gas supply chain will be will be the firms and the people that will support the energy system of tomorrow and that that's been the basis of us making these investments if you take a company such as Nostar which is currently fossil fuel dependent for its revenue there's a plan to move to renewables the bank's investment will support that verloom is a subsea battery provider currently was focused on oil and gas is now focused on the renewal supply chain so it's a way what we're saying through these investments is that we will support that where there's a challenge and to answer the question around as everyone understand that I'll come up from an investor perspective no they don't we have seen a flight of capital from these businesses that support the supply chain for for what is the today's energy system and that's because it's fossil fuel based and they're not recognising the opportunity that comes from say something like Scotland and the huge numbers of investment that that will require and that that is a big challenge so I don't think they're recognising the same definition. Colin Beattie to be followed by Colin Smyth Thank you, convener. As plans to tackle climate change and just transition become much more clear which to me they are now you then got to look at the other side of the coin which is money nothing happens without money if we can't generate the capital to pay for this then we're in real trouble so I've got three questions that I'd like to ask you in in one hit. I hear a lot about this huge amount of private finance that's available and keen to invest now I'm not sure where that's coming from that's less clear to me is it domestic UK is it overseas capital are we going to be competing with North America EU and so on for that for that resource clearly private capital needs to make a return and it isn't going to invest in any project that won't give it a return so discrete projects that are profitable may be sellable in terms of finance from private sources how do we access that do we have to access it through the London markets are we able to reach out ourselves and interest companies I mean we're talking we're talking about huge sums of money here we're talking about tens of billions of pounds I see lots of different figures for the same projects which are all over the place but clearly tens of billions are going to be needed where is it coming from is it international is it local do we have to go through the UK government how is this going to work now there's other projects my second question which are clearly not profitable and never will be profitable but nevertheless need to be funded now the only people that are going to step up and fund that is the state either UK government or Scottish government both of which are strapped for cash so how do we get the government funds for that I mean UK government's already got problems selling its its own paper hence we've got you know various various other means to do that borrowing costs are an issue because of course if we're going internationally UK is now a third tier in terms of in terms of investment quality and Scotland of course takes that same same thing will people buy UK paper if we if we if we launch it we're talking about tens of millions of pounds here can the market absorb that I say tens of millions of pounds because I'm assuming that a fair proportion of the projects that we see coming forward are going to be projects that are not profitable things that need to be invested in to make other parts of the plan viable and the third question can we afford to borrow can the government can either government afford to borrow there's two aspects to this one is of course that national debt is colossal the proportion of national debt that we're having to pay off in terms of from our revenues is at an all-time high what about our balance payments if we go and borrow overseas and I'm talking about at scotland or the UK we borrow overseas we've got to repay that capital at some point we've got to repay a return on the investment can we afford to do that has there been any costing put against this so basically it's a big sort of wrapped up finance how do we do it now mark i'm going to turn to you first because you're the obvious first person to ask sure let me go first then there's maybe a lot about central banks and that that's more a challenge for us to answer so i can answer what we can do to support the investment that'll be needed so we are engaged with both UK and global investors who recognise the opportunity that we have in the move of the energy system here in scotland and in the UK i'll refer to scotland previously and i'll continue to refer to it given that the opportunity it presents 40 gigawatts somewhere between 17 and 28 billion pounds of economic activity just in scotland alone and then wider benefits beyond beyond that they are and so you will hear there's a wall of capital that is not available to us just now investors require certainty and at this moment there's a challenge around the the planning system and it taking longer than possibly is is required an example there's other countries where it can take three years and this is from our portfolio company it can take three years in the UK scotland in the UK we're seven to ten years so as an investor you're looking at a three-year period or a seven to ten year grid connections it's been worked through but there's still something to be required on grid connections for when it comes to the offshore wind opportunity that we have that will drive that economic numbers have shared and then the the pricing mechanism once we have certainty around that there will be the capital that you hear of will be available well that that's because these projects will generate the returns that will be acceptable to to these investors what's needed in interim is is a blended finance approach so the projects that aren't profitable unless they become profitable will not attract capital but what we can look at is a blended finance approach where there may be some form of public grant there then can be some form of public commercial capital and then commercial capital layered upon that and that may be what's needed to make some of these projects that would be un-commercial or un-profitable sorry profitable because of the way in which the capital stack is is put together