 Y Prif Weinidog Cymru? Felly, rwy'n fawr, i'n ei wneud byw'r fawr i'r gwaith sy'n gweithio eu chymeiddiadau mewn dyma i'r gwell mewn cyffredinydd Covid-19. Rwy'n rhoi cyntaf Ieithaf gyngor i gael i gydag a wneud i gael eu cymdeithasol. Y c 팬 oesaf, mae'r cyfanieis ar gynnig iawn i'n cyfrifiadau zesdoedd i'r newidio cyfanieisio bryder. Gweithio y ffordd y ffordd o'r ffrwysau i Gwyllaredd mai gynaldiol for this upcoming parliamentary term, and the second is the supplementary legislative consent memorandum in relation to the UK environment bill. First, we have consideration of whether to take agenda items 4 and 5 in private. Those relate to the consideration of the evidence heard today. Is the committee agreed to take items 4 and 5 in private? We now turn to evidence from the cabinet secretary for net zero energy and transport. The evidence session is an opportunity to explore key Scottish Government priorities across this portfolio. I therefore welcome Michael Matheson, cabinet secretary for net zero energy and transport, and Kirsty Birch, director of energy and climate change, who are both attending in person. I believe that you are both joined by a number of colleagues online, and please feel free to bring in your colleagues where necessary for a particular question. Cabinet secretary, let me start by saying that although you have been in office in your new role for some time, let me on behalf of the committee congratulate you on your appointment to this new portfolio, and we very much look forward to working with you and your officials in the months and years ahead. I understand that you would like to begin by making an opening statement. Thank you for your kind comments. I look forward to working with the committee as well over the months and years ahead. I will make a statement that will hopefully help the committee to understand some of the key priorities for the portfolio in the months and years ahead. I am particularly grateful to the committee for giving me the opportunity to provide you with this evidence, given that it is climate week when we are engaged across Scotland. A whole range of activities and events in order to promote action to address the climate emergency. This is a crucial portfolio, and it reflects the global challenge that we face in terms of meeting the climate change challenge that we have and also tackling the economic, social and environmental issues associated with that. My priority is to ensure that together we deliver our net zero commitment through a just transition and we secure a climate resilient Scotland. Scotland is already halfway towards our 2045 target, but despite strong progress, significant challenges remain. We must work in partnership in order to meet them. As reinforced in the programme for government, we are taking decisive, ambitious action to deliver a fair greener Scotland. We are redubbling our efforts to get back on track with our interim emissions targets in a way that leaves no one behind. A draft of the next climate change plan will be delivered in the first half of this parliamentary session and to refocus our efforts on climate resilience. We will also host a national climate resilience summit in October this year. The Government has now responded to the Just Transition Commission, which sets out an ambitious agenda, lays the foundations for our work for this Parliament and beyond and includes our new national just transition planning framework, a world first that reinforces Scotland's position as a climate leader. We are beginning work on an energy just transition plan as part of our refreshed energy strategy to co-design with those most impacted. We will announce details on further plans, including the utilisation of the 10-year £500 million Just Transition Fund for the North East and Murray. We will take action on energy transition, including publishing a five-year hydrogen action plan, a consultation on our draft onshore wind policy statement, including our ambition that an additional 8 to 12 gigawatts be installed by 2030, an expansion of up to 10 gigawatts of new projects in Scotland's seas over the course of the next decade as part of Scotland's offshore wind seabed leasing programme. Heat demand also accounts for some 20 per cent of Scotland's greenhouse gas emissions, so we have allocated at least £1.8 billion to exhilarate deployment of heat and energy efficiency measures in homes and buildings. On final heat in building strategy, we will establish a national public agency to provide leadership and to harness the potential at scale to decarbonise heat. We will be driving forward our green transport revolution through our strategic transport project review, which will publish its phase 2 recommendations for consultation later this year. That will determine transport investment priorities over the next two decades, including a climate compatibility assessment and support our world-leading commitment to reduce car kilometres by 20 per cent by 2030. Nature-based solutions will account for around 30 per cent of the emissions reductions that are needed, and we will publish our biodiversity strategy within a year of COP 15 next month and aim to introduce a natural environment bill in year 3 of this Parliament. We will not fall behind EU environmental standards and we will launch a consultation on the statutory guidance for the guiding principles on the environment as part of the continuity act. In just over two months, we will proudly welcome COP26 to Glasgow. COP26 must move the world from rhetoric to delivery and mobilise the action, finance and resources and joint working, which is needed in order to deliver upon the Paris agreement goals. COP26 is a catalyst for further our climate agenda, highlighting Scotland's approach to climate action and emphasising the critical importance of a just transition and climate justice. As part of that, we must take the opportunity to attract new investment, innovation and sustainable growth here in Scotland. We will continue to work with partners to ensure a safe, secure and successful event, and one that delivers the changes that are needed. On that note, convener, I am more than happy to pause there and to respond to any questions that the committee may have. Thank you very much, cabinet secretary. As you made clear in your opening remarks, this is a vitally important portfolio with a very wide remit. That is my first question. When the First Minister announced this new portfolio, she said that the aim was to bring together the key actions that are necessary across the Government to achieve net zero targets. Over the past couple of weeks, we have heard from key stakeholders that a whole-of-government approach is going to be required in this area, including delivery of key priorities across portfolios, co-ordinated approach to financing and the monitoring of progress against targets across the whole of government. In other words, we are looking at a new approach to Government to achieve net zero targets. What does all that mean for how you intend to take things forward in this area as cabinet secretary for net zero targets? What practical measures do you intend to implement? What new ways of working can we expect to see to deliver on those challenges? One of the key things that the First Minister is determined to do is to make sure that, as a Government, we have a strategic approach to our means by which we seek to achieve net zero targets. That involves co-ordinated action across all aspects of Government, which is my lead responsibility as the cabinet secretary for net zero targets. What does that involve in practice? A key part of that is to build on the good progress that we are making. The publication of our updated climate change plan at the end of last year was a reflection of co-ordinated action that has been taken forward across different portfolios in Government and the actions that we then have to be taking forward within those individual portfolios. What we want to do is to build on that and to make sure that we see the sustained progress that is necessary, whether that is the decarbonisation of the public estate, whether it is in education or health or whether it is the decarbonisation of transportation and energy, or making sure that we are providing the right type of support and assistance to sectors to ensure that they have the skillsets that are necessary to meet the net zero challenges going forward and the transition that will be necessary within their own individual sectors. It is right across all of those different portfolios, and my job is to make sure that cabinet secretaries across Government and ministers across Government are showing a leadership that is necessary within their individual areas to drive forward that agenda, and to make sure that we have the right type of co-ordinated action at a national level. When it is around skills within particular sectors, it is to make sure that we are identifying those skills and where the potential skills gaps are and to ensure that we are then developing the policies and interventions that are necessary in order to support and address those skills gaps. Alongside that, in order to help to assist us in reshaping the way in which Government is going about that, you may be aware that the intention from the permanent secretary to appoint a director general for net zero given a dedicated director general within Government that will be responsible for supporting ministers and Government policy and the delivery of Government policy. To give us that more co-ordinated approach in a dedicated space within Government that sees the necessary response internally in Government to assist us in mirroring those objectives. In summary, it is about providing that co-ordinated approach, making sure that we are taking a strategic approach and also making sure that we are developing the policies that are necessary across portfolios and that they are being driven forward at an individual level within Government to make sure that they deliver on objectives to become the net zero nation by 2045. I will give one example of where there might be the cross portfolio work required. The Scottish National Investment Bank was established with its primary mission to deliver a net zero economy. At the moment, on paper, the responsibility for the bank is with the Cabinet Secretary for Finance. However, in order for the bank to help the economy to reach its net zero climate targets, presumably you will be actively involved in the strategic direction of the bank as well? I suspect that the person to your right may have an interest in this, given that she was responsible for setting up the national investment bank. A strategic mission part of that is to help to support us in achieving net zero. That is part of its mission statement and has been right from the very outset. Prior to coming into the portfolio, as the Cabinet Secretary for Transport and Infrastructure, I was closely involved in the work of the national investment bank, particularly on how we can use financing of the national investment bank to help to support the decarbonisation of transportation. He has been working closely with the transport sector in looking at where they could provide financial support and assistance to assist with that. Equally in this portfolio, that type of engagement with the national investment bank will continue. I have a pattern of meetings over the course of the year where I engage directly both with the chair and the chief executive of the national investment bank to discuss how they are making progress in areas that are of interest to me as well. The only note of caution that I would say is that the intention behind this portfolio is that I take responsibility for every aspect of net zero policy within Government. The purpose behind that is to give that type of strategic leadership within Government. Areas around making sure that we are providing the right type of financial support for skills and learning in helping to achieve what we need to do in the net zero agenda, it still remains within education and learning and skills and within the economy portfolio as well. I just want to say that in case the idea is that I am just going to hoover up all of those responsibilities into one single portfolio in itself, which would not only keep me extremely busy but would keep this committee extremely busy as well. In short, in answer to your question, I have regular engagement with the bank. I have regular engagement with industry that are engaged with the bank in areas that are within my portfolio, within the energy sector that are working closely with the bank and looking to get financial support for some of the initiatives that they are taking forward. I think that it would be fair to say that the bank has been set up in a way that it is working across different Government portfolios to provide support and assistance where that is necessary. I am sure that your existing portfolio is wide enough without adding to it, cabinet secretary. We spoke briefly about financing the transition towards net zero. I have a question about the Scottish Government's budget to achieve targets. We had evidence from the climate change committee a couple of weeks ago, and part of that evidence was that significantly more investment is required now to achieve the 2030 and the 2045 targets. On a UK-wide basis, the estimate that an extra £50 billion per year in capital expenditure is required from 2030 onwards. Has the Scottish Government estimated that the additional public sector investment required to achieve the 2030 and 2045 targets? It is important to look at that across a number of different strategic areas, so priority areas, if you like. The level of investment that will be necessary in looking to decarbonise domestic premises and the pace at which that can be taken forward will be different from the level of investment and the pace of decarbonisation within the energy sector, transport sector or construction or manufacturing. It will all be operating at different paces, so it is difficult. Some of the technology to support and assist that has still to be developed, which the climate change committee has highlighted as well, is that some of the technology that will be needed to support decarbonisation in those sectors is still in its infancy and still needs to be commercialised and developed. It will be difficult for me to give you a global figure to say that this is a precise amount that we need to decarbonise all of the Government estate or the public sector estate. What we are doing, though, is that it is part of the £1.8 billion that we are investing over the course of this Parliament in looking at decarbonising heating. Part of that is looking at the public estate. Other areas, for example, in health, where we can prioritise decarbonisation of heating in the health estate, in the