Green Economy

– in the Scottish Parliament at on 24 January 2024.

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Photo of Annabelle Ewing Annabelle Ewing Scottish National Party

The next item of business is a debate on motion S6M-11945, in the name of Neil Gray, on investing in Scotland’s green economy. I invite members who wish to speak in the debate to press their request-to-speak buttons.

Photo of Neil Gray Neil Gray Scottish National Party

The transition to net zero will transform the global economy. For us, in Scotland, it presents enormous economic opportunities together with benefits for our people, businesses and communities. Economic transformation is also essential to delivering on our wider net zero ambitions, and we must manage it in a way that is fair and just. To realise those opportunities and to avoid the terrible harms that will come if we fail to make the necessary just transition, we must invest. We must invest in our future today or bear the consequences in harms and higher costs later. That is what the motion that we are debating is about.

I will start by looking at how things stand today. Scotland’s green economy already has momentum. The latest PWC “Green Jobs Barometer” report shows that Scotland is leading the way in delivering a green jobs revolution and unlocking the tremendous potential that our energy transition and wider net zero journey holds. According to the Fraser of Allander Institute, more than 42,000 full-time equivalent jobs were already supported by Scotland’s renewable energy sector in 2021, and we have businesses that are competing globally in growing markets, creating high-value jobs, innovating, and repurposing supply chain strengths and capability. In other words, we are already building the foundations for a thriving green economy. Scottish firms have the chance to sell to the world and create good, well-paid jobs as part of a fair, green and growing wellbeing economy.

An example is the ScotWind project, where it is projected that developers will invest an average of £1.5 billion per project into the Scottish supply chain. The recent climate emergency skills action plan report by Skills Development Scotland identifies almost £90 billion-worth of green investments that are under way or planned to commence in the next three years.

We know that the scale of change that is needed is significant. Delivering on our net zero target by 2045 will require the transformation of our economy and society, underpinned by sustained public and private investment in physical infrastructure. If we do not invest now, we will pay for it later.

Photo of Fergus Ewing Fergus Ewing Scottish National Party

I agree with all that the cabinet secretary has said. Does he agree that, in order to maximise the efficacy of the opportunities in the green economy, we must continue to support a thriving oil and gas sector, not least because the companies in it make very substantial investment in renewables from their resources and through the work that they do? Does he agree that, if we shut them down prematurely, we would lose the very skills that are required to operate, manage and run reservoirs in the North Sea—which, arguably, has the most difficult conditions around Britain—and make the realisation of our green ambitions more difficult?

Photo of Neil Gray Neil Gray Scottish National Party

I agree with much of that. The traditional oil and gas energy companies will be putting private investment, which we need, into the renewables sector. I absolutely value the oil and gas sector’s workforce, which has delivered so much for Scotland. I hope that we can see a just transition for the sector’s workforce into the green economy. The First Minister and I delivered that message to the Offshore Energies UK round-table discussion that we held last week.

Photo of Neil Gray Neil Gray Scottish National Party

I am mindful of the time, but I will take one further intervention.

Photo of Douglas Lumsden Douglas Lumsden Conservative

Does the cabinet secretary agree that cutting the just transition fund by 75 per cent is detrimental to reaching net zero?

Photo of Neil Gray Neil Gray Scottish National Party

The investments and the choices that we have had to make in the budget are a direct consequence of the choices and underinvestment that have come from UK Government policy making and that we are debating today. The reduction in our resource budget and our capital budget have an impact. It is therefore a bit rich for a Tory MSP to come here and moan about the impact of the austerity that his party is delivering at Westminster, which is having a direct impact on our budget in Scotland.

Alongside our commitment to realising economic growth, the Scottish Government is committed to a just and fair transition to net zero for Scotland’s economy. We stand behind our ambition to make Scotland more prosperous, and that goes hand in hand with making Scotland fairer. We will make sure that the transition is planned and fair so that we can meet our ambitious climate obligations and secure economic growth in a way that leaves no one behind.

The publication of our upcoming energy strategy and just transition plan will respond to feedback from the consultation last year. It will set a clear direction for the future of Scotland’s energy sector and the actions that will be taken to maximise the economic and social benefits from our just transition to net zero.

We are fully committed to the delivery of a credible plan that provides policy certainty for consumers, workers, businesses and investors. We have strengths and potential in sectors ranging from offshore and onshore wind to financial and professional services and advanced manufacturing. It was a pleasure for me to see that work in hand at the National Manufacturing Institute Scotland this morning. It is driving the manufacturing innovation that will help us with our green economy ambitions.