so that blended finance and that certainty is critical we're also aware of so that the opportunity lies in the supply chain the funds will come for the developers once they have that certainty the supply chain is challenged and that there's still market risk and that market risk is created by the uncertainty i referred to but the elements of the market risk it's maybe worth calling out one is around technology risk so when it comes to offshore wind and floating in particular so scotland has an advantage when it comes to floating offshore wind because we have the what we termed the oil and gas supply chain just now that will become an energy supply chain in the future we know how to to transport huge objects at sea we know about subsea engineering that scotland is 48 watts is referred to the us inflation reduction act is aiming to create 30 gigawatts by 2030 so for the first time in hundreds of years we're the same size as opportunity as the us and that's so important and that's why there's global capital which will will come to scotland but that's supply chain and the supply chain development plans which were submitted suggest or in aggregate will be somewhere between 17 and 28 billion that can only be accessed if we address the ports and infrastructure and create the manufacturing capability we have the skills but we don't have the investment yet to do so because of SNIB is looking at this more holistically so if you want to take the fixed supply chain we did miss the opportunity that's an import led model and that's because we're looking at some of these projects or some of these businesses on a contract by contract basis what we want to do is look at this more holistically around the growth of the opportunity and then fund the growth of the opportunity rather than fund that individual so we'll play through into individual support for business but we can't just do it in one business at a time we need to look at where there's gaps and where we can provide the capital for the supply chain which with the certainty then allows us to crowd in that global capital both from the UK and international but it is at the moment challenged by by the uncertainty and that market risk are you saying that the major issue for capital coming in to the to fund these projects is the planning system it's one of the elements what are the other ones the grid connections and having availability of grid connection but there are opportunities hydrogen maybe something that we could look at in that sense so not everything we want to electrify as much as we can for tomorrow's energy system but there may be wind farms that could be used to generate hydrogen it's then about what we use the hydrogen for but it can be used to decarbonise industrial clusters we could look to export it as well it may be I don't know be used in in heating our homes or in putt private transport but long distance transport may be a use as well but we can export it to other other countries also but the price of mechanism is going into hydrogen in a big way for private cars yes in part that's maybe down to individuals but the battery electric vehicles is what's progressing really quickly in the UK and I think that's what will come through it's not to say it can't be used as a say with with things like long distance trucks we see it in Aberdeen with with the buses in Aberdeen it's more efficient with the larger passenger numbers rather than the private cars. Scottish power said that. Sorry Mr Beattie we are quite pressed for time this morning. Do you wish to invite other members to address? Perhaps Ron Rohara could comment on that. Thank you so I picked up three questions there one is how do we access the capital that's available internationally? How do we address market failure and can government afford to borrow? If I turn to the first of those just to contextualise it, FDI intelligence report in March 2023 said that there's 54 billion pound or dollars pledged in 2022 to wind electric power in Scotland that's a huge amount of money but in my mind the truth of the matter is is that we are operating in a global competitive market and talent and money will flow to where the opportunity is most enabled and carries the lowest risk and so in answering your question what do we need to access that we need to create an enabled environment that is low risk and attractive and the money will naturally flow to the opportunity that's been created in Scotland and I think as has been mentioned there are a number of areas where there is opportunity for improvement and I would say the opportunity in Scotland remains solid today we have nobody indicating that any of the the the offshore energy opportunity in Scotland is not going to move forward quite the opposite people remain fully committed and if we contrast that to headlines in the last four to five weeks we've seen just last last week two orsted fields off the east coast of america cancelled we had the vattenfall announcement in Norfolk earlier this year cancelled so things are good but we need to ensure that the environment remains attractive for that capital to flow to us on the second point market failure I'll put a slightly different twist on blended finance I think it's about tapping into the power of collaboration and it's about that ability to bring in government subvention and private sector funding even higher net worth individuals and creating an environment that brings all of that to bear at the right time in the right place and I've been totally honest on the third point in government for tomorrow I honestly couldn't comment on that we've time to being fergus yes fergus yeah quickly on the on the capsule for for viable projects and I think from our experience and certainly you know the businesses we speak to day and day outs from the chamber's perspective a lot of that's on ice at the moment Colin and and what they're perhaps lacking is the a clear path ahead with stability and a stable you know whether it's a fiscal regime a regular regime from both governments it's some of the blockages that the mark spoken to around great capacity as well and we have slightly worryingly had a number of firms particularly operating in the energy sector looking at the north sea looking at such things as windfall taxes and energy profits levy and actually saying to us pretty frankly why would