education estate, are measures that we can take that can help to support that transition at an earlier stage within the public estate. Alongside looking at how we can use that resource to decarbonise domestic heating systems as well. I cannot give you a global figure, but I can say to you that the pathway that we have set in the course of this Parliament sees more investment going towards supporting the decarbonisation of the public estate, both at a domestic and non-domestic level. That £1.8 billion of investment, which is already a level of investment in this area, is a very clear indication of the level of investment that we see will be necessary over the course of at least the next five years in order to help to support the pathway to get the level of decarbonisation that we need. I can add a couple of points. The trajectory, so that it is clearly net zero, requires huge investment across the economy. The trajectory is upward, so when the Committee for Climate Change says 50 billion, that increases in the course of this decade and beyond. I suppose that we do not know exactly yet how much of that is public sector. Given the scale of it, it has to be a combination of public sector, private sector and people paying for some of it themselves. We are working out exactly what we do through regulation, where, as the cabinet secretary said, putting a lot of effort into attracting private sector investment, but it will be substantial. For example, in the last capital spending review, the Scottish Government created a £2 billion low-carbon capital fund to support that. Significant funding has been put in through capital spending review, and the resource spending review that is coming up is going to be absolutely critical. However, it is going to have to be a combination of, as we said, private sector, public sector and individuals. I find a question for me before I bring in Monica Lennon on a supplemental in terms of the remit. In terms of increasing transparency in the future over the financing for net zero, do you see a situation in which, in each portfolio, the Government might be able to separate what is core funding in that portfolio and have a separate budget for the net zero targets and those ambitions in that individual portfolio? Yes, that is the idea around carbon budgeting, so you can have a clear line of sight on that. This was an issue for the previous committee, the Eichler committee, who I know were keen to get a better line of sight and better transparency around that. We agreed that we would do that, and we have commissioned work from the Fraser of Allander Institute to carry that forward. We had hoped that that would be completed possibly this year or early next year. The feedback from them is that they need longer in order to do and complete the work properly. The timeline that we are working to is later next year and that they expect to have completed the modelling that will be necessary and the work that will be necessary to facilitate that. I wrote to the committee a number of weeks ago just outlining that there was probably going to be a delay in the timeline around this issue. Not through anything that we are doing, I think that the Fraser of Allander Institute needs more time to carry out the work properly. That should put us in a position to do exactly what you are looking for, so that there is greater transparency around investment areas around decarbonisation and trying to help to support net zero and allow committee to have more information to be able to scrutinise what the Government is doing and to challenge the Government where they see that as being necessary. I am happy to keep you informed and up-to-date as that research has carried out. Thank you very much for that update, cabinet secretary. Monica Lennon. Thank you, convener. Good morning, cabinet secretary. I wish you well with what is a crucial and very big portfolio. I want to bring you back to that Hoover bag of ministerial responsibilities. You mentioned the importance of just transition and climate justice in your opening remarks. Can I just get some clarity as to where ministerial responsibility for climate justice sits? You also talked about the new director general for net zero. I wonder if they will have responsibility for climate justice and just transition as well. Let me take them into a different part. The just transition in ministerial lead is the responsibility of Richard Lockhead. He is part responsible to Kate Forbes in the economy portfolio, so he reports to both of us in these matters, but principally to myself on the just transition aspects and the work that we are taking forward around just transmission. On the issue of climate justice, are you referring to climate justice on an international basis? My view is that climate justice and the policy that we take forward very often, climate justice is very much about helping to support those other international countries where they experience the worst effects of climate change, but they have contributed the least to creating the crisis in the first place. Responsibility for that sits within international policy area, where my officials have some input into it, but it is an international policy, but if that is not the bit of climate justice that you are referring to? I think that this is where a lot of stakeholders are looking for clarity. So climate justice is absolutely an issue of global context in terms of the global south, but it is also very linked to just transition here in Scotland. We have lots of low-income communities that marginalise people in Scotland who seek climate justice. I wonder which minister has that lead responsibility. You said that your officials have some input to the international portfolio, but if we had questions very much about climate justice, which minister would you expect to see in front of us? If it is linked directly to climate justice and making sure that communities have an opportunity to express and say their view on how we should go about tackling climate change, whether it be through the climate assembly or the work of the just transition commission, it would be most likely a combination of either myself or Richard Lockhead. It depends on which particular areas. Richard's principal responsibility is in areas around just transition and looking at that across the board. That is whether it be in the energy sector, whether it be helping to support communities that are looking to express their views and be engaged in the whole issue around the climate assembly and the work of the commission. Again, Richard is leading in that piece of work as well. Some aspects of it may come to myself directly, but by and large it is within Richard Lockhead's portfolio. We all appreciate that it is a huge portfolio, and it is right that there is a strategic approach in Government working together. Do you have any concerns, cabinet secretary, that there could be some risks and challenges that a lot of those responsibilities have been handed out to various people? It might be hard to have that overview and for someone to have that lead responsibility. What does it mean in terms of how officials will have to work to make sure that there is good oversight and co-ordination? Is it handed out to other ministers? Yes, there are lots of different ministers now. There are a lot of climate-oriented working setting elsewhere. There are five ministers involved in my portfolio. Ultimately, they all report to me in areas where they are responsible for. Some of them are responsible to other cabinet secretaries in the areas that sit within their wider portfolio areas. Ultimately, they all report to me. Part of the role of a cabinet secretary is to try and make sure that we are taking a consistent co-ordinated approach within our portfolio, in whichever policy area it may actually be, even though a particular minister may be leading in matters. From an official point of view, and I will let Gursley say a wee bit more about that, officials are very good at making sure that they are able to align the direction of policy that has been set by cabinet secretaries and then fall through into the work that individual ministers may then take forward. Sometimes that comes back to cabinet secretaries to make sure that they are content with the approach that they have been taking. Officials are very good at being able to flick between those two processes. Gursley, do you want to say a wee bit more about how officials manage that and co-ordinate that? We do our best, but it is a very sensible question. Climate change is like those really difficult cross-cutting policy issues, like child poverty. It cannot sit just in one place. Partly, it is about ensuring that others who hold the levers have ownership and really care about climate change. We talked about the Scottish National Investment Bank, but also the cabinet secretary's role and us as officials leading on climate change plans. It is our job to bring it all together, a spot where we are not doing as much as we can, so it is that strategic co-ordination role. You asked the question about the net zero DG. Your specific question was... Your role is also to bring all that together, but I have forgotten your specific question. Yes, it was just to get clarification if they would have the policy responsibility for climate justice and just transition. My understanding is that they would, but working really closely with the cabinet secretary, be responsible for our international relations, because that is exactly what we do now. COP is a great example. The organisation in running in COP sits in climate change, but we work incredibly closely with Scott Whiteman, who is the director for international. The way that we do that, more generally on climate change, is that we have something that is called the global climate emergency programme, because there are so many aspects to climate change. We have about eight projects under that. Not everything is run within that, but just to give you a flavour of it, we have a project on financing the transition. We have a project on delivering our climate change plan and the update, the catch-up report that we are due to deliver. We have a programme on economic opportunities. We have a programme of communication and engagement, and some of those are led by directorates in other parts. We come together, we have key directors that are chaired by the current DG economy, probably chaired by the new net zero DG in the future, to just bring all of us together and track how we are doing. I will give you another example. What might be useful for the committee is to have an organisation chart setting that out. It is a very helpful background, but seeing it in a bit of paper would be very useful. I am not responding to your question about the DG net zero. In essence, all the areas that sit within my portfolio area, including ministerial responsibilities, would come under the DG net zero, including the areas for Marie Gouge on the Cabinet Secretary for Rural Affairs will cover her portfolio area. Even though Richard Lochhead is split between myself and Kate Forbes, the bits that he is responsible to me for would come under the DG net zero bit. An organisational chart would probably be the best thing to try and help to assist the committee if that would be useful. That would be very useful. Good morning, cabinet secretary. Good to see you in this role. I have one general question and two questions on energy. My first question is, what in your judgment do you view as the biggest risk to Scotland in achieving its net zero targets? What are you most pessimistic about and what are you most optimistic about? If there is one area that is over the course of the last couple of months in speaking to different organisations and businesses across the sector, if there is one area that is of increasing concern to me, it is access to labour and skills. What is becoming increasingly apparent in some sectors is the skillsets that they need, particularly in the renewables sector and access to labour in the sector, is becoming increasingly challenging. Principles as a result of is no longer being members of the European Union. There is a potential that that can start to act as a constraint on the scale and pace of the transition that we see in some aspects of the energy transition that will be necessary. If there is one area that stands out in terms of fresh flashing red lights in my control board, there is access to labour and skills that could act as a real constraint in the next couple of years. That has come about as a result of the feedback that I have heard from those within the industry. Areas that I am most optimistic about, one of the things that has struck me over the course of the last few months in this sector has been the scale of ambition that there is within the private sector to take on the challenge and the opportunities afforded with net zero. There has been a real sea change in some parts of industry, including in the energy sector and oil and gas, and the opportunities that they think are there around the technology and the opportunities that may come from moving more into the renewables sector and low-carbon energy. I have been extremely impressed with the commitment and the level of investment that companies are prepared to make in order to make that transition. I am optimistic that that will be sustained and will continue going forward, so that private sector investment that I have been impressed with and encouraged by. The bit that I am most pessimistic about is that, I will not describe it as being pessimistic, but I think that it will be the most challenging 60 per cent of the measures that we will need to take forward in order to achieve our net zero ambitions involve behaviour change. We know that trying to change people's behaviour can be extremely challenging and is fraught with a whole range of different risks. It is important that, as we go forward in trying to address those issues, that we are open and honest about the nature of what that behaviour change is going to have to look like and that we are politically honest and open about the need to make sure that we take forward the policies that can deliver that type of behaviour change and where we can to try and reach a consensus and agreement in the same way that Parliament reached a consensus and agreement on setting the statutory targets on the policies that will be necessary to help to support us in achieving those targets. The aspects around behaviour change are probably going to be some of the most challenging areas for that political debate and discussion and will also affect the level of change that will be necessary. I am not pessimistic about that, but I think that it will probably be the most challenging. That is very insightful. In relation to energy and particularly in relation to what you have just said about