Seòmar agus comataidhean

Good morning. I congratulate Adrian Gillespie on his recent appointment.

I want to ask about supply chain resilience. In Scottish Enterprise’s submission, you highlight your work in increasing the personal protective equipment supply chain, which was really significant. I am interested in what you are going to do in other areas. Specifically, you will be familiar with the recent decision by the UK Government in relation to Valneva and the significant promise of investment in that area. I do not expect you to comment on the rationale or the inconsistency of the UK Government’s decision making on that, but it is a major global opportunity for life sciences investment. I am interested to hear what you are doing to support the business minister in his engagement with the company, and I would like to hear about Scottish Enterprise’s wider work in supply chain development and resilience.

I would also like Malcolm Roughead to comment on supply chain resilience for the tourism sector. There is a great deal of pressure on the sector, so please give us some initial comments and tell us what might help to mitigate some of the pressure, bearing it in mind that some issues might be outwith the control of VisitScotland, for example.

I suspect that the committee might want to hear more about supply chain development more widely, but we might not have time for that today. I am sure that we can follow up with Scottish Enterprise to get more detail on what you have gone through, which sounds very promising. Malcolm Roughead, do you want to comment from the tourism industry’s point of view?

It is good to see you all. I want to ask about the transition to net zero, and to get your insights on what your sense is of the position of SMEs generally—I am not necessarily talking about those that you work with in relation to grants—in relation to that transition, from their point of view as businesses but also from the point of view of their products and services. What are you doing or planning to do to help to support the wider SME community with that transition? How do you think that the transition to net zero can be financed, bearing in mind that many SMEs are carrying Covid debt, which means that it is a big challenge?

I know that that is a big question and that we can cover only so much today, but I would be interested to hear your perspectives.

When it comes to the things that businesses have to do for their own heating, transport and so on, how might those be financed?

I am not necessarily expecting either organisation to resolve the issue; I am simply seeking your insights, given that you work with many different businesses in addition to those that you give grants to.

Jane, could you give us a sense of that wider perspective?

I am very conscious of time, but we might want to come back to the agencies at some point about those issues.

That was very insightful. In relation to energy and what you said about skills, the just transition fund will need to support people who want to transition from high carbon-based industries to the renewables sector. Does that not give greater impetus to the need to support the transfer of skills? We talk about dual fuel, but now we need dual energy skills. It is not yet clear who is responsible for allowing the certification for the skills of those who work on North Sea developments to be transferred to renewables. Although everybody says that skills passports are needed, I am not sure who owns or is driving that process. Having reflected on your answer to my first question, I think that it is imperative that we take ownership of that process and drive it forward.

That is clear.

My other question is about the UK Government’s changes relating to contracts for difference and supply chain development, particularly how they will affect our domestic supply chain. What is your view of the proposals? What impact might they have on the ScotWind leases, for example? Is there any way in which we can quantify what the impact might be?

Of course, our responsibility is to make a determination on legislative consent, which is what our report to the chamber and the Parliament will be.

There are two separate issues here, one of which is about the Environment Bill itself and the issues around the guiding principles that have been introduced. I was struck by the reference in paragraph 24 of paper 3 to the original UK Government consultation on the environmental legislation, which said:

“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. This consultation therefore relates only to areas for which the UK government is responsible.”

Clearly, in the characterisation of it being a bill of two halves—or a play in two acts, as Michael Matheson said—there has been an attempt to apply UK principles on the environment to reserved UK bodies, which everyone acknowledges as reserved, when they act for a purpose in Scotland. If I am correct, the primary issue is about bodies acting for a purpose and impact in Scotland: for example, when an obviously reserved organisation, such as Her Majesty’s forces, does something that affects, for example, water discharge. The relationship between devolved and reserved areas might be more obvious in that example, but it will come down to an interpretation of purpose, impact and aim. I want you to comment on whether you agree with what I am saying and whether you follow the logic.

The second issue is about something that we all agree with, which is that we all have responsibility for the international environment, whether at nation state level or as a devolved competence. In policy terms, I think that everybody would agree with the purpose of what the bill is attempting to do, but the issue is who has responsibility for the area in question. Again, the issue of environmental standards is obviously a devolved area, but do we interpret that as having an international trade or treaty aspect, or do we see the main purpose being about environmental standards for businesses that operate in Scotland? It can be looked at from different aspects, and I suspect that, like many of those things, it is about which side of the lens or which end of the telescope we want to look at it from. That might be determined in other areas, but is that a reasonable characterisation of what we have in front of us?

What will Scotland’s message be at COP? What will be our indicative nationally determined contribution? We have heard that the just transition is specific to Scotland but that it is resonant internationally. What will be unique in Scotland’s message and contribution to COP?