Seòmar agus comataidhean

There is probably no part of the public sector that has not felt the consequences of a really challenging budget settlement that has been eroded by stubbornly high inflation and affected by the cost of living. It comes from a block grant from which it is really difficult to deliver everything.

One of the steers that I gave our enterprise agencies two years ago, and which I am absolutely delighted to see them delivering, was for there to be greater clarity on and prioritisation of where they can add value. That is what they are doing.

We are nothing short of delighted with the engagement that Sumitomo has had with Highlands and Islands Enterprise. HIE knows exactly what it is about, although I am sure that it would be easier if it had a larger budget settlement, but it is absolutely clear on what it is doing. It is able to draw in investment through targeted interventions and building relationships.

The same goes for Scottish Enterprise, which I met last week. It has done a lot of work on being clear about what it is trying to achieve and where it can add value. My ask of any public body is to make sure that it knows what it is trying to do and that it does it well.

That is the question of our day—it is probably the most critically important question for us all to be trying to answer, because we have seen how that can be done badly. I represent the Highlands, which has for decades been subject to boom and bust activity that has left no legacy. What is interesting is that the area is now starting to boom again. Kishorn, for example, is remote, rural and struggling with depopulation, but it is levelling up—to quote a phrase—because it is at the forefront of decommissioning. That is hugely exciting, but Kishorn was, equally, at the forefront of activity during the oil and gas boom. We cannot allow it to go through another bust cycle again; there has to be a consistent legacy. That requires us to focus on communities and the supply chain.

Communities need work. They also have to have a stake in the economic activity in their area, and they need to see the benefits of it. I am worried about situations developing in which industrialisation is going on and communities are on the periphery with no stake, no engagement and no recognition. That cannot be allowed to happen.

At the moment, I am engaged in work in my constituency around the legacy on housing. I know that this is going back into history. People are still living in the houses that were built in connection with hydro power development in the 1950s and 1960s. We know how challenging the housing issue is, so any economic activity that comes into a community needs to leave a legacy of good housing.

There must also be a legacy in education, which involves work in the schools, and, to be blunt, there needs to be a legacy related to the cost of living because, if all of this energy-related work is going on around people who pay horrendously high energy bills, there is something morally wrong that none of us should tolerate.

Your next question will concern how we can ensure that those legacies exist, but I will stop talking just now and let you come in.

There has to be evidence. I know that we disagree about the green freeport in Cromarty, but it is a good example of what we are talking about, so I hope that you will permit me to talk about it. It has a target of achieving several billion pounds in investment, which translates to thousands of jobs. Therefore, I believe that there should be an expectation that thousands of houses will be built in that area. I believe that that is the evidence that communities want in relation to housing.

Retrofit is one of the ways to go, but we must also add to supply. Our approach is not just about retrofitting old and cold homes; it is also about building more homes—that is the evidence base that people will see. We can talk about how the approach is succeeding, but communities will only believe it when they see bricks and mortar, and when they see the creation of secure and well-paid employment.

The report that you mentioned generated headlines that referenced “apocalyptic” conditions for the industry. That is not the just transition that we believe in. We stand squarely behind the industry as it seeks to transition.

On our policy objectives, we will not do anything that risks 100,000 jobs, as others propose to do. We just will not do it. We have long talked of the just transition. There are two words in that phrase. First, it must be just: it must support people and workers and it cannot leave people behind. Also, it is a transition. We have never proposed to turn the taps off or to apply other policies that threaten the existence of an industry that is key to the north-east.

Your question was about how we can rebuild confidence. We can do so in a number of ways. First, we can do it by ensuring that there is clarity in our objectives, aims and policies. That means working with the industry and walking with it as it invests in green industry. However, that is a process: it is about looking at planning and consenting.

As you know, the most important levers are not within our control. We have never disagreed that there should be a proportionate windfall tax, but when it poses a risk to 100,000 jobs, that is a problem. Those levers are obviously with the UK Government, but we want to work constructively, stand for Scottish industry and jobs and make it clear when policies threaten those jobs.

Okay.

I have obviously not been around for the past two years, but on the progress that has been made, I absolutely refute the notion that there is a delivery gap. Scotland’s productivity has grown at an average annual rate of 1 per cent, compared with the UK average of 0.4 per cent. You cannot dispute those figures—they are from the Office for National Statistics.

NSET is our north star. It is clear about how we improve our economic factors according to the international average. That remains our focus, and I think that there is a lot to celebrate in the Scottish economy. I do not propose to do much more writing; I propose to do as much delivery and implementation as possible.

I would be really concerned if we reduced the NSET to just one budget line—

I always engage constructively with Audit Scotland reports. I find them very useful in terms of highlighting where more progress needs to be made—that includes the relevant report. My problem is with your question and not with the Audit Scotland report.

As I said, Audit Scotland often shines a light on different areas in which we need to make more progress. However, I disagree fundamentally with your proposition that you should reduce NSET to a budget line.

We are committed to that, but when our budget is determined by another Government deciding how much money to give us, and in what form, there is a ceiling to the assurances that we can give. We can give an assurance that the bank is a priority, that we are really proud of it, that it has an important role to play and that we will do our level best to protect it. Ultimately, however, the funding comes from a budget that is determined by another Government.

There are examples of the Scottish National Investment Bank joining forces with others. For example, an investment of £100 million in the regeneration of Ardersier port was announced a couple of weeks ago. That was done in collaboration, with the bank and the UK Government each providing £50 million to create that £100 million package. Those opportunities for collaboration are also important.