skills, we knew that there would need to be, in terms of just transition, the Just Transition Fund support for skills for those who want to transition from high-carbon-based industries into renewables. Does that not therefore give a greater impetus in the need to try and support that skills transfer? We talk about dual fuel, we need now dual energy skills, and I am not clear, and I think that it is not yet clear who is responsible for helping, for example, to allow certification to be transferred from the skills that people have, for example, in North Sea developments into renewables. Although everybody says that, yes, a skills passport is needed, I am not quite sure who owns that, who is driving that, and perhaps now reflecting on your answers to the first question, there is more an imperative to take ownership and drive that forward. You might raise a really important point here, so there are two distinct aspects to this. There is the aspect of skills and the aspect of labour. Government can do something about skills. We are working with the oil and gas sector and also with the renewables sector in helping to support that. For example, the Green Skills Academy through the investment that we are making through the energy transition zone and through our commitment for the north-eastern Murray through the transition fund of £500 billion over the course of the next 10 years, all of which will look to help to support that transition. Of course, the oil and gas sector will need to maintain and sustain its own skill sets going forward. Not everyone will be able to simply flip over into the renewables sector. We need to make sure that we are working with the oil and gas industry sector to help to support them in securing and maintaining the skills that they need, while at the same time also helping those who want to transition into the renewable energy sector that they are able to get the support and assistance that is necessary. For example, the idea around the skills guarantee is to support those who are looking to move into the renewable sector. There are programmes there to support them to do that, to get the skills that they need to make that transition. That is a bit of work that we are taking forward in terms of within Government. Ownership of that sits between my portfolio and the skills portfolio. Between Richard Lochhead and Lorna Slater, they both have responsibility in driving forward that agenda in making sure that we are working with the sectors in order to help to support the training and the skills that are necessary. We have given a clear commitment around the investment that we will make in the energy transition in the north-east of Scotland to do it on a co-production basis so that we are working with the sector on what we need to put in place to help to support that transition. The second point is access to labour. There is absolutely no doubt that politics, whatever your politics were in Brexit, is now acting as a constraint in some sectors. It has been raised on a regular basis with me. I was recently visiting a site where it is a district heating system and they are installing energy efficiency measures in the properties associated with it and neighbouring to it as well. It was put to me by the company who is carrying out this work, because you could double the amount of contracts that they are being awarded, but they would really struggle to take on that work because no longer of access is to the labour that they had previously. They are constrained even with the training programmes that they have. Their apprenticeship programmes are saying that we need access to labour and that is now starting to impact on their ability to grow their business. That is separate from the skills aspect in itself, which is now starting to come through in a way that is concerning me that it could act as a constraint on our ability to drive forward some of this agenda at the pace that we need to see it That is very clear. The other question that I want to ask is about the changes with the UK Government in relation to contract for difference in terms of supply chain development, particularly for our domestic supply chain here in Scotland. What is your view of those proposals? What impacts they might have, for example, on the Scotland leases? Is there any way that we can quantify what that impact might be? We have received information on the CFD proposals from the UK Government. Some of it is moving in the right direction. We will give feedback to the UK Government on that. There is a need to make sure, in our view, that we are maximising the potential economic and social benefits that come from the energy transition. The CFD process historically has not worked well. It has caused real problems for the sector. It has also resulted in peaks and troughs, which means that the skills that you build up at the peaks, when you get to the troughs, are lost and then you have to re-skill to bring them back in again. There needs to be greater certainty in that process and some of the proposed changes could assist us in achieving that. I do not know what the time frame is for the UK Government around this, but off the top of my head, but we will be giving them feedback in that process. On your specific around the Scotland leasing programme, which is the first official leasing programme in Scotland in many, many years, we have embedded in that process through the Crown Estate Scotland a requirement for those who are bidding in this round and in future rounds to put in a detailed policy statement on the domestic supply chain, how they intend to utilise the domestic supply chain and sustain that going forward. That will then be taken into account in the assessment of those bids within Scotland. We are looking to see whether there are further measures that we can take to reinforce that, but there are some legal constraints around that in terms of fair competition specification. I know that from engagement with the sector that companies who are clearly bidding in the scotland round process are very keen to ensure that they are doing everything that they can to help to support and sustain the domestic supply chain where they can. We are engaged with them in looking at what we can provide a way of support to assist and ensure that that happens as well. When I was recently up at NIG, there is no doubt that companies like Global Energy Group and their plans are very much in the partners that they are working with. They are very much about making sure that we have a good domestic supply chain manufacturing and all the skills that are associated with that. We need to make sure that we are getting as much out of the domestic supply chain as possible, because the CFD process in the past has not worked well for us. The reforms alongside our own measures can help to make sure that we have a much more sustainable domestic supply chain in this area, in particular offshore wind. Just to follow that line of questioning, last week we looked at the Just Transition and the committee heard concerns that the plans are perhaps not sufficiently developed at this stage. There is also, as you alluded to earlier, the announcement of £500 million over 10 years for a Just Transition fund. Again, I do not think that we have any details yet. The question becomes, what are the timescales for details of the Just Transition plan and the Just Transition fund? When, following that, can we expect concrete plans to be in place? Presumably, until those transition plans are in place, the Scottish Government will not be taking decisions that would jeopardise jobs in the sector. A number of different points in there. For example, the North East Just Transition fund for the North East and Murray, we have already started the programme of working and engaging with the sector in looking at what their priorities would be over the course of the next 10 years. In helping to support that transition, we committed to taking it forward on a co-production basis. That is exactly what we intend to do, so that work has already started. When will it be completed? I do not give you a specific date at the present moment, but it is not something that we want to be simply open-ended. Given that it is a commitment and investment that we are looking to make when it starts making now. I would be more than happy to make sure that, if there is a more specific timetable that I can give you, I can come back to you with the specifics on that and Kirsty may be able to see a wee bit more around that. On the issue of sectoral transition plans, the challenge that you have taken us forward and understand those who would say, we do not know the time frame and we want it to happen quite quickly. The challenge in this area is that, for example, if you take five priority areas, such as energy transport, manufacturing, construction, land use in agriculture, five key priority areas that will play an important part in the transition, they will all go at different paces and will all need different interventions and support. The pace of which we have seen change within the energy transition has been quite significant, whereas the pace of change that we have seen in areas such as agriculture has been less so. The pace of change that we have seen in transport has been significant, but the pace of change that we have seen in manufacturing is not as quick. What we are seeing is investment in some of those areas. Some of them will be more technological based, whereas some of them will be more practice change based as well. Some of them are about the technology that is being developed. The scope of some of that, so in the manufacturing side, industrial processes, hydrogen is likely to play a big part in decarbonising manufacturing industrial processes. Going forward, there is an issue about development scope and space, the spirit at which that will happen as well. The reason that it is very difficult to give you a specific time frame for each of those sectors is because of the different competing needs and the pace at which some of that will be taken forward. However, what we have set out is the just transition framework. That is to help to inform that process and the way in which the priorities in those areas that we will be looking to take forward to help to shape what those just transition plans will look like and to help to provide sectors with an understanding of how we are going to go about developing those plans. One of the first will be in the energy sector, so we have given a commitment to publishing a new refresh of our energy strategy next year. Alongside that, we will have the energy transition plan, so that will be the forefront and that will be the first of the transition plans to be published and that will inform the process that will help us in other sectors as we go forward. I hope that that deals with two different elements of that. The investment in the north-east is not dependent on the sectoral transition plans being completed, but there is no doubt that, as we go forward, some of the things that will be identified in the sectoral transition plans will help to inform how some of that investment can be made in the years ahead. I am very grateful. I understand the point that you are making. My concerns next year are quite critical in terms of publication of plans. I might come back later, because you mentioned hydrogen in there, but it is not a substantive point that I want to make just at this stage. A slightly different topic, if I may, Cabinet Secretary. Four years ago, the Scottish Government announced a publicly owned energy company to generate and supply energy. 500,000 pounds later, this seems to have been dropped, or last week we heard that that is not going ahead. Are you able to help the committee to understand why the policy changed and when was the decision to drop it made and who buy? Do you have any oversight of what that £500,000 was spent on? The funding that we spent on a business case and analysis around the business case for the creation of a public energy company. The reason there has been a change in our approach here is because, at this stage, the priority is the scale of the transition that we now need to see in the decarbonisation of domestic premises. Four years ago, we were not looking at the need to decarbonise a million homes between now and the domestic heating system between now and 2030. The scale and nature of our priorities have had to change. As a result of that, trying to be able to decarbonise a million homes, 50,000 non-domestic premises during that time frame as well, we need to take not so much the supply of the service, but the co-ordination of the action that will be necessary to deliver on the decarbonisation. An energy framework, an energy-based organisation can give us that type of leadership. A key part of the agency will be helping to co-ordinate and manage the decarbonisation of domestic and non-domestic premises. There are a variety of different places where folk can get advice and information on this at the present moment, but we need to make sure that we are co-ordinating our action in this area. Let me give you a practical example. I do not know how many housing associations we have in Scotland, social housing providers, but it will probably be into three figures at the very least in terms of housing associations and social housing providers. They will all have a responsibility in looking at decarbonising their housing stock and managing that. It is not so much the supply of that energy, but it is the co-ordination of the action that will be necessary to deliver the decarbonisation of it. What we want to avoid is getting into a situation where we have quite literally every social housing provider in Scotland going about trying to manage this or to design this or to get advice on this through different routes, and an agency will have a responsibility in providing that co-ordinated approach and giving that central focus and assisting more is a massive and mammoth task in trying to decarbonise the level of properties that will be necessary. That was the reason for that change in approach. When was that change in approach considered? Earlier this year, the former Minister for Energy, Paul Wheelhouse, was looking at the issue, in particular looking at how we can adapt to the scale and nature of the change that we now face. It is not about supply, it is about co-ordination and planning of that. An agency-based approach was considered to be a much more effective means by which to consider that. That approach was taken. I know that there was this suggestion that there was surprise at this, but an announcement was made last week. It was announced, I think, in a parliamentary question to Monica Lennon before the summer. It was not a new announcement. We had already set that out as our approach, so it was not new. It is reflective of a change