that investment that that that we had earmarked for for more development in the north sea and it's not on on the gas projects necessarily but it could be you know partly oil and gas and and potentially offshore wind and and other low carbon projects they're saying actually we'll utilise that elsewhere in the world because they're less of a a kind of a fiscal basket case than the UK right now and that they've been opting for places in West Africa over over the UK CS which is slightly troubling and I think you know where's that money coming from and yeah sure it's US it's your opinion institutional investment some of it is domestic some is from from the resources of of companies that have had a long and fruitful business history here over over decades but again we have to be careful that we're not scaring the horses there and the phasing that comes from both governments on on all of this whether it's on planning it can help to to drive that forward so say for example you know we need a lot of capital invested right now to support Scotland in our east coast ports and that's as good as a you know as a sure thing and we will need to to upgrade those and but ensuring that that government policy sits firmly behind that on the second point about the less profitable side of things sure and marks touched and blended finance role for scotch national investment bank there the role for for for the resources of the just transition fund for example and that can drive the scalability it can drive the innovation it can bring projects to viability so that there's there's perhaps longer term a return on investment that can be realised from from some of these things and you've seen actually with some of the the year one projects that benefited from the just transition fund let's say for for example the work that the net zero technology centre in Aberdeenau doing on hydrogen and that's all about bringing the innovation through a point where where you know there's there's a profitability and a and a business case there for for for Scottish exports of hydrogen and thirdly on on the point can the UK affords to borrow right now sure you know from from business perspective we want to see fiscal prudence from from our governments of course we do but I would I would kind of turn that on its head and see and we can't afford not to borrow rights now at a critical point in that condition during the journey and relatively speaking in international terms the UK can still borrow at a reasonable rate so you can go to markets and and I get you know decent rates for borrowing that investment now allowing Scotland and the UK to steal a march on you know it's confessed to us globally and when it comes to delivering a just transition decarbonising our energy sector is absolutely vital okay thank you Colin Smith to be followed by murder freser thanks community can I just continue on the issue of ensuring that our supply chain businesses in northeast are able to benefit from from the opportunity as we're starting with yourself mark and snub submission one of the the warnings you give is that the fact that the decreasing oil and gas production is going to mean a fall in the revenue for supply chains in the short term so how do we avoid losing those supply chain businesses during that period if you like so that we still have the skills the infrastructure the businesses themselves to take advantage of the opportunities that we're talking about in the longer term and we're not just offshore in the wind we're actually continuing to offshore the jobs I mean what do we do during that period when we are starting to see decommission of oil and gas but not quite seeing the scale of offshore wind developments yet that we anticipate in the future well we need to invest in these firms and these people we've recognised that through the creation of our just just transition finance principles and what that's setting out to do is to say that we will work with the businesses today because as you point out there's there's lots of revenue being generated from from the the oil and gas both here in the UK and Scotland and wider but we need to be investing today so that these businesses can retain and retrain the people they can bring in the apprentices and and use the knowledge that's been created will last at 40 years and they can invest in kit and equipment so that they're ready for when well decommission may be one of those opportunities a few days ago we heard it's a 20 billion pounds opportunity for the supply chain but also in being investing for the offshore wind both fixed which will come earlier and then the floating offshore wind the opportunities are there at the moment to make sure that you know that the business have enough work if we invest in those businesses as long as we recognise we're investing in them today and they'll be oil and gas focused so their revenue will be oil and gas but in time over this decade that that will shift to being renewable income but the challenge we've got is is a flight of capital so because everyone can show that they'll become these renewable energy companies as the decade goes on but when it comes to capital both debt and equity are withdrawn from from that market because today the fossil fuel dependent they're not recognising the wider opportunity and the risk that will come that these businesses or skills may not exist at that time and will end up here they're importing or having to spend huge amounts of more money to create those supply chain companies in the future and as I say that that's what these principles what what the essence of our principles is to try and role model that that it isn't dirty to be financing and supporting these companies as they make that transition and if we can show through the public capital commercial capital and through our impact framework that it can be done then I would hope to see the the banks and the private equity come back into these areas because their investors will recognise the value and the benefits from that. I mean to yourself or in that I mean is that an observation that you have as well I mean you work with businesses or companies work with businesses closely whether it's you know tidal developments or or in the longer term that offshore wind I mean are businesses preparing for that that period at the moment and what and do they have