 Good morning, everyone. Thank you for coming today. This is the third meeting in this session of the Economy, Jobs and Fair Work Committee. May I welcome everyone and, in particular, the Minister for Employability and Training, Jamie Hepburn, Gavin Gray, Deputy Director for Promoting Fair Work and Isma Khan, Senior Economist, Head of Policy and Strategy Unit. Before we move into the session, there is one item to deal with, and that is the committee content that item 1 should be taken in private. Is the committee in agreement with that? We will now move to consideration of the Scottish Government's labour market strategy, and I invite the minister to make an opening statement before we move into questions from the members of the committee. Thank you very much, convener. I begin by saying that it is a pleasure to be before the committee, my first appearance, since being appointed the Minister for Employability and Training. I am very delighted to be able to speak to the labour market strategy, which, of course, the Scottish Government published on 26 August, meeting our manifest commitment to bring this forward in the first 100 days of the administration. Broadly speaking, the overarching purpose of the strategy could be broken down into trying to promote the fair work agenda that we have already seen taking forward through the fair work convention to better involve employers and the employees in the workplace and improve living standards, and to make sure that the labour market is providing a workforce that is meeting our social and economic needs and recognising and being responsive to employer needs and, of course, to improve Scotland's productivity performance. The strategy shows that our economy has many strengths. The recent labour market statistics that were published showed employment up and unemployment down. Of course, a critical part of the labour market strategy is to sustain that performance. It also recognises some of the challenges that we face, not least around how we respond to the outcome of the EU referendum. Responding to those challenges, we want Scotland to be a more successful and fairer country with a strong economy, a vibrant, fair and inclusive labour market. Our focus is on creating more jobs, better quality jobs and jobs that work for everyone in terms of skills, pay, security and prospects, because we know that those who are employed feel secure, valued and empowered, drive innovation and growth. The predecessor committee to this committee informed our thinking in developing the strategy. We have reflected on the report recommendations of taking the high-road work wages and wellbeing in the Scottish labour market report and the removing barriers, race, ethnicity and employment report. The labour market is constantly changing. That is why I believe that the creation of a strategic labour market group is set out and the strategy is essential to advise the Government as new challenges emerge over time. Of course, I will also very much welcome the committee's input into that process as well. I look forward to our discussion today and in subsequent times going forward as well. I will start by asking about one or two things. The first of those follow in on one of the things that you mentioned. There are quite a number of objectives that are set out in the Government paper on the labour market strategy. First of all, we will talk about quality of employment, so you refer to our contracts there and hollowing out of the labour market, which is referred to as the reduction in middle-income jobs and I think the disparity, the growing disparity that is observed between high and low incomes. Further on in the paper, I think it is page 24, paragraph 3, assessing our future needs. There is a section on societal change and a desire is expressed for improved work-life balance and changing work environments. There is a reference to flexible working arrangements and an indication that 57 per cent of employees say that flexible working is important to them. I just want to ask a few questions relative to the point about quality of work and work-life balance, because pay is part of the Government's strategy and the type of contract that employees are employed on, which may include zero-hours contracts, but there is a lot more to quality of work, employment and life. I take it that you would agree with that. I suppose that the point that we are making where we refer to the issue of societal change speaks to our ambition to not only see fair work for its own sake, but also because we recognise, as the report alludes to the OECD, that there is growing inequality, which speaks to the point that you made about the hauling out of the middle range of pay for employment. That can drive down growth and lower productivity. The whole agenda of trying to respond to the greater desire for employees to feel valued in the workplace to be well remunerated, which, of course, is understandable from the employee perspective, has significant benefits for our wider economy as well. That is why we want to see that as a co-part of this labour market strategy. As you referred to remuneration, that is monetary. Of course, I am wanting to ask about other things. Are there other factors that are important to employers? Are there not, such as holiday arrangements, whether they are on a part-time, full-time contract, permanent or non-permanent contract? Do those things agree that they are also important to employees in terms of the quality of work? Yes, absolutely. I agree with all of that. I think that one of the things that we have seen and again that is alluded to in the labour market strategy, since the time of the economic downturn around 2008, there has been a change to our labour market and there has been an increased reliance on flexible working arrangements that might not be felt to benefit the employee that you have alluded to in terms of zero-hour contracts. We do know that the Scottish economy is less reliant on those than other parts of the UK economy, but it is certainly ensuring that people know that they have got sustained employment, well-rewarded employment and a workplace where their views are respected and listened to. Obviously, it ensures that it is a rewarding experience for them, but I think that it can help foster a culture of innovation in the workplace where people are listened to and can drive up productivity as well. The statistics speak for themselves. We know that more equal societies than our own are far more productive societies as well. I was going to come on to that. What studies have been carried out to examine the rules about pay levels but all those other factors such as statutorily required holiday arrangements for workers in a country that you might identify as being one where a society is, I think that your words are more equal? What studies have been carried out to look at the whole setup rather than just the specifics of what might be referred to as material, a material issue, the pay level, which of course is important, but also those other factors that affect the quality of life of a worker, whether it is not someone who is working his time off to spend with their family or measures that might not appear on the surface but are disproportionately disadvantageous to women because of the type of work patterns that women may find themselves in? I think that in answer to your first point, the most obvious study that we have referred to is the work by the OECD that I have referred to already that would demonstrate. In fact, they estimate that rising income inequality has reduced GDP per capita growth by nine percentage points between 1990 and 2010. That makes the point that I was alluding to that where we see increased levels of inequality not only is that bad for the individuals who are at the sharp end of that but it is bad for our overall economic growth. We have seen other players such as the IMF and I think that the World Bank has had similar studies as well. We can provide further detail to the committee about some of those studies but those have certainly informed our thinking in terms of the labour market strategy. Those are studies on the scenarios that play out in different countries but if we are going to address the issues that you raise, surely we need to look at the specific situation. If we have a country that says that the working situation for workers is what we might wish to aspire to, surely we need to look at the whole setup in that country with regard to the specifics, the laws and so forth and say, is there something that we can learn from rather than simply looking at studies about the overall effect or the statistics on the different situations? Certainly, we are always keen to learn from other examples. I would not think that what I have just said in response to the initial question, what you have proffered as a way forwarder, are mutually incompatible. I would absolutely recognise the need to learn from other countries and other jurisdictions here in the United Kingdom on these islands but further afield as well. I