in our priorities and the scale and nature of what we are now facing here, where it is not so much on the supply end. It is more about co-ordinating, planning and managing what is going to be a mammoth task in decarbonising both social and private loan properties and non-domestic properties. I am very grateful. I think that what I am hearing is that, in some ways, the focus has changed from the supply to the demand and what needs to change in demand. One final question on that, then, if I may convener, and then someone else will come in. Just, cabinet secretary, sticking with that publicly on energy company, obviously I thought that the weekend your conference voted for a different policy that conference would prefer that an energy company was created. Will that impact your thinking, and, if so, what steps will be taken? The scope for a public energy company, at some point in the future, is still there. However, the immediate action that we need to take is the co-ordinated planning around this mammoth task that I have mentioned. A big part of where we have got to, let us take energy in itself in particular, is that if you look at supply, particularly in electricity, in Scotland there is no more now, our electricity use that we use is almost 100% from renewable sources. Within a lot in the supply side of things, massive achievement in terms of decarbonising an energy supply system, what we have not done enough on is in the demand side. That is where we need much more co-ordinated action and that is specifically where an agency can give us much more focus in supporting assistance and achieving that. However, there may still be, at some point, a role for a public energy company that can assist us around meeting some of the challenges that we have within the existing energy market. However, our key priority at the moment has to be about trying to achieve what is a very stretching target between now and 2030 that has been set down on a statutory basis by Parliament. That means that we have now got this enormous challenge that we face that we did not have four years ago and the most effective way to do that is through a public energy agency that can assist in co-ordinating that work. Before I bring in Monica Lennon and Mark Ruskell, Cabinet Secretary, you mentioned the scale of the challenge involved in different sectors. My understanding is that this new agency is going to be a virtual agency that was announced by the Scottish Government. What does that mean? Initially, what it will do is it will help to co-ordinate those who are providing advice and information at the present moment with a view to then scaling up and being able to actually carry out that function much more in a single-based organisation. The big challenge that we have here is the pace at which we have to take this forward. We do not have time to spend a lot of time scratching our heads and working out how we are going to create a new agency in order to start delivering something that we need to start delivering now, this year and next year, the year after that. What we are doing is initially setting it up on a virtual basis, which will look at co-ordinating the action across different agencies and groups that are providing advice and information at the present moment, to looking at then helping to co-ordinate the actions and that information in a much more single-based organisation that will then also help to support and assist, as I say, social housing providers on the actions and the works that they should be looking to take forward, how they can look at built purchasing aspects such as whether it be ground source heat pumps, etc. All of that type of work that they can help to co-ordinate and support them in a system with, in a way that is not there at the moment, there is a gap in that. That is the reason why we are starting off from my virtual point of view, because we need to start moving on this now and I don't want to waste time having a debate around who should head up and how it should operate. We can deal with that as we go forward. I understood. Final question on this before moving on. Do you have a budget for the number or an estimate for the number of staff this agency will have over the next 12 months? No, because it will be working on a virtual basis at work. It will be co-ordinated internally within government, first of all, and then we will look at using the existing resources that are there, providing this advice and information, and then what we will do is we will then start to look at what the shape and the skill sets will be necessary in actually having a permanent agency in place, so we are not at that stage at this present moment, so I cannot give you that figure or the numbers. Monica Lennon to be followed by Mark Ruskell. I am sticking with the public energy company. It was one of the first questions that I put to the cabinet secretary in respect of our new roles. I think that it is an area where actually there is lots of political consensus, where in terms of party policy, the SNP, the Greens and Scottish Labour are on the same page, and a public energy company has the potential to be transformative and to be really progressive. I think that it was probably the focus of debate at SNP conference because people are very concerned about fuel poverty, as well as the environmental issues that we have raised today. 527 votes to six at SNP conference is a very strong mandate in favour of a public energy company. I did hear the cabinet secretary say that it may be in the future, but given that there is such a degree of political consensus, surely this is an area where people in the parliament could work together to build on the consulting work that was done to see if we can make a public energy company a reality sooner rather than later? It is still on the agenda, but it is not in terms of priorities. Given the challenge that we face, it would not deliver the transformation that we are looking for in decarbonising domestic and non-domestic properties. That is what an agency can assist us in doing. In terms of looking at how a public energy company can help to support us in tackling issues around fuel poverty, it remains a live issue for us to look at how we can, and I am more than happy to work with other parties in looking at scoping and considering those issues. Given the statutory targets that the Parliament has set and the scale of the challenge that we now face as a result of that, we need to be honest and recognise that we need to co-ordinate action to support that transition and that work. The public energy company itself would not deliver that. That is not what its purpose would be, but an agency can assist us in achieving that transition. The idea of a public energy company going forward is still one of the areas of policy that we remain committed to, but, in terms of priorities, it is establishing the agency. I am more than happy to work with parties that are supportive of it. An issue around tackling fuel poverty is that it can play a part in helping to tackle fuel poverty. We are going to be taking forward a new fuel poverty strategy and it may be something that will feature within that. The reality is that we need to make sure that the regulatory functions of the UK energy market are taking the necessary interventions in order to minimise the risk of pushing more people into fuel poverty. Even with a public energy company, we will still face that risk of those problems. I think that we should not ignore the fact that there are systemic problems within the existing UK energy market that contributes to people being pushed into fuel poverty that a public energy company itself will not be able to resolve operating here in Scotland. That will require actions by the UK Government to address those regulatory failings that are having an impact on people ending up in fuel poverty. We should not lose sight of that given the level of nature and the scale of how that contributes to fuel poverty in Scotland and the UK as a whole, but particularly here in Scotland, given the nature of our climate and the rural nature of our communities. Thank you, Monica. Mark Ruskell, I apologise for not bringing you in before. Yes, that's okay. It's been an interesting debate already. Just picking up on your comment earlier on, the Secretary of our behavior change, obviously one of the advantages of having a public energy company or public energy companies is that you can drive that public confidence to make changes in the way that we heat our homes or to take the interventions that are needed. I'm thinking what could emerge from the agency, and could it be a case that instead of having a national energy company supplying electricity, we could have more municipal public ownership of some of the heat networks, for example, or solutions that we need in communities? Could there be a different approach when it comes to heat rather than a national energy company competing with a big six? Yes. I think that when most people think about a public energy company, they think about it as competing with the Scottish pills or the Scottish gases of the world in providing energy to people's homes. Where there is scope, and I think going forward around a public energy company or companies, is around offering much more heat as a service, which is a different concept, I think, of what people have for what a public energy company is. That is looking at, for example, it could be a local authority offering a distribute heating system where they can offer people the service that they can get at this fixed price for their heating. That is a model that has been tested out just now in Denmark, which we have been looking closely at. The bit in the future that I think will make a real difference in communities is looking at things such as heat as a service and how public agencies could provide that. We need to look at trying to facilitate the opportunities for it, so if we have major infrastructure projects that are going in health, education and justice, is there an opportunity in looking at the energy capacity that those facilities will need, that we can get wider social community benefit from them, where you effectively could then have a public agency offering you heat as a service for your property. That is a model where I think that there is real potential going forward, and I think that that could help to tackle things like fuel poverty. It is very different from what I think most people have as a traditional view of a public energy company, a state-owned energy company that provides energy to you within energy markets alongside private commercial companies, where heat as a service is a much more bespoke, focused approach that could help to tackle issues such as fuel poverty. That is an area where we are already giving some consideration to, and my view is that of a public energy company of sorts, that is the type of thing that you are much more likely to see happening in our area. We are giving much more attention to than the traditional, just taking on the big six. Could that link into the target to decarbonise all public buildings if we were moving towards hospitals, for example, major NHS facilities that have a huge heat demand? Could that be a way of socialising that even further in supplying local communities? I wanted to think the discussions that I was having with some officials a number of months ago when my old hat as a justice secretary was that when you are looking at building something like the new replacement for Bolinny prison, given how close it is going to be to a whole range of social housing, is there an opportunity for us in building that and the energy plant and facility that will be necessary for it to make sure that it is zero carbon, but we can also get wider community benefit from it as well? The exact same with the health estate, same with future schools estates as well. Is there an opportunity to do that? It may not be that it can cover thousands of homes, but maybe hundreds of homes in an area could benefit from it. It is that type of model that could be much more effective. An agency can help to support and assist some of that work as well, rather than getting too caught up in the idea of, as I say, we need to have a public sector company that can take on the big six. It is about trying to facilitate that type of heat transition that a public sector company could assist us with. If I could move on convener to something a wee bit different, that is biodiversity, which I know you share with Mary Gougeon, in terms of a shared role, but perhaps a priority across the whole of government in the way that climate change is becoming. I mean, this stuff is difficult, I acknowledge that, but the start reality is that we failed to meet 11 of the 20 HE targets that were set for 2020. There is perhaps more of a need for just transition in some of these areas than in other sectors. I think that you have already alluded to agriculture, fisheries and marine environments being areas where we need to see a step change, we need to see change. I would just be interested in your thoughts on that. Obviously, you have got part of this brief and you have a minister working with you on this as well. What do you see as the challenges, but also the opportunities going forward? How do you ensure that biodiversity is as mainstreamed as climate change is becoming in terms of government policy, whether that is across farming or planning system or energy or whatever? I think that it is recognising that we have a twin crisis, a climate crisis and the crisis of nature loss and biodiversity loss, which is having a direct impact on our environment. I think that the approach that we are looking to take forward in government is that we recognise that it is a twin crisis that we face and biodiversity loss is as important as the climate change challenge that we face. The ministerial responsibilities that we have been given is a reflection of that as well in terms of prioritising biodiversity. I think that the challenge is that the whole debate around biodiversity is that it is not as front and centre as the climate change debate is. COP15 does not have the same pickup as COP26. It is possibly where some of the climate change debate was five plus years ago. It is not quite there in the same vein as well. What we need to do, having accepted that there is a biodiversity emergency as well, is that we need to make sure that the policies that we are taking forward in agriculture reflect the need to tackle the loss of biodiversity and the challenges that are associated with that. Some of the legislation that we are going to bring forward, such as the natural environment bill, will be one of the areas that will assist us in looking to address that. Some of the investment that we are making—we have the additional £500 million that we are investing in our natural