enough business if you like until we get to that point of some of the the leasing that you've obviously done actually starting to come. So I think I think in answering that if I may there there are a couple of component parts I would suggest that we're seeing the start of the cut over of the transition and I would evidence that by I think there are some phenomenal headlines that Scotland has generated so if you look at RC port the 300 million investment the new jobs there if you look at the XLCC cable manufacturing facility which is going to be involved in one of the most significant subsea cable infrastructure projects in the world creating 900 jobs it's starting the problem is is the disconnect ensuring that that keeps pace and that keeps growing and what I would say is is in the work and effort of Crown Estate Scotland there are and I must say working collaboratively again with industry and government first of all the supply chain development commitments that existed in the offshore wind leasing round made transparent player and captured the ambitions of the parties that were going to take forward the 20 projects that are in train and that is a key enabler to support this transition to help to help migrate from one type of activity to another type of activity a new activity. I also think through so work the work that's been undertaken in the strategic investment model which allows supply chain participants to come together and actively say how do we accelerate this how do we take activity that would typically occur in the year eight nine or ten of a development life cycle and how do we get critical mass into that and bring it forward and start to pump prime. I am all of those initiatives are talking to that concern but I think as you have indicated my mark with regards to the capital flight we're at a very sensitive moment in the transition journey. That's very helpful and one of the points you made mark but it's really a question for Ronan was around the whole consenting process as well that the observation that you made today and we've had in evidence before is real concerns that no matter how many leases Crown Estate may hand out if we don't get these things consented in a reasonable period of time then they won't come on stream or they'll come on stream far too late to support those supply chains. I mean from your observations Ronan what do you think needs to be done in order to make sure that that consent and process delivers at the pace that we needed to deliver? So for me almost linking that to my previous response this is about de-risking the scenario and focus on consenting everything that can be done done to advance and accelerate but also the great connections those those key enabling steps the skills the retraining the transitioning in the broader sense and there is an opportunity there for government to to assist. Just turn to yourself Fergus I mean renewables not a new thing there's been a criticism in the past that we've seen the growth in renewables what we haven't seen is a growth of the economic benefits that have flowed from that and too many of the supply chain jobs frankly have gone overseas such as the development of those turbines etc. How do we ensure that we don't make the mistakes of the past and that your members actually benefit? What do they need to make sure that they benefit from that growth in renewables and that transition? So there's a bit of policy making challenge here and there's a bit of stability challenge here as well Colin. The policy making challenge I think strides have been made towards that with the local content requirements of Scotland that would be a good example so that's to ensure that these supply chain opportunities are not lost overseas and I think that recognises that the pretty grave errors were made in the early years of some of the offshore wind progress and the future opportunities are going to be in wind they're going to be in hydrogen they're going to be in carbon capture but in the here and now we can't escape the reality the value and the jobs are in oil and gas for a considerable while to come the order books of the supply chains and the supply chain firms absolutely hinges and depends upon oil and gas projects and those supply chain companies the order books are not going to be maxed out with scot wind contracts for another decade so they need that predictability in the here and now and actually ensuring that they have the confidence in that intervening period so as not to shut up shop and you know to be frank go and operate elsewhere in the world where they don't face those those same challenges we are seeing the mood happening we are seeing the transition in action however and the chamber produces twice a year an energy transition survey and et 38 38th edition of that was published just last week and I'll make a point of following up with committee with the report on that afterwards which I think should provide some interesting evidence towards your deliberations and but just to kind of touch on some of the points there and you know and this is a this is a pretty widespread survey that represents operator supply chain companies big and small who have a who have a footprint in the northeast of Scotland so in October 2018 we saw only 14% of businesses and so 14% of firms business was in in activity outwith oil and gas and this latest addition which was out this last month shows that that's now up to 30% of firms businesses is outside of oil and gas and there is an ambition for most firms to get to 50 50 by 2030 but you know you know that is pretty there's a pretty punchy ambition I would say and there's you know there's there's a lot hinging on on on getting that pathway right and there's the potential setbacks to come you know will that see the vast majority of firms do most of their work outside all the gas by 2045 you know that's that's a big what if I would say and you know in terms of opportunity stability predictability and and ensuring that those order books are not you know empty and the rug pulled out from below the the supply chain companies you know oil and gas will play a huge part in that mix for for some time to come okay thank you Murdo Fraser to be followed by Brian Waddo thank you thank you community I've got some questions around the just transition fund so maybe I'll initially go to to mr