suppose that it speaks to some of the quality of the data that we collect. I know that that was an issue that has been raised with me by both the Scottish Trade Union Congress and the Scottish Chambers of Commerce. They expressed some concern about the quality of data that we collect around the labour market strategy. That could be informed by the type of data that they gather in other countries that I think you are alluding to. One of the clear commitments that we have set out in this strategy is to try and improve the type of information that we are gathering going forward. I am thankful to you for that indication, minister. I will now open up to questions from committee members. I will start off with the Deputy convener, John Mason. There is mention in the paper of the pay ratio, which I take it means the ratio between top and bottom or top and average are around that area. The living wage is a way of nudging people up at the bottom. What can the Scottish Government and the Scottish Parliament do about the gap between the people at the top and the people at the bottom? Clearly, we cannot take a strict legislative formula forward. We are not empowered to do that, as I am sure that the committee members are well aware of. I would not underestimate, incidentally, Mr Mason, the significant impact that the work that we have undertaken in promoting the living wage has had. We know that Scotland is the country with the highest proportion of any of the UK countries with people paid at least—the minimum wage sum is 80 per cent—of individuals who are paid at least the living wage, I should say. That will have made a difference, but clearly that will only take people so far. It goes back to the convener's opening question around the whole issue of the hollowing out of the pay structure, which is not unique to Scotland that has happened to many other advanced economies in the world. We need to look ahead and look at the type of industry and the type of jobs that we want to secure here. To offer one example, although it is not posited specifically within the labour market strategy, we know that there is a lot of potential and a lot of growth potential that would lead to well-paid employment. In the life sciences sector, for example, we need to ensure that we have an economic strategy, which, of course, this labour market strategy sits alongside to try to ensure that that is the type of jobs of the future that we have here in Scotland. We also have a labour market that stands ready to respond to that type of emerging industry, so that we can see people better remunerated and start to do rather better in that pay ratio that you have referred to. Do you think that it damages industrial relations within our organisation if the person at the top takes a 10 per cent increase and then says to the ordinary workers that they can only have 1 per cent? Obviously, that is a hypothetical circumstance in the way that you have set it out. Mr Mason is doubtless that there are probably literal examples of that. I would be loath to say definitively, but I would imagine that if you are in the receiving end of a lower pay rise than other folk in the workplace, you might take a particular view of that. I am just touching on a few issues just now and others will follow up on them. Obviously, Brexit is on everybody's thoughts at the moment. I wonder if the Government's feeling is that it appears that quite a lot of workers' rights and protection have come through the European Union and are some of those rights and protections at risk if we are not going to be in the European Union any more? Well, certainly that has driven much of our concern about Scotland's position in the EU. We know that businesses in Scotland, the business community, have expressed a number of concerns around the likely impact on them as employers in terms of their ability to access European markets more readily and ensure that they can have the supply of skills that they need to keep their businesses going. That is part of it. Yes, absolutely, what has driven some of our concern is the social protections that EU membership underwrite and the potential for future or indeed current administrations with their hands on those levels to take a different approach. Yes, that has driven our concern about the EU referendum outcome. Of course, the Parliament has passed a motion to support the Scottish Government to explore every avenue to try and ensure that Scotland can continue to benefit by the provision set out by EU membership. That is something that the First Minister and the Government are pursuing right now. On disabled workers getting jobs, it has long been the case that they have struggled to compete in the labour market. In days gone by, there were compulsory targets, but there were targets set for the number of percentage, which was at 3 per cent at one point, of staff that should be disabled. How does the Government see going forward to support disabled workers more? That is a challenge, and it is very much related to my specific portfolio area. We know, for example, in terms of the modern apprenticeships opportunities that we provide as significant under representation of a variety of groups, those with identified disability amongst them. To take that as a specific example, what we have asked Skills Development Scotland to do is to take forward an equality action plan to drive a better spread of those who are involved in modern apprenticeships. Similarly, as we seek to take forward this strategy, one of the things—I referred earlier to the type of information that we gather now—I do not want to pre-empt and no one has asked me about the strategic group yet. Doubtless, convener, that might be an area of questioning that people come on to, but one of the tasks that I think it will have is to consider the type of information that we think is necessary to gather. That could be an important area to determine what kind of positive impact the strategy is having in ensuring that those with an identified disability are getting the chance to get into employment. Of course, we are getting new devolved responsibilities over the employment programme, which relates to supporting those with a disability to get into the world of work. That work continues, and I am obviously tasked with taking forward that work. I will be looking to make some information available to Parliament as soon as possible in terms of where we are taking those powers forward. You mentioned modern apprenticeships, and that affects quite a lot of areas of women who are still going into traditional areas, men going into traditional areas, and disabled people as well. Who is responsible for changing that? Is it the employers who are not taking on giving more opportunity to disabled people and women, or is it SDS, as I think you suggested, that they are going to be taking that forward? I think that it is collectively our collective responsibility to make sure that those who are underrepresented can be better involved. The onus should be placed firmly and squarely on the rest of us to reach out and make sure that we are doing what we can through the various employability and training programmes that we offer, more than apprenticeships being one of them, to try and—I do not like to use the term, but I cannot think of a better term at this stage, convener—those who are hardest to reach, placing the onus on our responsibility to reach out to them. I do not think that any person has any single agency's responsibility. I think that it is something that the Government has to be involved in. I think that it is something that employers have to be involved in. It is something that Skills Development Scotland has to be involved in, and it is something that our other enterprise agencies, colleges and universities have to be a collective effort in that regard. Just a few questions, if you would, Mr Hepburn. First of all, you have called at various points throughout the paper, or you have set out that you are not terribly happy because you do not have a full set of powers around employment law. I am just wondering specifically what powers do you need in regard to employment law, given that the law is the law? What are you seeking to do? To give you one very specific example, Mr Kerr, I think that if we had the full gamut of responsibility over employment law as the Scottish Trade Union Congress has called for, we would not be taking anything forward as facile and ridiculous as the UK Government's Trade Union Bill. There is one example for you. You are asking for rights over employment law regarding trade unions. Anything else, given that most of it is driven by Europe, and it forms part of the legislation anyway? Indeed, it is driven by Europe. I do not know if you might have noticed, Mr Kerr, that there was an EU referendum on the 23rd of June that had an outcome that I did not particularly welcome, but might drive a different set of assumptions, as opposed to the point that I made to Mr Mason earlier about who's hands I would rather these powers and responsibilities