economy in order to help to support tackling biodiversity. There are practical issues such as having a further national park. We know that our national parks can play a really important role in helping to support, protect and nurture biodiversity. I visited Cairngorm national park during the close of the summer. There is some fantastic work going on there in helping to rebuild habitats and how communities can sit alongside those habitats. They can also play the role of testing out new in different approaches, tackling some of the flooding issues that they have, water courses and trying to do it in a natural way. Some of the learning that you can get from that environment can then be deployed in other areas with national parks. I got a very strong sense from the national park that Cairngorm want to see themselves in that role, and they want to help to support and assist with that. It is a combination of legislation that prioritises our own policy making, but there is no doubt that the crisis around biodiversity is not quite in the same public consciousness as climate change. I often refer to the twin crises that we face and continue to emphasise that point to try and help to ensure that people are aware of the biodiversity crisis that we face. On the topic, I mentioned just transition. It is inevitable that there will be some sectors where a just transition is needed. For example, inshore fisheries, potentially scarlet dredging and some trawling sectors. If those activities are incompatible in the inshore with biodiversity targets, it results in a conversation about what we will wear next and how the industry transition is needed for financial support packages. I realise that that is perhaps more at Musgu John's area, but there are similar issues around how do you manage a just transition, whether we are talking about oil and gas, or agricultural fisheries or anything else? Where do you see that sitting within government? Is your part of government the bit that leads the thinking around just transition process and governance? Is that Richard Lochhead having that conversation? The principle leading this would be Mary Gougeon as well around that. For example, what about 40 per cent of our waters are covered by MPAs at the present moment? We do not have management plans, but yes. We have given a commitment to highly protected, mean protected areas as well, so we have given a commitment to take forward that again applies further restrictions in some of those areas in order to protect and support and assist the restoration of biodiversity in these areas and protect what is there as well. However, the principle role in managing the changes that shall be needed within the sector to reflect that would fall to Mary Gougeon and working with the sector and looking at what mitigations we need to put in place to help to support the just transition within the fishing sector that could be impacted by some of those policies as we go forward. Mary Gougeon will be able to draw up on other ministers, whether it be Richard Lochhead around just transition aspects, Lorna Slater around green skills, and other ministers that can assist and support policy work in those areas around marine biodiversity and some of the changes that we will have to make in the years ahead. It may or may not all fit into nice, clear compartmental boxes, but you should be no doubt that cabinet secretaries, such as Mary, can draw up on ministers from other portfolios to a system in managing and dealing with some of the challenges that will be necessary as we tackle issues around marine biodiversity. Thank you, convener. Good morning, cabinet secretary. If I can go back briefly to what Mark was speaking about fuel poverty earlier and you touched upon district heating as one of the ways forward, I'm quite proud to say that in Aberdeen City Council we already have that. We have a heat with rent scheme as well and it is very, very good. I can't wait to see it being pushed forward into other areas. We've got one in Falkirk as well, in the high flats, just in case you think it's just in Aberdeen. We'll always do Aberdeen in the northeast, cabinet secretary. Regarding the decarbonising homes that she was speaking about earlier, can I ask about how the Government expected the Government to support improvements in the energy efficiency and the decarbonising heat in hard-to-treat homes? That's always the difficult one. When you're talking about hard-to-treat homes, do you talk about rural properties that are off the grid system or are you referring to protected properties or older properties? Probably them all, if I'm being quite honest, cabinet secretary, because everyone has got their own. The reality is that there will be some property types that are trying to achieve net zero given the nature, scale and style of the property. It's going to be extremely difficult and some older, listed buildings etc. Older properties, the technology is not quite there and being able to offer that level of insulation etc. If I take a step back, in decarbonising properties, it's not just about changing the bit of equipment that they've got in their house in order to make it a net zero bit of kit. Moving from a natural gas-based boiler to an air-source heat pump system, it's also about making their properties more energy efficient. Making them more energy efficient as someone who stays in an old house is much more challenging because the technology is not quite there in the same way. For example, properties that have lath and plaster do not lend themselves to cavity wall insulation in the same way. There are genuine technical challenges with some of those properties, but there are measures that you can take that help to improve their energy efficiency. A key part in the transition is not just about simply changing the source of their heating but making their properties more energy efficient as well. Some of that will be, their focus will be on doing that on a retrospective basis. Part of it will also be about changing building regulations to ensure that new build properties are being much more energy efficient than they are at the present moment and also installing zero-emission heating systems. That will be a way in which we can deal with some of the new type of properties, but there are some properties where it will be technologically difficult. In addition, those who are off-grid are the skill and nature of the options that are available to them and are more limited. Some of the work that we are looking to do in terms of providing support to those who will need assistance in moving from their existing cabin-based heating system off-grid is the scope for grants and loans that are available for them in order to help to change the system that they have and to try to assist them in doing that. However, it will, of course, prove a challenge for some properties in rural areas where it may be a combination of not only the off-grid but an old property and it is difficult to insulate as well and to make more energy efficient. Some of the programmes can try to offer some assistance and support to them in looking to achieve that, whether it be through grants and loans or a combination of both that might be available for installation and also for changing their domestic heating system. I asked for the rural as well because I have rural properties in Aberdeen Donside and people sometimes do not realise that. If I can move on, if you do not mind, on to transport. You were speaking earlier about the target of a 20 per cent reduction in car travel by 2030. Can I ask you how you would like people to change their way of transport by the end of the session? Where would you like us to be in that 20 per cent target by the end of the session? How do you see us getting there? There is a target for 2030, so would you call to take it forward? Largely it would achieve through behaviour change, a combination of things. One is those travelling, particularly for short journeys, making greater use of active travel or public transport rather than short car journeys, private car journeys. Two is changing the way in which we work. One of the things that has come from the pandemic is the number of people who are working from home. I know them should we all earn a position where we have all had to work from home for a period, but we continue to work from home at various points just now, where I know that some businesses have changed their business model, where they will have a hybrid system, so rather than everybody having to come into the office now, some are working on the basis that you come into the office every fourth week or work from home the rest of the time, or you come in two days a week to the office and work from home the other three days a week. We are seeing businesses change their model, which can help to contribute to reducing car usage as well. It will be principally achieved through behaviour change and people making greater use of public transport and active travel, particularly for short journeys. People working more from home and using their car less for their commute to work will be one of the factors that will help to feed into contributing towards the 20 per cent target. Can you explain how the Government intends to make it easier and more attractive for folk to walk or cycle, or use other methods that do not involve transport? If there is an area where there is a significant level of investment, capital investment is around active travel. We have given a commitment to invest more than £100 million a year in active travel. That budget has doubled over the past couple of years alone. We are starting to see some of the benefits of that coming through in different parts of the country. That budget will effectively treble over the course of this parliamentary session. If we have committed to spending 10 per cent of the transport budget on active travel, which will take us up to more than £300 million a year by the end of this session, being invested in active travel, that will be for cycle ways, for adapting existing road space, for active travel, cycling and wheeling, and for pedestrian ways. There is no doubt in my mind that where we get this right is transformational. It is not just about encouraging people to make more use of active travel, but it transforms communities. I was recently in the south side of Glasgow on the south city way, which goes from—I do not know if anyone else has been there—the Queen's Park into the Merthyn city. It has quite literally transformed Victoria road as a shopping street and as a community street in a really positive way. At the same time, it has provided more pavement space for pedestrians and dedicated cycle routes by taking away a bit of the road space. Traffic still travels both ways in that road. Just by realigning it, it has transformed the place. That is the type of transformation that we want to see. Salki Hall Street is another very good example in Glasgow, where it has been absolutely transformational in that street. We want to see more of that happening across the country. Alongside that, we are also investing £500 billion on bus priority infrastructure. I was seeing some of those bids in the work around those bids starting to commit to fruition in different cities across the country. Again, it is about making bus services more reliable and more frequent to encourage people to make use of bus, particularly in short journeys in cities and towns. That investment is over and above the active travel investment that will make it have a big impact in helping to support and encourage people to make use of public transport and active travel options and improve their community at the same time. Thank you for that, convener. Thank you, Jackie. Liam Kerr, to be followed by Collette Stiemson. Yes, thanks, convener. It was just since Jackie Dunbar raised transport. I wonder, Cabinet Secretary, if I might just ask very briefly about ferries. The predecessor committee to this one described the management procurement of the two new ferries as a catastrophic failure. That was December last year. I think since then we've been told that the new completion date is 2023, which I think is five years behind what was originally scheduled, and the final cost will be above £200 million. I only have the one question. Do you know, Cabinet Secretary, is that now the final projection in terms of target date and cost, or could it move again? Given the need for on-going vessel replacement, what is the Government doing to ensure that this catastrophic failure doesn't happen again? You're right. That was well rehearsed by the previous committee and the minister responsible for ferry policy at that time. Paul Wheelhouse set out the Government's approach and the issues around the challenges that we've got with the two ferries presently at Ferguson Marine. In terms of the timeframe, I'm not aware of any further changes to the timeframe, but I'd be more than happy to ask Graham Day, who's leading in a series of policies to write to the committee to set out further details on that. I think that there's a standing commitment from ministers to keep the committee up to date on issues around the ferry procurement process, but I'd be more than happy to get him to give you the most up-to-date position on where we're at with the timeframe, but I'm not aware of any changes to the timeframe that was previously stated. Very good. Do you know if the top of your head I appreciate it might be a question for Mr Day and perhaps we bring him in, but what's the Government going to do to make sure that this doesn't happen again, or what has been put in place? We set that out in response to the committee's report in the last session, the measures that we're taking forward across a number of different areas and looking at how we can help to minimise the risk that's associated with the procurement of ferries, also some of the issues around Ferguson Marine and the challenges that we've experienced there. If it would be helpful, I'd be more than happy for the committee to be provided with a copy of the Government's response to the committee's report and the actions that we were taking or have taken not to address some of those issues if that would be useful. I have no doubt that the committee community must have access to that, given that the Government has already responded to those issues. We do have, cabinet secretary, but it would be good to get an update on that from the minister, because the question from Liam Kerr was about the ferry procurement, but the knock-on effect, as you will know from press coverage, is that we don't have an island's MSP in this committee, but I think that the impact on island communities, tourism and business on islands has been fairly significant over the summertime. The knock-on effect of those two ferries not being available means that the ferry network is