Monroe from from the Scottish National Investment Bank and when the Scottish Government set up SNP I think there was a £2 billion fund that was proposed to be paid over a number of years and the just transition fund is 500 million just so I'm clear it's the 500 million additional to the 2 billion yes yeah okay thanks um the the the just transition fund handled by SNP is predominantly as I understand it in financial transactions and I'm interested to understand how limiting that is in terms of the support you're able to to offer to projects so for example some of the evidence we've heard Murray council told us that there would be less appetite for financial transactions through SNP the current scheme simply mirrors funding that was already available for such purposes it also limits public sector organisations involvement in the interventions as there are other sources of funding for such works but loans are not attractive compared to capital grants that reflect some of the evidence we heard we heard earlier so maybe you could tell us you know what what are the constraints around financial transaction funding and how does that impact the sort of projects you can support yeah so the 25 million pound is all financial transactions my understanding is there has been capital transactions already awarded last year and this year and we've been asked to invest that on a commercial basis using our impact framework when it comes to the local authorities we're engaged with the local authorities we can invest alongside the local authorities but we obviously can't provide funding directly to local authorities based on a mandate where to repeat a point I made earlier they say there's capital there's not a lot of capital there's this flight of capital I've been speaking about from from the businesses in the projects that will be part of the transition so whilst it is the bank will use its core capital from the two billion to fund these the additional funding is is helpful to to support that the transition that we're talking of so I feel it's needed in the basis that we've seen the flight of capital from the commercial from other commercial providers and specifically on my point about the constraints around financial transactions how does that limit what you're able to support yeah it's something that we have to look at I think there's something we we could sort of work with local authorities on if we're to have capital transactions but it's maybe something that we come back on once we've had a chance to to fully reflect okay the the just transition partnership have told us that they are concerned about lack of transparency around funding of projects and they have raised concern that there are no mechanisms for accountability to the representative bodies of the people of the area the local authorities do you accept that that's a valid criticism I think that the output from from the investment will will sort of stand stand to answer hopefully and and what I mean by that is is the impact that we can have through that capital and that that's the way I would measure it. Can I maybe ask Fergus much representing the Chamber of Commerce whether you're members of the Chamber of Commerce what's been their experience of the relationship with SNP and you know is there enough transparency around access to funding um so I think the experience with with engagement with SNP has as large has been very positive and there's usually an opportunity to to get in the room to make a pitch to to engage with their their investment team and to understand the opportunities available to them. I think because of the nature of the year by year year to year funding of the Just Transition Fund first year was a load of grants there was perhaps an expectation on the part of a lot of businesses in the northeast that there would be a kind of competitive grant framework that applied year on year and I think it's fair to say that a lot of people who had been disappointed following the the the allocation of the first year's funding could perhaps gear it up to do a submission in year two or year three and then realised actually there's been restrictions put on place in place with regard to this funding and it being administered through the Scottish National Investment Bank and I think that took quite a lot of people by surprise actually and perhaps could have been communicated better you know either through ourselves or or to the the business community in different ways. That said I do think there is strength to some of the thinking behind administering this finance through the Scottish National Investment Bank in that it could perhaps lead to I guess longer term strategic investment decision making rather than a series of many competitions throughout the lifetime of the of the of the fund but I you know we're a couple of years into this fund and there's there's certainly still questions being asked by ourselves and by a lot of members about exactly what the future holds for it to. Okay, thanks very much. Just just one more question if I can, convener, to to to Fargo's much. I don't know if you've seen that the breaking news this morning that it does look like the refinery oil refinery at Grangemouth is likely to close by spring 2025. This is a huge blow to Scotland's industrial base. It currently accounts for four percent of national GDP and eight percent of our manufacturing base and clearly that will have a knock on impact on the north east economy. Have you got any reflection? I appreciate the news is just broken but I don't know if you have any reflections on what impact that's going to have on the businesses of your members and on the wider debate around the just transition. I think this is probably a good example of a transition that's certainly not just you know this this is this is sudden and it's there and it's deeply concerning news. We'll have to take time for further reflection amongst our membership about what this means. What this means for Scotland's economy is the significant chunk of Scotland's economy as you say and it's part of the industrial backbone of our country. Perhaps it is not unsurprising that this is the direction of travel. I would have perhaps expected this to be slightly further on the horizon and I think there will have to be some serious thinking both around energy security, supply and demand