were in, and with the greatest respect I would rather they were in the hands of this Scottish Parliament than in the hands of the current UK Government. But they are in the hands of the UK Government because they form part of the law of our line. Sorry, I missed the last point, Mr Kerr. Well, they form part of our law, so simply whatever Brexit looks like does not automatically change our employment law. I am aware that it does not automatically change it, but I suppose that having given the example of the Trade Union Bill, it shows that the law can be subject to change, and I do not think that that is a particularly beneficial change. You may take a different perspective, that is your reparogative. You call just sticking with employment law for the abolition of tribunal fees. Are you able to point me to anything that shows what modelling you've done as to the impact of the abolition of tribunal fees and why that might be desirable as an outcome? Well, I think self-evidently and I think almost logically there has been a negative impact through the introduction of those tribunal fees and acting as a disincentive for those who may feel they have been subject to rough justice to take forward an appeal to a tribunal by the introduction of that fee. Certainly that speaks to my own experience as a constituency representative. I am aware of constituents who have approached me to express such a concern. I am aware of those information advice organisations, my constituency. We have a very active unemployed workers centre, for example, that I have expressed such a concern, which tells me that there are many people who previously might have come forward to seek redress by tribunal. That is not to say that it might have been found in their favour, but at least they had the chance to go forward to that tribunal, who now no longer feel able to do so by the introduction of fees. Can you point me to any study that shows the impact of abolishing tribunal fees in Scotland? What that would do in terms of the economic impact? Any studies that show that the introduction of fees has not had the desired outcome? The desired outcome was, Mr Kerr. The UK Government's desired outcome was and I have just alluded to it. You alluded to it, but I am looking for a study and some hard evidence. Up till now, the courts have taken a different view from me. I need that evidence presented to me. I am not leading on this particular policy area, I should say. Mr Kerr, I am happy to provide the committee with as much evidence as we have gathered on this particular matter. I can certainly get back to the committee on that basis, but I would have thought that it would be a rather self-evident point. Personally, that is what motivated the UK Government to take for that particular policy initiative by way of introducing fees, which was to act as a disincentive to people to seek redress. Otherwise, why did they do it? With respect, that is rather for you to answer. It is for you to get the evidence. I think that it is for the UK Government to answer and speak for the UK Government to introduce it on me. People seek redress does not always mean that they are entitled to it, so it is a bit broader than that. However, I am not sure if you have offered to come back to the committee on that point. I will do that with respect. I did make the point that at least the loud people to seek redress did not presuppose the outcome of anyone going to the tribunal. Indeed. I think that it might be more helpful if you are allowed to come back on that particular point. Thank you for offering to do that. Was there any further? Just one more question, if you would convene out. Has there been any… Obviously, the report talks about modern apprenticeships and various efforts that are being made to generate labour, to incentivise the labour market. Can you point to any scenario planning that has been done for what the labour market might look like in five years such that what you are trying to achieve through this is meeting a need that might arise in five years, or is there no such study? There is a labour market strategy, which is why we have brought it forward. What I would say, Mr Kerr, is that it has to be kept under review. One of the key elements of the strategy is the establishment of a strategic group that will involve employers across the private, public and third sectors. It will involve trade unions and academia, which will be specifically for the purpose of informing ministers as to whether or not the strategy continues to be relevant. We want it to be responsive to the circumstances that arise. To give a very practical example, we are right now dealing with the outcome of an EU referendum. We do not know precisely what that outcome will mean for us here in Scotland. It is a very practical example of an event that has arisen that could have an impact on the labour market, which might require us to look afresh at some parts of this strategy. I think that what you are looking for is something that we are trying to embed as part of this strategy. The scenario planning has not been done then? That is what I am saying. There is a strategy here that has set out our ambitions. We want to take those ambitions forward on the basis of having established a group that involves all the key sectors with a range of expertise in this area that can, I think, essentially gather the type of evidence and information that you are looking for. I was reading through the labour market strategy. I was very pleased to see the inclusion of the women's returners project, because that is something that I have had personal experience of myself—the difficulty of re-entering the workforce after a career break to look after children. I was wondering if you could tell us a bit more about that project. For instance, who would be eligible for it? Is there a budget attached to that? How would you measure success? With a strategy as a whole, there will be quite a lot of engagement needed with employers and businesses. How long do you think it will take to engage with them in order to further those interests that are in the strategy? Taking the second part first, Ms Denham, I would certainly concur. I think that it is ripped through the strategy that there needs to be that process of engagement with the business sector. Indeed, as we sought to draw together the strategy, there was a degree of early engagement with a variety of bodies. We can provide some more detail about that, if the committee is interested. However, having made the point to Mr Kerr, the strategic group will include representatives from employers and from the private sector. There will be a critical part of the work that is going forward. This is not a process that I intend to close doors on. Just last week, I felt productive from my perspective with a conversation with the Scottish Chambers of Commerce about the strategy. I spoke to the STUC about it as well. I will be happy to speak with them again. I will be looking to speak with the Federation of Small Businesses. I will be happy to engage with the CBI. I will be happy to engage with individual employers as well. I am very happy to take forward an on-going basis. If people want to speak to me about the strategy, including any member of the committee, the committee collectively or individually, I am happy to do that. That goes for employers as well. Turning to the first issue that you have raised, I would recognise the importance of the Women Returners project. We are all aware—perhaps better now than we have been in the past—of the assumption that caring responsibilities primarily fall upon women and can have on their ability to progress in the workplace. That is why the initiative will be important. There will be a budget attached to it. It will be a pilot study to see how we can better engage women who have been out of the work environment to get back into the workplace. I do not think that I can say much more about it just now, convener, because there is still some work under way. However, once we have finalised the committee, we are likely to be happy to provide more detail. Gordon MacDonald I do not want to ask about the potential impact of Brexit that will have on the Scottish economy and the labour market strategy. The Chartered Institute of Personnel and Development had a report out in August that said, in some parts of Scotland, almost a quarter of jobs in specific sectors are currently filled by EU workers. Is there any restriction of movement as a result of the Brexit negotiations? What impact will that have on this labour market strategy and the Scottish economy in general? I have already alluded to the concerns that we have about the impact of the EU referendum. We do not just relate to the social protections, but to reflect the concerns that have been expressed by the business community, reflecting the point that you made, Mr MacDonald, about the ability to access the single market but to ensure a steady supply of skills to support their business endeavour. I think that the First Minister was very clear right off