operating beyond its age capacity. I'm assuming that that is something that you recognise and that is something that you're looking at as the cabinet secretary responsible for transport. Repulsulating this is with Graham Day, and as I said, the committee receives a full and detailed response from the Government in relation to the issues that were highlighted in the report. Number of different issues, though, you're raising there, convener. Some of the challenges that we had in the ferry network over the course of the summer were not directly associated with the two vessels that are not presently available. A significant amount of the disruption that was caused in the ferry network during the summer months was because of social distancing measures that had to be maintained in the ferry network, which meant that ferries were only operating at 35 per cent capacity. Until those measures were lifted, there was significant constraint on the ferry network. Of course, where there is a technical issue with a vessel and where you don't have spare capacity, we sought to try to address that on a temporary basis. I bring in the MVRO to help to provide resilience on the storm away crossing, particularly for freight services, which again were impacted because of social distancing measures. We're also looking at the potential for securing other vessels that we might be able to bring in at some point in the future. On the specific issues that Mr Kerl raised around the actions that were taken off the back of the committee's report, that was all set out in great detail to the committee when we responded to their committee response, including in the parliamentary debate in the matter. If the committee wants a further copy of the Government's response to the committee's report, I'm more than happy to make that available, but I have no doubt that your committee class must have that to hand, given that we responded to the committee on the issue. That's recognised, cabinet secretary, but you'll also recognise the report was December last year. A lot has happened since December last year over summertime, and we're now in September, and we still face massive disruption to the ferry services. You're asking me two different things here. You're asking me about the disruption over the course of the summer months. I'm putting on record that things have evolved and changed since December. Yes, but you're asking me two different things though. You're asking me, I'm asked about the response to the findings from the committee's report, which was set out in detail to the committee, so there's nothing new there. However, if the committee, as I said, wants a copy of that again, I'm more than happy to make sure that that's sent on to the committee. In terms of the disruption during the course of the summer months, if the committee wants to look at what the purpose and the reasons for that disruption is, that's clearly a matter for the committee, and I've got no doubt that both Graham Day and Transport officials will respond to that, as will CalMac and CMAAL in some of the challenges, but one of the major challenges that we had over the course of the summer months on the ferry network was directly as a result of the need to maintain social distancing, which meant that capacity was at no more than 35 per cent, which meant that, as soon as you had any technical disruption to the system, it became even more challenging. There's always technical disruption in the ferry network, one way or the other, and there always has been, but it became exacerbated over the course of the summer months when capacity was so restricted and demand was so high over that period. If there are specifics about what happened over the course of the summer, I'm sure that Transport Scotland officials, CMAAL and CalMac and ministers will be more than happy to respond to that. Thank you. I'm sure that we'll be looking at that in due course. Collette Stevenson, please. Sorry, I didn't realise it on automatically. Good morning, Cabinet Secretary. Before I go into my questions, I was heartening to hear about the crossover work with regard to the prison estate, because I actually sit on the Committee for Criminal Justice, so we're actually going to speak into the prison estate tomorrow, so I could find that back anyway about Berlinium and whatnot, so it's good to know that that's moving along nicely. I'm going to touch upon COP26. Obviously, the eyes of the world are going to be on us in just over a month's time, and it's exciting stuff. I was really going to ask you the question about how is the Scottish Government liaison with the UK Government to ensure that there's a world-changing agreement there at COP26, and there's a lasting legacy that we can all be proud of? We all hope that COP26 is going to be successful. It's the best if not the last chance, I think, to deliver on the Paris agreement and to do it in a fair and just way. I think that the international community need to use COP26 to demonstrate ambition. They also need to deliver on the promises that were made in the past, particularly in areas such as finance and helping to support those in global south, where more than £100 billion was promised to help to support and tackle climate change and climate adaptation and mitigation in global south, which is not quite materialised in the way in which it was intended, which means that those who are most affected by climate change but have caused contributed least to it are not getting the support and assistance that they need, so it needs to show ambition and it also needs to demonstrate that it's prepared to meet the promises that were made as well. We're working very closely with the UK Government as the host country for COP26 to make sure that it's a safe COP and that we try to manage some of the risks that are associated around that, particularly from a public health point of view and the on-going pandemic. Relationships are positive. I have regular discussions with Alex Amher on our plans and how we are managing those issues. We are obviously in discussions with the UK Government on the opportunity to ensure that in venues such as the green zone that we are able to demonstrate Scotland's leadership and ambition around climate change, while the world's eyes are on Glasgow and Scotland for a two-week period. We are still progressing those discussions in trying to get to a point where Scotland and the other nations of the UK have a fair and equal opportunity to demonstrate the actions that they are taking forward. We are also working with a range of other organisations, so we are co-chair of the Under 2 Coalition, which brings together regional and state Governments from across the world. I have been participating in events internationally around that as well. Very often meetings start at 10 o'clock at night in order to try and get folk in Australia on the line in the early hours, while folk in America on the line in the early morning. There is a growing recognition that at COP26 there has to be proper recognition of the important role that both regional and state Governments have in delivering on climate change. We need to make sure that the reality is that the UK Government cannot achieve its climate change objectives. Scotland is not delivering on its climate change objectives. We are all interdependent on one another. COP26 gives an opportunity to recognise that it goes beyond just that of the nation states at a UN level that both the regional and state Governments and local Governments play a really important role in achieving net zero. The other part is to make sure that communities have a voice. We have a programme that will involve several hundred events that are taking place across the country to try to provide an opportunity for communities to be able to express their views around what they want to see from COP26. In the course of the last week or so, we have had the Glasgow Dialogues, which we have been sponsoring, which has brought together individuals from across the world to say what they would like to see coming from COP26. We have been sponsoring that, largely from those from the Global South. We will use that to help to inform and feed into the COP process. The First Minister announced yesterday that we will be funding and hosting the UN's youth assembly, which again will provide young people from across the world an opportunity to set out what they think the priority should be for COP26. What they are looking for, we are leaders to agree on, is part of that process and to feed into the process formally as well. We are trying to give international reach, but we also want to try to make sure that at a domestic level that people are able to feed into the process as much as they can in helping to make their voices heard. It is really great to hear that we are invested in our young people because I think that that is absolutely key in terms of climate change. I am moving on to that question. Obviously, the just transition paper came out and I touched upon it as well about our young people and finance as well. Can you outline to me what we are doing in terms of green participatory budget with our young people? Is it something that we have started to roll out and is it something that we are doing at a local authority level? What are the future plans taking that forward so that we are leaving a legacy? I am not making myself clear, but we are including our young people going forward in terms of participating in the budget and what happens in their communities? In terms of scope to take forward green participatory budgeting at a local level, it is a matter that is led on by local authorities, director themselves, in facilitating young people to be able to shape and prioritise what some of those priorities should be. We use networks such as the climate assembly, the Just Transition Commission and who make up those groups to inform our processes and where our priorities should be. We want to encourage local authorities and other third sector partners to work at a local level in a co-ordinated way in how they can go about setting green budget priorities. One of the things that we are taking forward is the creation of the community climate hubs. We have two pilots up and running now, one in Highlands and one in North East Scotland. The model there is to try and help to bring communities much closer together in determining what they think their priorities are in order to help to tackle climate change. Previously, the approach has been that you bid into a pot to get money for projects here and there, but it is to try and help to take a much more organic approach to it as coming from the bottom up the way, if you like, so that it is a programme that is informed by the local community's priorities and what their needs are and what they identify as the changes that they want to then make, and then to look at how the funding can then be used to help to support and change that. A key part of what we are trying to do is behaviour change. Too much is hitched on the idea of technological solutions. It is about trying to drive behaviour change at a local level, and young people have got a critical role to play in that. I was discussing this issue with someone yesterday, and they said to me that they do not think that young people are that engaged in issues of climate change. When I go to schools, there are by and large two issues that kids are most interested in. One is justice. They have got a real interest, usually because of where they are in their modern studies course and their dissertation, and the second is climate change. The by and large do not ask me much about health or things like that, but they are very interesting. Climate change is always one of the top, I would say, two or three items that young people ask me when I visit schools for Q&As and issues. As young people are very interested in that, there is also some work getting taken forward in schools in looking at resource tool kits that are being developed to support schools in looking at climate change. Labr high school in my constituency has got a really good climate change programme that is based within its school education programme, so I think that it is something like that. 20 minutes a week in each subject area has to be dedicated to climate change in all subject areas to get kids and young people thinking about it, and I have got climate action groups, which many other schools have as well. There is a lot happening there, and the community climate hubs are one of the models that we are trying to use at a local level to help to support the development of priorities that are being set at a local level in tackling climate change. That is good. From my perspective, even within my constituency, I think that the deposit return scheme is something that will be warmly welcomed within the school estates for the amount of plastic bottles that are used up. I look forward to seeing that coming next year at some point. Is that coming legislatively? Is that correct? Yes. There will be more details when we set out that. Lamar Slater is the minister for the circular economy that is leading in that area of policy, so she will set out more details on the scheme in the weeks ahead. It is not only important that we are recycling that stuff, but that we also need to reduce our use of it. That is part of the challenge that we have to reduce the amount of waste that we are creating. We need to make sure that our school estates are playing their part in looking at how we can reduce our waste and the amount of waste that builds up in schools through lunch packs and everything else, which will play an important part. Some of the measures that we are looking to take forward are to try to help to support that type of behaviour change. Briefly, Mark Ruskell will be followed by Fiona Hyslop. Yes. There will be a launch at COP of the Beyond All and Gas Alliance, led by Denmark, Costa Rica, New Zealand, France and other states that are accelerating their just transition for the oil and gas sectors. I think that the Welsh Government has been in discussions around Amboga. Is that something that you are aware of? Is it something that you would seek to engage with? I cannot see off the top of my head that I am aware of it. To be honest with you, we have been inundated with requests that we are trying to manage our way through. I am certainly interested in it if they have already been in touch or if you have information that you want to forward on to me, but it might be one of the things that is in the system, as I say, because we have been quite literally inundated with requests during COP. Fiona Hyslop, please. On COP, what will Scotland's message be? What will be the contribution in terms of our indicative national determined contribution? We have heard that just transition is quite specific to Scotland, but it is very