and what this means for Scotland as an investment prospect when it comes to oil and gas and new emerging energy markets too. I think a concerning day certainly for the sector will certainly cause concern amongst our membership but I'm happy to to come back to the committee with further reflections once we've had the chance to take the temperature. Okay yeah thanks very much Camilla I'm sure there's an issue we can return. Yeah I was going to thank you for raising that that news has broken this morning and people will know that the committee did a inquiry into just transition for a gauge mouse this year that was the first part of this inquiry so the news that's broken this morning is something the committee will want to reflect on. Brian Whittle. Yes thank you good morning to the panel. I'm going to stay with you Fergus if I may. We heard this morning around the just transition and the impact it's having or not having on the SME sector. We heard the phrase carrot and stick. It was raised several times by by panellists. I was just you know I was musing a bit around the way that has already been said that much of the just transitions point is allocated to financial transactions and I wondered if there's a sense from your members if this way this money is being administered and in the form of finance is it available to your members to the SMEs and also throw into that startups and third sector because we did hear from them when we made a visit to Aberdeen just a couple of weeks ago Fergus. Yeah I would say just just for clarity most of our members are SMEs so this does reflect the Chamber's membership is the just transition fund readily available to them. I think the kind of experience to date when you look at the year one projects for example I think perhaps the government's approach there was going for kind of safe bet organisations that could then disperse the the funding thereafter such as opportunities in the north east James Hudson Institute, University and Transition Zone, ETZ for example, given funding to take forward. I don't know you might want to come to mark on I guess the interest that has come from SMEs versus your larger scale companies for kind of work on financial transactions certainly from our experience SMEs members haven't had any issues getting in the room with SNP to explore the opportunities so I think that's certainly positive. I think you know perhaps this is just the nature of the beast really is that startups third sector there will maybe be a requirement or a higher threshold to to demonstrate that they are geared up to utilise public funds for a purpose through the just transition fund so you heard from Jordan Jack from the campaign for north east rail for example they were essentially a campaign group run by a very sophisticated bunch of volunteers you know engineers and people with a real professional as well as extracurricular interest in reinstacing railways but at the same time they didn't exist as a corporation they couldn't handle the £250,000 that had been granted to them to deliver a feasibility study and so it fell to the Chamber of Commerce it fell to ourselves to become essentially the fiscal sponsor for that project which we're which we're delighted to do and it actually adds I guess the weight of the the northeast business community behind what is a very laudable project to reinstate rail to Purehead and Fraserborough but yeah perhaps there needs to be a mechanism built into the just transition fund which makes it more accessible for the likes of startups and to third sector organisations and campaign groups and who you know to to let's be let's be frank here who's who's aims and project which could do with the support may be as valuable longer term to delivering that just transition as you know an established business who has a who has a project beneath funding thank you I've come too much just open that up slightly more I mean one of the things we we heard was the it's not just the allocation of the funds is this this annual you know the way I have to to to apply for annually and spend in year you know seem to be prohibitive I don't know whether you had any thoughts on that as well as the my initial question I just on that we face that with both the core capital and the just transition fund investments don't work from April to March they can they can go over the period so it is a tension between drawn down the completing investments and drawn down and then moving into different financial years so I know the bank's been quite engaged and vocal in the past that that's something we'd want to to look at in terms of accessibility we I mentioned the four investments we made directly in Aberdeen and Aberdeenshire we also made one of our largest equity investments in Murray previously into Orbex which was 18 million pounds for space we made an investment into a lasma gin which is a a cancerous therapeutics business in Aberdeen so we're investing in other businesses and that's also a point I'd like to make that there's more than just the the energy supply chain in and around these areas and we're investing there so we've made investments previously we have a lot big pipeline that came before the just transition fund and we've had a bigger pipeline since then we're engaged with with fergus and the team we're engaged with OEUK the offshore energy trade body we're engaged with energy transition zone we're engaged with the through things like the press and journal I myself are going up to off offshore Europe for example we had a stand at to engage with with these businesses so to make it accessible I myself am presenting next week at a conference and we'll spend three days in a meeting with businesses in the geographic area that would meet the criteria for the fund thank you for that I appreciate that it's really helpful I think you know that one of the things to put push on is it's almost in investment the world of investment it's almost easier to get bigger sums of money and some of that you've mentioned some of the significant investment you've made in in your real core projects up there so I can ask about what are SNP doing to make sure that the you know the smaller companies the SMEs the startups the third sectors who will not be looking for that level of investment still have access to the just transition fund so the all of our investments