the bat in terms of the day after the EU referendum, making it very clear to those EU migrants who have come to Scotland. They are welcome here. We respect and value the contribution that they make to not just their economy but our society overall. Of course, the lack of clarity on how the UK Government seeks to take forward the outcome of the EU referendum still continues, but we are very clear as an administration that the Scottish Government has to have a role in that process. Its voice has to be heard and we will be taking forward the mandate that this Parliament provided the Government and the Administration to seek every avenue by which our country can continue to benefit by continued EU membership. I notice a review of the enterprise and skills review. We are in a situation where, even by upskilling many of the potential vacancies that could be created, if there is a lack of confidence within EU nationals, whether they can or cannot stay within Scotland in the wider UK, if they decide to move, if we upskill a lot of our workforce, will that manage to fill the gaps if we suddenly lose the EU nationals? I am very cautious about talking about losing EU nationals. I do not think that that is an outcome that any of us want to see. What I would certainly say is that there is still a huge opportunity for us to provide a range of opportunities to upskill and provide training opportunities to those who reside here, be they those who were born here or those who have come from elsewhere. That is very much on my agenda as the Minister for Employability and Training. Finally, you touched upon the need for good data in order to measure whether the labour market strategy will deliver what you hope it will deliver. Can you expand on what you hope to do in that area? What I would say is that there has been some work already in relation to that. If you look at the national performance framework, there have been three labour market indicators that have been added. They are focusing on reducing under-employment, reducing the proportion of employees and lessing the living wage, which we are doing quite well in relation to, as I mentioned earlier, and reducing the gender pay gap. There is already a recognition that those are some of the areas that we need to be more responsive at looking at how we are progressing in relation to that. Beyond that, I think that I am open to—I think that there will be a key role for the strategic group. The two key roles that I see for that group are ensuring that the strategy stays on track, responding to events that may arise that we may or may not have foreseen on the horizon, and, secondly, looking at the whole issue of the type of information and data that we gather. Beyond that, I think that it is important for the group to have the space to determine other parts of its role. I am not going to try to presuppose what that might look like. I think that I have heard the point made by a range of folk. I mentioned earlier that it is not just the business community that have that concern. The Scottish Trade Union Congress has similarly expressed concern about some of the information that we gather. I think that the best thing to do is to try to get together those with the relevant expertise to sit in this group and for them to determine what type of information it might need to be that we need to collect. Gillian Martin You mentioned the Fair Work Convention. I really want to ask a very broad question about how you are going to aim to preserve the role of the Fair Work Convention in this strategy. We have already mentioned the gender pay gap, and we have mentioned that we will return to work, but it is persisting. What can we do to measure improvements in the gender pay gap? Identify where the gender pay gap is most prevalent, and is it going to be more on companies to be releasing that data? Or could we have an accreditation scheme in place? An encouragement for companies to do better in that regard. What is the strategy on that? Gillian Martin In relation to the gender pay gap, it is persisting, but we already know that there has been improvement here in Scotland. However, it is not going far enough. Clearly, as part of this strategy, we want to do it rather better. How that might be achieved could be through a variety of means of going back to the point that we made about the type of jobs of the future that we want to secure, ensuring that women feel that they have a part to play in that. If you take one of the obvious examples, we know that there is great potential through industries that align the STEM skills, and part of the challenge that we have there is that not enough girls and women perceive that that is an opportunity that is open to them. There has been some good work undertaken, for example, by the University of Strathclyde, to try to open up the possibility for young women in particular to say that they can actually have a career in this sector. In terms of accreditation schemes, we are always willing to consider any suggestion that has been made in good faith, and that is something that we can certainly look at. However, I think that the relevant point is to continue to monitor progression. Again, that might go back to the answer that I just gave to Mr MacDonald. That might be one of the critical areas for the type of information and data that we seek to improve that we are gathering just now. In terms of the role of the fair work convention, I think that the most obvious way that we are demonstrating our continued commitment to the convention framework that is produced through this labour market strategy is that we have said that we will be providing £0.5 million for the fair work convention to continue its work this year, so that is not an insubstantial commitment to that particular line of work. However, that is not an attempt to supplant or replace the fair work convention. However, the fair work convention has been instrumental in forming our labour market strategy, and I think that the two will have to work together and co-exist and complement one another as they go forward together. The second question is really interested in the transition between people who have unemployed and getting them into employment. That is one of the toughest bridges that people have to get through and the support that has been given to people trying to get into employment. I would like to ask me what has been done there in terms of the strategies to help. I know that there is a lot of work around getting young people into employment, but is that beyond young people or including young people? One of the things that I have spent my summer before we started was that Ms Bailey asked me if I would have had a nice summer. I have had a very nice summer. I have been spending it going round seeing some of the excellent work that has been done by a range of organisations to work in this area of working with those who might have found themselves not in employment, education or training for a variety of reasons to get them to the stage of being ready to move on to that as a destination. One of the things that we are getting through the Smith commission process is new powers over employment programmes. I should caveat that with a significant reduction in available funding from the UK Government, an 87 per cent reduction in funding. There has obviously been a decision taken by the cabinet to ensure that there is additional funding from existing resources that are leveraged into the programme. However, one of the commitments that is set out in the strategies to ensure that we are taking the opportunity of having new powers to better align them with what we are doing across the board in relation to offering the chance for people to get the type of employment skills and training opportunities that will allow them to be ready to get into employment. As I have said, there is obviously work under way in the bill. I will be looking to provide that information to the Parliament as soon as possible, convening in relation to how we will be taking for the employment programme. Minister, I might just pick up on one of the issues raised there. There has been reference to gender pay gap and also women's place in the employment field. Would you also accept that there is a gender imbalance in favour of women in some areas? For example, if you think of the universities, I think that the Scottish Funding Council has tried to ask the universities to address this, where there are more women in education than men now in our universities. You may not be old enough to remember, but I remember that in my branch, in the legal profession, of course, when I studied law, the drive was to get more women into studying law because there was not a balance. Now, of course, it is the case in Scotland that there are fewer men studying law. That is the first part of it. There are some areas where the opposite is now the case. In addition to that, there is the follow-up question, which is if professions that people enter coming from that sort of academic background are relatively lower