internationally resonant. What is unique from the Scottish perspective in our message and contribution to COP? There are a couple of different things here, both in terms of leadership, where we are, that we are over halfway to net zero already. One of the fastest decarbonising economies in the world in Scotland. We are showing clear leadership in driving that forward. More to do, we need to see more pace in it as well. One, leadership, and two, ambition for the future. Scotland has got very ambitious targets, but we have also got ambitions on how we want to go about achieving net zero in a just and fair way, ensuring that no one and no community is left behind. That is about looking at the development of new technology, whether it be in energy, transport, manufacturing, agriculture, all of those areas, construction, all play a part in it. We want to set ourselves up and demonstrate what we are doing, how we are open to engaging with others and learning from them, sharing our experience and helping to support and encourage others to follow the path that we have taken in terms of decarbonising so far, while at the same time also looking to see how we can attract new businesses and economic opportunities in Scotland through the decarbonising agenda. We want to showcase what we are doing now for ambitions for the future and we want to do that through demonstrating the leadership and the targets that we have set. The other part is that we also need to make sure that those communities whose voices are very often drowned out at these events are heard. There is no doubt in my mind that we need to make sure that some of the promises that were made in the past at Cops by the international community to help to support the global south are just not translating into action, and the risks that are being posed to some of our least-developed countries are just growing by the day. We have a moral responsibility, not just an economic one, an environmental responsibility but a moral responsibility to support them and their system. One of the things that we are doing is doubling our climate justice fund in order to demonstrate leadership in this area, but we want to encourage other countries to do the same. We want to use the opportunity at COP26 to do that. Two key things are leadership and ambition that we want to drive forward and to use during the course of COP about where Scotland is at, what we have been doing and what we want to do in the future. The final brief question that the cabinet secretary will be very glad to hear from Monica Lennon. Yes, I will have to be very brief given the time. Can you tell us how circular economy is going to be embedded across key sectors like energy and agriculture and construction? If I can combine my next question with that one, you will be aware, cabinet secretary, that figures that were published last year showed that waste incinerator capacity has soared 400 per cent the time that your party is being in government. When do you hope to complete the review into the role of incineration in waste management? Will it be your new colleague, Lorna Slater, who leads that work? How are planning applications for new incinerators going to be treated in the meantime? Will we get a moratorium? I think that you have asked me that question before. What I have said to you is that you are right that Lorna Slater is leading that piece of work, and the review will look at the role that incineration has in our waste hierarchy, and it will view that. I would expect in the coming weeks that Lorna will be in a position where she can set out how that review is going to be taken forward in the time frame and the terms that that review will have. The wider issue around the circular economy is a quick question but a big issue. The issue about the circular economy is that it is not just an important contribution to tackling climate change. It is a significant economic opportunity as well in the economic benefits that we can get from developing and expanding the circular economy. Across a whole range of sectors, whether it be in manufacturing and electronics, whether it be in the production of clothes or whether it be in the area of plastics, the circular economy can play a big part in helping to tackle some of those issues. You might be aware of, for example, the campaign that has just been launched by Zero Waste Scotland this week around the whole issue of recycling clothes and trying to re-prioritise the recycling of clothes. Some of the things that we are looking to do is to help to develop and expand that sector, specific interventions that we can take and how we can encourage people to make greater use of clothes to reduce the level of wastage. On electronics and plastics, some of it is about producer responsibility. We are at a point where we are looking at measures that we can take at a statutory level that will place obligations on producers to take responsibility for the waste that is created by their products in order to help to ensure recovery and recycling but also to encourage the longevity of some of those goods as well so that mobile phones should be more than for just the 18 months or the two years of the contract. All it does is it creates a system where votes just constantly keep replacing them and inevitably it causes more waste and also involves extracting more minerals. We need to look at the measures that we can put in place to help to encourage that producer responsibility and we are looking at what statutory measures we can put in place to help to address that. Alongside, we are taking forward measures through our circular economy bill, which we will introduce in Parliament, the early part of Parliament, which will set out some of the legislative measures that we are going to put in place in order to help to support and encourage the circular economy and to do that in a way that not only the environmental benefits but the economic benefits as well, because there are many businesses that I have already engaged with that I know that see real opportunities here if we can get the legislation right as well and we want to make sure that we are going to do that. Thanks very much, Monica. That completes our questions for this session, cabinet secretary. Thank you very much to yourself and to your team for joining us this morning. We will move on to our next item after a short break, which is evidence in relation to a legislative consent memorandum in relation to the UK Environment Bill. We will reconvene shortly. I suspend this session. Welcome back to the public session of this meeting of the Net Zero Energy and Transport Committee. At item 3, we will take evidence again from the cabinet secretary. This evidence session relates to the legislative consent memorandum on the UK Environment Bill. Welcome back, cabinet secretary. I believe that you are joined by colleagues remotely—Charles Stewart-Roper, head of environmental governance and strategy unit and Sophie Humphries, head of environmental principles and governance team at the Scottish Government. Cabinet secretary, I believe that you wish to make a brief opening statement. Thank you, convener. If I can, it would be fair to say that the story of the UK environment bill is very much a play of two acts. In the first act, under the governance of Michael Gove, during his time as Secretary of State for Environment, Food and Rural Affairs, the UK Environment Bill was developed in a manner that broadly respected devolved competence. There was considerable consultation at official and ministerial level, as proposals were considered in each country of the UK to implement national systems of environmental principles, strategy and governance in a large part to replace arrangements at the EU level. We differed in that we had no desire to leave EU arrangements, but the UK Government appeared prepared to respect devolved competence. In particular, it was clear that it would respect this Parliament's responsibilities to put in place arrangements for Scotland. In addition, a number of regulatory provisions were designed that would extend to Scotland in devolved competence, most significantly in the area of waste and resources. Those measures were properly designed with provision for consent to be required from Scottish ministers for any regulations made by UK ministers that extended to Scotland within devolved competence. The Eclir Committee in the last parliamentary session had some concerns about the involvement of this Parliament in the process of consent giving that has been addressed through the new protocol that was developed. The Parliament gave consent to those measures after due consideration and debate. Recently, minor amendments have been made to those provisions to make them more effective and correct omissions. Those are clearly within the terms of the existing consent motion and I shall shortly be writing with details on those. We now turn to the second act of the UK Environment Bill. During this phase, it has been clear that the UK Government is using the bill as a small but significant front in its assault on devolved competence. A key figure in that assault is none other than Michael Gove, in his role as Chancellor of the Duchy of Lancaster. There are two measures of particular concern that have been introduced to the bill through the UK Government amendments that are described in the supplementary legislative consent memorandum that was tabled in July. A UK Government amendment was passed during the House of Commons stage, which proposes to introduce a new due diligence regime for the use of forest risk commodities in commercial activities. Although that is broadly in line with the Scottish Government policy to reduce the overseas impact of its consumption, the proposal was developed without involvement of the Scottish Government and does not recognise that the policy is within devolved environmental competence as it has a clear environmental purpose. A UK Government amendment was passed during consideration of the House of Lords that specifies that the UK policy statement on environmental principles should apply when UK ministers are exercising their reserve functions in relation to Scotland. The amendment also disciplines the duty on UK ministers in our continuity act to have due regard to guiding principles on environment in these circumstances. The Scottish Government considers that the duty in the continuity act can apply to UK ministers in Scotland whether they are making policy that does not relate to a reserved matter or making policy that does relate to a reserved matter. The application of environmental principles has a clear environmental purpose and is therefore within devolved competence. The amendments to the UK Environment Bill on Forest Risk Commodities and Environmental Principles are, in my view, an unwarranted attack on the devolved competence of this Parliament. They run counter to the understanding between administrations as the bill was being developed. It has been understood since the institution of this Parliament that the purpose test was a key test of devolved competence. Both of those amendments cover policies where the purpose is clearly environmental protection and clearly within devolved competence. Since the UK Government is adamant that it does not need legislative consent for those amendments, it is simply pressing ahead without seeking this Parliament's consent. However, convener, I believe that it is important that we do not simply let this pass without comment and that we continue to assert the correct role of this Parliament in areas of devolved competence. I am more than happy to respond to any issues that the committee may have. Thank you very much, cabinet secretary, for those opening remarks. As you indicated, this is a fairly technical area that we are looking at, so the questions will probably be quite brief. The committee does not want to go into too much of the legal interpretation of what the amendments involve. However, if I could turn first to amendment 80, which relates to the guiding principles on the environment, I am looking at paragraph 17. Of the Scottish Government legislative consent memorandum, where there is a statement to say that the UK Government had changed the previously agreed approach with regard to this amendment. I just wanted to check with you what form the previously agreed approach was in. Was it a formal or legally agreed approach for this amendment between the UK Government and the Scottish Government? The discussions around this predate my involvement in this portfolio, so I think that it would probably be Charles Roper, who is probably the best place to explain how it was taken forward between ministers and officials at the early stage in the development of the bill. My understanding was that it was a clear principle that was agreed at an early stage when the bill was proposed by the UK Government. However, Mr Roper can possibly say a bit more about that process. Yes, I would be happy to very briefly note you. There wasn't a formal agreement or memorandum on how these things would be developed. There was just a series of discussions and correspondence at official and ministerial level over a number of months. And it is also, we would say, clear from the manner in which the UK Government consulted on its proposals. Indeed, the nature of its proposals in the bill has introduced, that demonstrates that the intention at that time was to have their principles extending only to England, if it has changed their mind. Hence, it is clear that we think that it is a change of UK policy, since it has to achieve this through amendments, rather than through the bill that it has introduced. Thank you for that. Again, looking at paragraph 15 of the Scottish Government legislative consent memorandum, my understanding is that the UK Government subsequently made it clear that, in reserve matters, the UK guidelines would apply during the passage of the continuity bill. Am I correct in that assumption? Yes, there was correspondence during ministers during the passage of the continuity bill, but ministers did not agree with the interpretation placed on the limits of competence at that time, so pressed ahead with the measures as in the continuity act in order to which we believe correctly reflect devolved competence. Although the UK ministers did make that clear during the passage of our continuity bill, that was subsequent to the introduction of the UK environment bill with the measures as they had designed them at that time. The absence of a formal or legal agreement in place relating to the guiding principles in place, am I right in thinking that the Scottish Government's view is that section 14.2 of the continuity act qualifies, I believe, section 29 of the Scotland act, in terms of making powers that would otherwise be reserved. Section 14.2 of the continuity act moves