on SMEs with the exception maybe the harbour with a building south harbour which is a project finance investment but still would meet the definition of an SME given the employees so all of them of of the eight there's 18 investments in the portfolio of 29 and 180 million so that that is where we are where we are positioned we do um seat is a bit different that that's not sort of currently within the commercial mandate of of the bank that more sort of falls to to Scottish enterprise and we are there when it comes to that sort of venture capital or growth capital for for businesses so we we look at tickets from one to 50 million pounds so they're the most likely gap below that one million pounds yes i have just a question that used to i've thought it was like a five million and up and then it's got genderpiles what kind of one to five is there's a crossover but we will invest between one to 50 million and then see can invest up to five million pounds okay so but just again trying to labour this point again you know some of the significant investment you already have made in the pipeline and you've said it's mostly within SMEs but the amount of money that you're investing is you know i would say significant in such in projects but how do the you know the smaller SMEs which would traditionally not be looking for that level of investment how do they access the just transition fund whether they can always approach us and we work and signpost to other investors might not be through just transition that there's something that that's interesting here historically SMEs trying to access between and i'm talking across scotland if i'm made and i'll make the point about just transition fund across scotland there's historically been a excuse me one second there's historically been a challenge in accessing sort of five to 50 million pounds of investment but we've seen encouraging progress in the last 12 months the banks established were making investments of one in two million pounds and i can refer to those separately but we've also had the British business bank in their investment fund for scotland which is 150 million pounds to be invested in SMEs in scotland the bank recently is a cornerstone investor in par equities growth capital fund which is 100 million pounds and we've also seen foresight raise 60 million pounds so there's now a lot of capital available to scotland's SMEs and i apologize if you think i'm labouring the challenge then when it comes to those that would fit the just transition is that they predominantly will have an oil and gas dependent revenue stream and thereby they still can't access because of that flight of capital that i've spoke of but we're available i can approach us directly through the website through the individuals our emails are on the website linkedin is another area so where they were engaged with the bodies as i said before so i'm not talking of two different things there's a lot of capital now for SMEs in scotland but when it comes to to those in the energy supply chain in other areas then there is that challenge okay i think i'll get rolling out if there's anything you want to add to that um it's not an area that talks directly to crowns date scotland's you know current activity but what i can say on a parallel um through the work that we do for sustainable community funds where we're trying to mobilise smaller amounts of capital investment um it is challenging um it takes a lot of work and it's about that connecting you know communicating and helping those individuals through the investment process um and in in thinking about today and preparing for today it did strike me that all public bodies including crowns date scotland we've got an opportunity to do more on that communicating connecting and sound posting because i think that that that part of our economy um is slightly different than maybe harder to reach um yeah very briefly uh convener a lot of the discussions today and in other sessions has been around about confidence um and mark has talked today about um flight of capital and obviously we have got to recognise that oil and gas still has a part to play in terms of the future in reaching that transition one of the things um which is disconcerting for folk is a lack of stability uh and i think uh mr much mentioned um you know decisions to move out of the north sea basin and into west africa where you know um someone would say that in the past there hasn't been very much stability um certainly not politically but um some of the the things that have happened of late which obviously are disconcerting for companies has an impact so let me let me give an example um because the absence of offshore wind in the recent contracts for different auction signals that the UK government has failed to recognise the current market and that's why we have not seen the bids we've not seen the capital can i ask the panellists if they think that the UK government in these issues needs to provide much more certainty to ensure that the investment the capital flows into these kind of projects and maybe we'll go to Mr Monroe first thank you so ar five was disappointing but that that was i think a sort of collective position from the industry to to send a message that has been heard wait if we had sat here last week before the ar six guidance i would have been probably more pessimistic but the the announcement last week around the higher prices on the cfd is very welcome we're engaged with projects where it's made an immediate difference uh in terms of the optimism i'd also go back to to that certainty and i agree around the stability we can bring some of these opportunities that's been referred to today through various questions from fergus as well forward if we can shorten the the planning system i think where we get we're starting to get it right on on the cfd and then if we can make the investments in our supply chain then we can be able to access that opportunity even quicker and provide the stability as as the oil and gas does deplete and the order books at fergus referred to uh then move over into to being order books on renewables i think we've heard a lot around about the length of time that planning and consenting takes here compared to other places i think what would be really useful for the committee and there's not really enough time today and i'm