paid now than they were, say, 20, 30 years ago, the difficulty is that that will not necessarily address the gender pay gap, if you follow what I am saying. Have you looked at that issue? I do follow what you are saying, Cymru. I think that it is interesting and you posit it as the areas that are in the favour of women. You are correct to make the point that more young women go to university now than young men do, but, for all that, we still know that the gender pay gap persists, despite the fact that it is demonstrably the case that more women are acquiring skills to a higher education standard to a degree level standard. There is still something acting as a barrier to tackling that remaining persistent gender pay gap. I suspect that it alludes to the point that Ms Denham made about the experience of women after they have acquired those skills. I think that there is still some work to do in that regard, but the wider point is that it would be correct to say that we are trying to do more to encourage, as I have just set out to Ms Martin, to encourage females to take up careers in sectors that are traditionally viewed as the preserve of men. I gave the example of STEM, but equally we are trying to do the same in relation to sectors that have traditionally been viewed as the preserve of women. I made the point at the outset that this labour market strategy has to be responsive to our social and economic needs. One of the social needs that we are going to have to respond to as a society going forward is the fact that we have an ageing population that is going to lead to increased requirements for social care. Right now, that is heavily a sector that is dominated by women working in it, and we need to do more to encourage diversity in that workforce as well. We are looking at it from both angles, encouraging women into sectors that are traditionally viewed as the preserve of men and vice-versa. I think that going back to my initial questions opening the session, the concern that I have and many may also share is that measures may be taken to address one issue, but the difficulty is ultimately, as you say, with regard to, for example, the gender pay gap. It does not follow through with results long term, and that is why my questions about what have we done in terms of detailed, in-depth study, and in particular in relation to countries where we might see the situation as having developed more positively even than it has here. How can we learn from that rather than what sometimes comes across that there are well-intentioned measures that result in an effect but are not tied up to the other good effects or consequences that people would like to see in those areas? I guess that is why I spoke of the need for this strategy to be responsive and to be able to see where trends are emerging, where events arise that we need to respond to, but also whether effects that we take that, on a well-intentioned basis, are having the desired effect. If not, why not? If not, does that require a change in tax? The last thing that we want to do as part of this labour market strategy or anything in the economic sphere will be to take measures that are not effective. You are open to suggestions and constructive ideas, as well as intending to follow up to see what the effect of that is. Always, convener. Thank you, convener, and minister for joining us this morning. In your opening remarks, you mentioned that improving productivity was one of the key objectives behind the labour market strategy. Page 14 of the paper highlights that Scotland continues to lag behind some of our main competitors in terms of productivity performance, competitors such as Ireland. Two things. Does that mean that the Scottish Government's target to rank in the OECD top quartile by 2017 is not going to be met? Secondly, what specific steps are planned by the Government to narrow our productivity gap going forward? The first point to make is that, relative to the UK position, our productivity levels have done rather better, but there still is a persistent problem with how we are doing by comparison to other countries. There is a determination to do it rather better. This labour market strategy is a critical part of that. Having made the point that there is a body of evidence that would suggest that more unequal societies lead to lower levels of productivity, a good start in place for us would be to try and do rather better in levelling out some of those inequalities. There is a determination to do that through a range of the measures that are set out, be it promoting the living wage, be it trying to ensure that the jobs that we have here in the future are those that are better paid than some of the ones that we have here just now, which would offer us a real chance for us to be ahead of the curve by comparison to some of those other countries. I gave the example of the life sciences sector. We know that there is an opportunity in the renewables sector in that regard as well. Of course, the other thing that I cannot remember which member it was of the committee was that it picked up on the Enterprise Agency's review convener. Again, that is a critical part of the work that we are undertaking in trying to ensure that we will be doing rather better in that league table in the future. Thank you very much. Will the Government be publishing a revised projectivity target now that the 2017 target has not been met? That is something that we can reflect on. The point of this labour market strategy is to reinforce our determination to do better. It demonstrates our ability to be responsive and cognisant of the need to do better and reflect our determination to do so. The labour market strategy states that the Scottish Government wants to foster a culture of innovation that can create jobs, can encourage skills and increase productivity. How do you envisage that happening? What support will you give and what can you do to encourage all staff to be involved in innovation, rather than senior staff and managers? I think that that is why we want to try to get all sectoral interests around the table to reinforce that. The last point that you made, Mr Paterson, is absolutely critical. There will be many employers that are very good at this in terms of being responsive and listening to those working on the shop floor for want of a better term to hear what they have to say that could lead to measures that boost productivity by changing the manner in which they work in their particular working environment. There might be some others that are not quite as responsive for whatever reason, so I guess that it is about trying to ensure that where there is good practice and we know that good practice will exist out there can be shared and spread to other sectors. Incidentally, some of them will be not just within the private sector, but can always be looking to do things better in terms of the public sector as well. I am sure that the third sector would feel the same, so it is about trying to get everyone in the room—sometimes a metaphorical room—together to ensure that they can learn from one another and where things are working quite well that others can learn from it. Does that include—I know that some high-wage economies just happen to have women on boards and have folk from the shop floor involved in making decisions, and some folks from the trade union, so they are involved in all those big decisions, even in small companies? Is that something that you are seeking to try and achieve? I suppose that we will go back to the point that I made to Mr Mason. We do not have the legislative competence to demand such an approach, but we are such an approach that could be demonstrated to be effective. I think that it is one that we should do rather well to explore further and see whether it can be rolled out. I am, of course, open to us looking at any evidence to suggest such an approach can be an effective one. Thanks for that. Although Scotland has a very fine export record, there is still a lot that we could do. Since small businesses have made by far the largest number of people that are employed in Scotland, I am just wondering whether the strategy includes working in that regard to encourage small businesses that are not confident in themselves about trying to find themselves in the export market and that they do not have the skills. I am wondering if the strategy would bring about the innovation that would encourage that to happen. One of the priority areas within the strategy is to promote Scotland internationally, not only promote it internationally as a destination for people to invest in but to promote Scottish businesses to engage with the rest of the world. I think that you are absolutely right to reflect on the fact, Mr Paterson, that the substantial majority of enterprise in Scotland is within the small and medium enterprise area, and if they were not involved in that process, we would certainly be missing a trick, so we would be very happy to do what we can in that regard. Obviously, part of the work that is there is through