those powers from being reserved under the Scotland act to a devolved competence as a result of the continuity act. No. As I think this is clear in the supplementary memorandum, we think that the measures in the continuity act, as they apply both to UK ministers acting in reserved areas and acting in areas that are not reserved, we think that those powers are within devolved competence under the Scotland act. Our interpretation of the Scotland act is that everything in the continuity act that has passed should be regarded as within devolved competence because it has a clear environmental purpose. Obviously, the UK Government has decided that they do not agree with that and are taking measures through their amendments to impose their interpretation, but our interpretation was not that those measures shifted the balance of devolved and reserved but that they were clearly within reserved competence. I am not clear from that response. You cut out slightly there, but I am making the point that, as I understand it, the UK environmental act deals with matters that are reserved. Certainly, from the Scottish Government LCM paper, it suggests that that changes as a result of the passage of the continuity act. I am trying to understand what the legal rationale behind the impact of the continuity act is on this issue. Okay, just to draw an analogy, if I may, nobody denies that defence is a reserved policy area, but when the Ministry of Defence wants to extract water from Scottish environments, they apply for permits. The primary concern when you are extracting water is environmental concern and the purpose of controlling the water environment is environmental purpose. Our argument is that the environmental principles have a clear environmental purpose. Although the policies that they would be applying to are clearly reserved areas, the environmental purpose of the environmental principles means that the principles that should apply to the UK Government when making law and reserved areas in Scotland should be our set of devolved environment that is devolved competence, regardless of the fact that the decision that is being made is reserved competence. Ms Powell, the MP who is also the parliamentary undersecretary of state for the Department of Environment, Food and Rural Affairs, wrote in a letter to MPs on 10 November 2020 that those proposals were, I quote, legislation to protect rainforests. The purpose was environmental, not business regulation. Cabinet Secretary, you are referring to clause 107 with regard to the due diligence required by business, which I will come on to later. I am referring to the principle purpose of the legislation. The purpose of the legislation was to protect rainforests in the purpose of those measures. I understand, but if your legal argument is based on a letter, I am not convinced by that with respect. You do not take the word of a Government minister on the matter in a letter to MPs as being a good source of evidence. Well, rainforests can be open to interpretation. I do not think that we should be picking out one word in a letter, which I am sure there are many letters. I am picking out three words, legislation to protect rainforests. Letter from the minister and legislation to MPs. I do not know what is unclear about that. Well, what is unclear is that we are hearing that this is precisely an area of reserved powers. That is what your colleague just mentioned. I am repeating what your colleague said. Those are powers that are in, I quote, reserved areas. Business regulation is reserved, but the purpose for which it is is a devolved area. We are talking about amendment 80, which deals with the guiding principles. Business regulation is dealt with in clause 107 of the bill, so I think that you are confusing your amendments. Sorry, I was not aware that you were referring to the second clause in terms of the general principles. Well, if you were listening, you perhaps would have. But the principle of this bill is environmental. I appreciate that, cabinet secretary, but you are mixing up your amendments. That is all the questions that I have on amendment 80. We will come on to clause 107, the other amendment in question. Do any other members have questions in Mark Ruskell? I have got questions about the whole thing, really, but I can ask you, cabinet secretary, was the Scottish Government in the process of developing a due diligence set of measures in relation to forest risk commodities last year when this was under development? Again, it predates me, so I would have to ask Mr Roper if he can, or if it would be Ms Humphreys that would be able to respond to that issue. I am just interested to know if this is an area of active work that the Scottish Government was under way from a policy perspective. The approach is consistent with our policy and it is to reduce the importation of forest risk products and to take forward measures that will reduce the potential for that to happen and to make sure that businesses are being mindful of the need to ensure that they are not importing forest risk products. I do not know if Mr Roper wanted to add anything to that. If you want me to come in now, we have clear policies about reducing the global impact of consumption in Scotland. We were not developing specific policies on forest risk commodities of this type. Given the nature of regulations of this type, like with some other regulations, it may have been that a co-ordinated approach would have been desirable. However, we strongly contend that the UK Government should not be legislating in this area without consent, since it very much is clearly a regulation of business for an environmental purpose. You know that this is an area of European policy development. The European Commission is coming out with a proposal for a directive on sustainable corporate governance this month or next month. I am just wondering why there is not co-ordination, why there is not a common framework on this area, or indeed many other areas of policy. Has there been a conversation here about this issue, knowing that, as both Governments do, this is an area where the European Commission is obviously looking to make progress, and it is in line with your policy. It is what the UK Government wants to move on. It seems that between the two Governments and the European Commission, there is a need for co-ordinated progress here. Why is there a breakdown in communication? Is it the microphones? I am afraid that that is a much more general question about corporate governance and corporate responsibility. In terms of this particular policy, on forest risk commodities, the UK Government just went ahead and developed this policy without proper involvement of the Scottish Government. I agree that there are wider issues there, but I do not think that I have the information hand to comment on those wider policy developments. I mean a point here. Has there been an attempt to engage the UK Government in this area of substantive policy in the past? What was the reaction to that? Why are we now looking at a policy coming from the UK Government without any involvement of the Scottish Government? Again, I do not have that information to hand, but we could certainly, if the cabinet secretary wishes, write on that particular point to give him more information about the wider policy context of discussions on corporate responsibility. I will hand over to Fiona Hyslop in a second. Cabinet Secretary, I wanted to follow up on a comment that you made in relation to Clause 107. You said that it was in relation to the importing of forest risk commodities, which it says, on the face of the legislation. Are you saying that those amendments will only relate to the import of such commodities? That is a primary purpose. Their objective is to reduce the risk or the importation of these goods. That is based on the Global Resources Initiative recommendations, which I believe both the Scottish Government and the UK Government support. It is based on the principle of reducing the environmental risk to, in particular, rainforests associated with forest risk products. Technically, we have rainforests in Scotland, but rainforests are in the sense of rainforest worldwide to promote sustainable international trade. The purpose is to reduce the risk of the importation of forest products that are from rainforest-based woodlands for environmental purposes, because the environmental risk at that poses. If the purpose of which it sounds today is largely to control trade with other countries and impose certain conditions and due diligence requirements on trade from other countries, does that not sound like a trade issue that generally speaking is reserved? From the discussions that we had with the UK Government, that was not their view, that was not their argument. The UK Government thinks that that is a devolved issue? No, their argument was that that was to protect rainforests. Right. As part of the Global Resources Initiative, which is an international agreement. We can try and dance ahead of opinions for as long as you like, all afternoon if you wish, but the UK Government ministers are very clear in the correspondence that they have made to MPs what the primary purpose of the legislation is for. I quote legislation to protect rainforests, not legislation to promote trade or to reduce trade between one country or another or to deal with trade issues, not legislation to deal with better business regulation or to remove business regulation in particular areas. Quite clearly, legislation to protect rainforests. Right, but you know that this is based on the Global Resources Initiative, which is about international sustainable trade. You refer to this largely being or exclusively about imports. That sounds to me like a reserved matter. If you are trying to find a boat hole to help your colleagues down in Westminster basically running roughshod over the pillars of this Parliament, then that is your choice. I am trying to help you with your own analysis, cabinet secretary. I am setting out very clearly what the UK Government's position is, and the UK Government's position is that it is a piece of legislation that is to protect rainforests. Right, whereas your position is that it sounds like a trade, international trade provision. Your position is? I refer you to the record that you mentioned trade with international trade quite a few times in your response. This will no doubt be settled with lawyers in the room. Some of us are lawyers, some of us are not. That is all that I have for the time being. I believe that Fiona Hyslop has a question. Of course, our responsibility is to determine on legislative consent and what our report is going to be to the chamber and the rest of Parliament on this. I think that there are two separate issues here. One is about the environment bill itself and the issues around the guiding principles that have been introduced. I was very struck by paragraph 24, in reference to the original consultation on the environmental legislation by the UK Government, in which I quote, "... our starting point is that the statutory statement of environmental principles and the environmental body should cover England and environmental matters that are not devolved. Therefore, the consultation relates only to areas for which the UK Government is responsible." That was the original consultation. Clearly, in your characterisation of that being a bill of two halves or two acts, what has happened now is that there is an attempt to try and apply UK principles on the environment to UK bodies that are reserved, and everybody acknowledges that they are reserved, but when they are acting for a purpose in Scotland. It is for acting for a purpose and impact in Scotland, which is the primary issue here, if I am correct. Therefore, the issue around an obvious reserved organisation, Her Majesty's Forces, for example, is something that affects water, discharge or whatever. That one might be a bit more obvious in terms of the relation between devolved and reserved areas, and it will come down to an interpretation of purpose and impact to name. The second one, and I want you to comment whether you agree with what I am saying and whether it is a logic that can follow here. The second one really is about something that we all agree with. We all have responsibility for international environment, whether it is at the nation state level or devolved competence. The actual attempt purpose of what they are trying to do, I think that everybody would agree in policy terms, but the issue is responsibility for that. Again, it is the issue about environmental standards, which are obviously a devolved area, and it is an international trade or international treaty aspect, or do you actually see it the main purpose being about environmental standards as operated by businesses operating in Scotland? I think that there are different aspects that this can be looked at. I suspect that, as many of those things are, it is which side of the lens, or which side of the telescope you want to look at on this. That may be determined in other areas, but is that a reasonable characterisation of what we have got in front of us? It is. On your first aspect of that, the important issue around the environmental principle is that it could involve applying a UK-based organisation, applying the UK Government's environmental principle, which is contrary to the position that we have in Scotland on the matter, for environmental reasons, which effectively means that the UK Government is trumping our own environmental principles here in Scotland in order to enforce their position, even though that might go against our environmental principle, which could result in a negative consequence for us. That is where our view is that this is wrong, and this is a devolved matter, and that UK bodies should be applying the Scottish Government's and the Scottish Parliament's agreed environmental principle. On your second point, I think that the idea that a piece of legislation that is principal purpose is to help to protect the rainforest in some way is turned into this is really about trade, is not it? It is frankly just nonsense. The primary purpose is environmental. That is the primary purpose. That has been a long-standing position between the Scottish Parliament and the UK Government. The primary purpose is the starting point, and that is clearly an environmental one. Anything else is secondary to it. Again, that is the principle that, in this case, is being breached by the UK Government in choosing to legislate in an area that is within devolved competence because of its primary purpose. I am not seeing indication of any more questions. That brings an end to this session. Cabinet Secretary, thank you again for appearing before the committee this morning, and we will now move on to private discussion in private session.