sure mr much in Aberdeen and grampian chamber of commerce can help us in this in particular is to get an idea from businesses where the real stumbling blocks the real barriers are here so that we can start to get to grips with those i don't know if you've got any very quick comments about planning and consenting mr munro maybe just making sure it's resourced appropriately so that it can deal with with the volume that comes from scotland and other opportunities okay i don't know if you've got any comments mr harrow just recent developments disappointing obviously but we should not lose hope this is a time for optimism we're in a transition it's difficult um there are plenty of positives out there i would suggest um if you look at intog and the recent developments there and the new work there if you look at the recent announcements with regards to carbon capture and storage there are other opportunities there but i ultimately do agree that um it's important to maintain confidence and with regards to consenting pace priority and appropriately resourced absolutely okay mr match did you focus that you want just just very quickly to respond to those points um i think on the contract contract for difference round that was a uk government failing if you make it a marginal market um well costs for projects are rising and that certainly doesn't help things i've mentioned the fiscal regime already now the chancellor i think will take to escalate in about 20 minutes time if he was to announce today that the the engine profits levy um was being removed or or significantly reformed i think the industry would be delighted i fear we won't get that and the day there's also a role for the scottish government in in there too around consenting um you know i think uh you know having having the words of presumption against oil and gas in the draft energy strategy has not helped with confidence and also there's a role there for the scottish government around scales there's a role there for the scottish government around ports and arbors infrastructure getting ready for for what comes next and then if i could just um uh uh kind of refer to the the energy transition survey that i mentioned earlier um i'll share the relevant points in this with the committee too um that did look at what the blockages where the barriers set um within transition so um profitability return investment is the top barrier to diversification in this in the energy sector but also up amongst those is the political and regulatory environment which is seen as worsening um so um perhaps a challenge for for um political decision makers uh from from the results there thank you convener i think we got the the survey from uh Aberdeen and Grampian chamber of commerce on monday i've not had time to read it all yet but i'm sure it'll make interest in reading for us all thank you thank you like a chartman do you wish a brief um just one final brief brief question if i may thanks thanks clear um yesterday that mark this is a question for you yesterday the UK climate change committee's report on adapting to climate change progress in scotland was published and what one of the sort of headline messages is and this is a direct quote overall progress on adapting to climate change in scotland remains slow particularly on delivery and implementation given snib's mission around achieving address transition and net zero um where where are we falling down what what's missing and how in your view and i appreciate this is a huge question for you know a 20-second response what are the things that snib could be doing differently or that you need us to be doing differently here in parliament i think that the challenges attracting capital so the business models make it difficult because it's going to take billions and billions of pounds for for that adaption what we are doing is making investments for this investment fund we've made but we're also aware of the benefits of natural capital which again came through the the climate change both both that forestation peatland restoration and that's something that we have in our pipeline we're looking to make more investments within so as to to crowd in that private capital okay thank you thank you if i just ask mark a final question around when we can expect the scotland national investment bank to finalise the next tranche of allocations from the just transition fund if there's a timescale is that available or i so it's we'll make the investments of 25 million pounds this year and i'm unsure as to what will be the intention for next year but that's something we can come back on okay thank you and an issue that came up in the other i did mention i've had a strange mouth just for just an inquiry was conditionality of funding and whether that's something that should be considered what's around fair work principles or you know if you're looking at a transition it's meant to be just should there be and at the moment i don't think that there is and i know there's going to counter views of it whether it'd be helpful or not but i don't know mark if you want to say something about the way in which funds are distributed and how decisions are made and happy to so we apply the bank's impact framework that does require to sign up to the fair work principles it requires carbon management plans it requires plans on the equality diversity and inclusion and these are standard conditions across all of our investments not just the just transition fund and fergus i don't know if you want to say anything about the issue of conditionality if that was to be attached to any funds whether that's around fair work principles or other kind of employment practices could i have fergus is michael please sorry it wasn't your fault fergus but if you're live now it's fine great thanks yeah i think broadly speaking there'll be you know a real openness to that most of our members will will you know be fair work employers that the pages of wages and you know that that's ultimately a policy decision for governments to make but you know we're here to to be the go between between our members and government to to arrive at accurate policy okay thank you that brings us to the end of the evidence session this morning and thank you for the witnesses for their contributions i'll now close the formal part of the meeting and move into private session