organisations such as SDI—there is, of course, the enterprise agency's review that is on-going just now, so that would be in the mix there as well. I want to ask you a question about the link between the labour market strategy and fiscal policy. You cite on a number of occasions in the strategy the work of Naomi Eisenstadt, the First Minister's independent adviser on poverty inequality, and agree with her that income inequality damages economic growth, etc. She made the comment in her report on local tax policy, for example, that any replacement of the council tax should be progressive, and yet the Government's plans for changing that still maintain a very regressive system with those in the bottom 10 per cent of equalised household disposable income paying around 10 per cent of their income in council tax and those in the top paying 2 or 3 per cent. Changes there could help, and at the other end of the scale, you cite work by Bell and Iser, published in 2013, which showed that, over the period of devolution from 97 to 2012, it was the top 1 per cent of increased share of total income by more than all the other remaining 99 per cent. Again, that is within the competence of the Government to tackle through its proposals on income tax rates and thresholds. I am wondering why there is nothing in here on fiscal policy, particularly given the important role that it can play, not on isolation, in tackling inequality? I would say that, in relation to our proposals for local government taxation, they come in the back of the commission process that was engaged in the last parliamentary session. I think that what the Government has proposed to take forward, which was set out in the manifest on which we were elected to form the administration, very much reflects what was set out as the outcome of that commission process, to have a mixture of local taxation based on household value and income. That is the basis in which we are elected. That is what we plan to take forward. Similarly, we set out our proposals for how we will handle responsibility for the devolved element of income tax and the manifest on which that is the basis in which we were elected. You are perhaps right to reflect that there is not much by way of reference to fiscal policy on this labour market strategy. There was some suggestion from some others that the labour market strategy that I have published is too long and too detailed already, so it is not a deliberate process of omission. I would recognise that our labour market strategy is set out in the labour market strategy. It has to interact with a range of measures that we are taking forward, our economic policy, the work of the fair work convention and, indeed, the other policy levers that we will use as well. I would recognise that. Thank you very much, convener, and good morning to the minister. I am delighted that you started off part of the debate with the committee talking about data. We are quite exercised by it. The acceptance of the need to develop data is very welcome. I would appreciate just some indication of when you think that these data sets will come forward, some may be more challenging to do than others. Whether you would consider reporting on the overall success of strategy to Parliament on an annual basis, it could be simply something in writing. I am very conscious that the NPF has a very high-level statistics designed to measure outcomes, which are broad, but judging the success of the strategy is also about the milestones on the way. I wonder whether you would respond to that. To take the last point, I would absolutely concur with that point, Ms Beall. We can only judge the success of the strategy by measuring the milestones that you refer to. In reference to your first point, I am not trying to obfuscate the issue, convener, by any stretch of the imagination. I am both to give an absolute guaranteed timescale beyond the setting that I want to do it as quickly as is practically possible. Having made the point that it is incumbent on me to get the relevant stakeholders around the table, I think that I would want to hear what their perspective is. First, on the type of data and information that we feel that there is a gap in relation to and that we need to gather, we then need to assess what capacity will be required for that. Indeed, whether we have the capacity and then move forward. It is hard for me to give a definitive timescale, but let me underwrite that by saying that this will be a serious process. It has been made clear to me by a range of stakeholders that this is an area of concern, which reflects the perspective that Ms Bailey has set out. It is one that we need to respond to and take very seriously indeed, so we will try to do that as quickly as possible. On reporting to Parliament, I am happy to reflect on how we might do that. I would observe that there is nothing that I could do to stop at this committee or any committee of the Parliament, even if I wanted to. Of course, I would not want to do it, convener, calling me back before them to report on progress with the strategy. However, I take the point that something more procedural in some form of report back might be useful. How frequent that might be, I think, is open to some dialogue, but I am happy to continue to engage with the committee on that. Again, I think that the strategic group that I will establish or will be establishing again as quickly as possible has a critical role in considering how we might do that. That is a very helpful response. Can I move us on to agreement to pay the living wage, because that is something that the Government has done for social care workers through local authority procurement. It is referred to in your strategy. It is something that we very much welcome. On the back of that, I take it that the Government agrees and believes that paying the living wage as a part of procurement has now been resolved, because the minister will recall our debates in the chamber about restrictions placed on procurement and being able to carry the living wage through that. If that is the case, does he now intend to strengthen guidance because it would be in keeping with the strategy in line with what he wants to do and would reinforce the very positive development around about procurement in social care? I would be interested in the minister's comments on that. The first observation that I should make is that I do not have direct policy responsibility as a minister for this area, but again I am not trying to towards the question taking it head on. We would still consider that there are some restrictions. The specific example that you cite has come around by the process of dialogue and negotiation between a range of partners who have all willingly agreed to come to that arrangement. It has shown that we can take certain measures where we can engage in the process of dialogue, but in terms of compulsion, I think that there are still restrictions. We have, of course, though, it would be incorrect to say that there is no reference to consideration of the living wage through the legislation that we took forward around procurement. There is that set out in guidance and is there for any public agency that is engaged in the exercise of procuring a particular service to reflect on? Of course, it is this Government's responsibility to constantly keep its guidance under review to ensure that it is reflecting the most up-to-date position. I thank the minister for that response, but I would invite him to look at strengthening that guidance in light of what has gone on in the social care sector. It is a very welcome advance, as far as I am concerned. Dialogue and agreement is always a positive thing, but, at the end of the day, it puts the procurement act in a slightly different line and enables the Government to think about strengthening the guidance, which, if it can pay the living wage to social care workers, which is very positive, then let's look at doing it for more. That is potentially the route that we can do it through. Of course, I would reflect on that. It is not just those in social care. Everyone, covered by the Scottish Government's pay policy across the national health services, paid at least the living wage. We can do that because that is our specific pay policy. Essentially, we could compel ourselves to do that, but let me thank Ms Bailey for the invitation and reflect on it more. Let me just be clear that it is not about the areas of public spend such as the NHS where you control pay policy, which is indeed welcome. It is the £10 billion of procurement money that we pay into the private sector, where there is an opportunity to influence wages there, and particularly for women. I invite you to look wider, which is where the procurement bill was than simply the pay policy of the Scottish Government. I understand the point, and I suppose that the point that I was making is that where we can demonstrate that we have absolute control over the process, we will take steps, but yes, I hear your invitation and will reflect on it. Always pleased when the minister is listening. Can I continue on the basis of gender? A number of comments have been made about women returners, and I welcome the commitment from the Government in the labour market strategy to that. One of the main routes for reskilling women returners was, in fact, part-time college places. They played a key pivotal role in enabling women to get back into the workforce in a way that was both local and manageable, given their other commitments, whether it was childcare or older people's care. That increased emphasis is likely to include some further provision within the college sector because they have experience and skill at doing this. You will be aware that the number of places was cut, and another route was through increasing employability skills, the private sector involved in that, and again the Government reduced the employability skills budget that they had responsibility for by 40 per cent. I am keen to understand how you are going to do this positive work for women returners, when two of the mechanisms that help them to get back into the labour market have been diminished in that way. Let me be clear about our commitment, the manifest commitment on which we have stood is to protect the 116,000 full-time equivalent places at colleges. That is a manifest commitment that we have consistently adhered to. We continue to fund our short-term courses that can demonstrate the lead to work or progression towards work. Those courses are still funded. If you look at the figures that we have most recently available to us, it demonstrates that the number of women that are at college right now, as opposed to the starting place in the 2006-07 undertaking full-time study, has increased. I do not disagree with what the Scottish Government did, because it decided to focus on full-time courses and younger people. I do not disagree with the staff that the minister has just shared with the committee. My principal point was that a lot of those women returners are older. They were also accessing part-time courses, because that suited their other responsibilities, and it is those courses that are no longer there. I am asking with this new emphasis on women returners, which is very welcome, how we are going to deliver that when two of the principal mechanisms for doing so—one, part-time college places, and two, employability skills delivered by the private sector, where the budget has been slashed by 40 per cent—we are struggling to make the kind of impact that we want. I am wondering how you are going to take that forward. I will return to the point that I have just made. It is not the case that there is no provision of short-term courses. Short-term courses that can be demonstrated to lead to employment are still—they still continue to be funded. In terms of your perspective, the number of places for older students—I am always loath to use the definition of older students as over 25, but that is the definition. Indeed, I am. Ms Bailey, thank you for reminding me. The number of students over 25 who are taking full-time studies has increased by 26 per cent since 2006-07. I understand the point that you are making. The point that I am making is that we continue to—this is a labour market strategy that is designed to ensure that people can get into employment to become part of that labour market. Where courses will lead to that outcome, we continue to fund them. The minister will recognise my frustration. He quotes full-time figures. I am asking about part-time courses. Unless we understand how gender segregation works in terms of occupations, I fear for the strategy. Again, I would ask the minister to reflect on this final question, convener. Some business leaders have, whilst welcoming the strategy, have been troubled by where business demand for skills rests in all of this. Indeed, I think that they thought that it was marginalised in the strategy. How will you reassure them that that is not the case? How will you build in intelligence from the business world beyond this advisory group that will inform some of the numbers that you see coming forward? I think that it goes back to what I made earlier. The door is always open. There is no one that we are not willing to hear their perspective from. I have had, as I mentioned earlier, a productive conversation with the Scottish Chambers of Commerce last week. I do not recognise the characterisation of this strategy when it marginalises the role of business. It is a critical element of the strategy that is going forward. The strategy will only be successful if we are ensuring that we are providing people with the necessary skillset to be a meaningful employment at the end of it. That can only happen if we are engaged with employers, whether they are in the private sector, the public sector or the social enterprise third sector, saying that those are the skills that we require and the jobs that we have at the end of the process. That is something that I have been at pains to recognise, not just in relation to the labour market strategy, but across the entirety of my portfolio. There is no point in us training people where the outcome is going to be trained for something that will lead to them being in employment. I could not agree with the minister more. My approach was not to suggest that that was the case but simply to say that the Chambers of Commerce thought that businesses were being marginalised. Although I welcome your engagement across Scotland, it does need the civil service and the different agencies to engage in a systemic way to ensure that that information is taken on board. I would say only gently that we did. I referred to the stakeholder events that we held earlier. We did invite the Scottish Chambers of Commerce to participate, but they did not. That is not a criticism, but I recognise that there will be various demands on the time of the personnel involved. I have had a useful conversation with Liz Cameron of the Scottish Chambers of Commerce last week. I have made a commitment to meet her any time to discuss this. I have already said that we will speak with the Federation of Small Businesses, the CBI and other representative organisations, just as we will speak to the STUC and others as we seek to take the strategy forward. Richard Leonard Minister, earlier on, you used the description, Ambitious. Do you think that a target of a total number of living wage accredited employers in Scotland by autumn of next year of 1,000 when, last time, I looked to over 360,000 private sector employers in Scotland? Do you think that that is ambitious? Richard Leonard From our starting position, when we set up the accreditation scheme, there were none, which was only very recently. Yes, I would. Richard Leonard We may differ in our— Richard Leonard Well, that is allowed. Richard Leonard A definition of ambitious. On the same paragraph on page 7, where you set the target of 1,000 accredited living wage employers by autumn 2017, you also referred to something that you would support as gain-sharing approaches. Could you tell us what you understand that means? Richard Leonard I am just reading it again, Mr Leonard. Richard Leonard Well, I suppose that the point of that is that it is in recognition of this being a collective effort. I think that it is talking, going back to the point that I made to Mr Paterson and others about this, trying to be a collegiate approach, getting everyone around the table to learn from one another, so I think that that is what I am referring to. Richard Leonard So, I just referred to the reward system, for example. Richard Leonard In terms of remuneration, for example. Richard Leonard Well, I suppose that that is why we are trying to take the steps within the competence that we have to promote the living wage, for example. Richard Leonard I remind you that more than 80 per cent of people in Scotland are paid at least the living wage. It is the highest proportion of any of the countries in the United Kingdom. Richard Leonard Okay, so you do not see gain-sharing approaches linked to pay ratios as it is set out in that paragraph, for example? Richard Leonard Well, no, I do. I mean, I think that we are very clear in the— Richard Leonard It is a paragraph that talks about living wage, pay ratios and gain-sharing approaches. I am just trying to establish what you understand by gain-sharing approaches. Richard Leonard Well, I have alluded to what I consider it to be, but yes, I would also consider, you know, you are taking one paragraph in isolation. This is a whole document, and Mr Mason started off by asking me a question about the hollowing out of the pay structure. So, yes, we want to do rather better in relation to that pay ratio now. There are limitations to what we can do in terms of our legislative competence to achieve that. So, I think that it is very much about trying to ensure that the jobs that we can attract to Scotland and help to facilitate to be created here in Scotland are helping to do rather better in relation to that pay ratio. Richard Leonard Okay, but is not part of the remit of the Fair Work Commission and that whole Fair Work agenda, which has been adopted by the Scottish Government, to consider industrial relations in the round? Richard Leonard Of course, but again, I would make the point. I mean, I can recall that you asked me in the chamber and then followed up in writing about our response to the union bill, which was a response as an employer, you know, as collectively as a legislature, we cannot legislate around this area. So, within the competence we have, we will act and do what we can. Richard Leonard Okay, well, just on the question of the promotion of good industrial relations practice, on page 17 of the document, you refer to the examples of the saving of the Scotch steel industry with the purchase of the steelworks in Scotland by Liberty from Tata, and you also refer to Ferguson shipbuilders, Ferguson marine engineering limited. Are you aware of the fact that Ferguson marine engineering limited refused to recognise the trade unions on site? Richard Leonard Well, what I would recognise is that we were dealing with a set of circumstances whereby that yard was threatened with closure, which would have had a devastating impact on those directly employed there and on the wider economy. And we sought to intervene to ensure that the yard continued to have a future going forward. That is the actions that the government could take. Richard Leonard Earlier on, you spoke about the workforce being respected and listened to. Richard Leonard Yes. Richard Leonard Do you not think that the recognition of a trade union is part of that process? Richard Leonard I think that trade unions have a critical role to play. That is why, for example, as part of this labour market strategy in relation to the review group going forward, trade unions will be a critical partner. Richard Leonard So, where do you stand then on the question of the actions of your case study in this strategy? Richard Leonard Well, I think that the case study is a demonstration of how we, as an administration, and I go back to the point that I have made within the legislative competence. For example, we could not legislate to ensure that any employer had to recognise trade unions. That is not something that we can do. However, what we can do is we can intervene in trying to ensure that those employers that might otherwise have gone out of existence with the consequent negative impact. I am sure that you would not have wanted ferxins to close, Mr Leonard. We can do what we can to try to ensure that these are two examples of what we can do to try to ensure that these employers can continue. Richard Leonard So, as part of your fair work approach, which is part of your labour market strategy, you do not see any role for the Scottish Government in encouraging employers that previously recognised trade unions to continue to recognise trade unions after a rescue? Richard Leonard No, I did not say that at all. Of course, we have a key role to do what we cannot encourage. Richard Leonard Will he contact the club? Richard Leonard I am happy to reflect on that, but the point that I am making is that we can certainly do what we cannot encourage. I think that it could be rather better if we had wider legislative competence on those matters. We could, for example, repeal the effects of the trade union bill. I am sure that that is something that you would welcome. Richard Leonard Yes, but I will also… Richard Leonard Will you join the Scottish Government in trying to see that power to devolve to this legislature or do you rather see those powers in the hands of the UK Government? Richard Leonard My final point on that question is whether, or not, as I understand it, Fergus Marine relies on a certain amount of public procurement, whether you would be prepared to exercise the leverage that you have through public procurement to encourage that employer to once again recognise trade unions that have been recognised for decades in that yard? Richard Leonard Well, again, I would go back to the point that I made in response to Ms Bailey. There are limitations to what we can do under the current legal framework around procurement, but I am always happy for us to reflect on what more we might be able to do. Richard Leonard On that last point, what has the Scottish Government done to follow up to ensure that conditions in public procurement contracts have been followed through? Richard Leonard Well, clearly, not every element of public procurement will be directly in our hands, convener, so it would be primarily the responsibility of the procuring authority. To give an example of a local authority engaged in the exercise of procurement, it would be their responsibility to ensure that the terms are adhered to where it is our responsibility. That is something that we will continue to do. Richard Leonard Have you done studies or follow-up on Scottish Government procurement contracts to establish whether or not those conditions have been adhered to? Richard Leonard I would expect to, but I could not write to you on that point, if you would like me to, convener. Richard Leonard If you could do that, that would be helpful. The other question on that point is, in terms of procurement, have you thought about the possibility of making it a requirement in public procurement contracts that appropriate wage structures above and beyond the national living wage are provided for? Richard Leonard I have explored that territory already. There is a limitation to our ability to compel that to be part of the process. What we can do, and I think that I have made the point where we have direct control of our pay policy, we will ensure that the living wage is the very least that people are paid? Richard Leonard I am just wondering whether that is correct, if it is a Scottish Government contract, whether or not that is not something that you can have as part of the criteria when awarding a contract. If we look at the issue, for example, of pay inequalities, that is one way in which you could seek to ensure that pay inequalities do not actually occur? Richard Leonard I have already made the point that Ms Belly, it would be incorrect, as has been claimed, that there is no reference to the living wage as part of the guidance that exists around the exercise of procurement that it has legislated for. That can be a factor that features as part of any procurement exercise, so we have already legislated for that. That is underlined by our perspective that there is a limitation to how much we can achieve under the current legal framework. Richard Leonard I think that the legal framework is based on the European Union rules. Is that your understanding as well? Richard Leonard It would come from UK legislation, whether or not that has been defined through EU legislation. I think that would be something that we would need to look at, but you think that you are probably correct. Richard Leonard I think that it probably is. Richard Leonard Yes, I think that you are probably correct. Richard Leonard I think that is the answer. Richard Leonard I think that it is the case, then certainly that I am not clear on what limitations you are referring to. If a Government agency decides that certain criteria are appropriate in being set for tendering for a public contract, I am not certain that the Government agency is limited to simply addressing the question, for example, the national living wage, it is certainly not prevented from doing that. Richard Leonard Well, I think that it comes down to whether, if it is an open procurement exercise, how those who respond to it and tender for it, whether or not you can compel them to pay above and beyond what is set out staturally as the minimum wage. Richard Leonard Well, it is not a question of compelling them. It is a question of saying that we are awarding a contract. We set out certain criteria and certain rules and bases upon which we will assess the bids. The contract is awarded to the contractor who, if you allow me to finish, who most closely matches the criteria set. The contract is obliged to fulfil the criteria and the conditions that the contract has agreed. Richard Leonard I think that that reflects the point that I am making in terms of what is set out in statutory guidance. That can be part of the consideration of any tenders that I think. Richard Leonard I suppose that my question is, is it and does the Scottish Government follow up on that? Richard Leonard Again, not having direct responsibility for procurement policy, I think that that is something that we need to follow up on writing with. Richard Leonard Perhaps you could do that, please. Right, I think that we are just about at the end of our time. I thank the minister and the others who have come with him. We look forward to perhaps hearing from you again at a later time and certainly hearing from you in regard to the matters that you said you would follow up on. Richard Leonard I will suspend the meeting briefly while our witnesses leave and we then move into private session to consider item 3 on the agenda.