There is a vital role for public sector investment in supporting the transition to net zero, especially in important parts of the green economy that are emerging but are not yet established and which need our support to become commercially viable investment opportunities. However, investment on the scale that is required to achieve our ambitions will require funding from both the public and private sectors. We are working hard to attract private sector investment where commercial opportunities arise, and we are targeting our investment in a way that aims to unlock that private investment. We are working collaboratively with industry to address the challenges that can sometimes hold private investment back. Together, we are supporting Scotland’s companies, equipping workers with the skills and opportunities to access good green jobs, and exploring opportunities to boost international exports in sectors where we have a competitive advantage.

This summer, our green industrial strategy will set out our approach to working with business, investors and workers to realise the economic opportunities of the global transition to net zero. The strategy will offer a clear view of the economic sectors and industries in which we have the greatest strength and potential and what the Government will do to support those and help to give the private sector confidence to make decisions and invest in Scotland. The strategy will signal that we are serious about capturing for Scotland the economic benefits of the global transition to net zero.

I will give one example of our approach to investment in the green economy in action. The First Minister’s investor panel identified offshore wind as the single most important opportunity for attracting capital to Scotland and raising Scotland’s wider investment profile. It has become clear that the next two to three years are critical to anchoring core parts of the global sector in Scotland, with further investment required beyond that.

We have already had significant investment in Scotland’s offshore energy potential through the leasing rounds of ScotWind, which is a fantastic example of a team Scotland approach to delivering significant projects. To underpin delivery of that, we have worked with public sector partners to develop a framework that will achieve strategic alignment of public sector investment in offshore renewable supply chain and infrastructure development to ensure maximum impact. That very much aligns with the approach that has been taken in developing the strategic investment model to move from project to sector-level investment that better supports growth in port and supply chain capacity and capability. A strong pipeline of port infrastructure and supply chain projects is now emerging through the strategic investment model process.

That example highlights the huge opportunity for collaboration and demonstrates that there is a strong appetite from partners to take a strategic approach to the delivery of infrastructure and port investment. We are backing up that collaborative approach with funding, which will be targeted to achieve the maximum impact. In the face of challenging budget decisions, we chose to focus the limited resources that we have in 2024-25 on the huge opportunity that offshore wind presents for Scotland. That includes investing £67 million to kick-start our commitment of up to £500 million to anchor the new offshore wind supply chain in Scotland.

Photo of Neil Gray Neil Gray Scottish National Party

I will come back to Mr Whittle later if time allows.

That strategic public investment in offshore wind will catalyse private investment in the infrastructure and manufacturing facilities that are critical to the growth of the sector and will contribute to a productive and competitive economy. It will also support market certainty, helping to create thousands of new jobs, embedding innovation and boosting skills. In short, it is an example of the power of strategic public investment in the green economy in action.

We must, however, be transparent in recognising that our powers to invest in that way are limited by devolution. We do not have the powers to borrow to invest that independent countries enjoy. I would like to have invested more in our offshore wind sector in the draft budget and to have put more money into other sectors, such as hydrogen, but we are constrained by the United Kingdom Government’s actions and inaction.

The UK Government did not inflation-proof its capital budget, which we forecast will result in a near 10 per cent real-terms cut to our capital funding over the next five years.

Photo of Neil Gray Neil Gray Scottish National Party

I will come back to the member later if time allows.

We need urgent action from the UK Government to buy in to meeting our net zero targets and securing the vast economic opportunities of the green economy. We have reached the point where there can be no further delay in that action from the UK Government. Market certainty is key. We need the UK Government to work with us to create a stable policy and regulatory environment and to deliver a well-managed transition that ultimately improves investor confidence that investing in the green economy is a worthwhile investment that delivers its economic potential.

The unprecedented announcement that the UK Government made last year to renege on its net zero commitments, including the roll-back of policies that were already announced and accounted for, has repercussions. Changing those timelines undermines our commitment to growing the green economy, securing private sector investment and, of course, our net zero transition, but it also knocks investor confidence. We need clarity to support long-term investment opportunities in Scotland as we transition to a green economy. Although we are doing what we can to provide that investor certainty, as is evidenced by the likes of the onshore wind sector deal, the lack of clarity and the uncertainty and barriers to investment are undermining our progress.

Alongside inaction and U-turns, we see a lack of recognition in Westminster of the global context in which we compete. We are deeply concerned by the UK Government’s failure to recognise and keep pace with the level of capital investment that is required to deliver a just transition to net zero. Around the world, we see Governments stepping in to invest in the green economy at scale through things such as the Inflation Reduction Act of 2022 in the US and the European green deal. Those ambitious packages are designed to drive investment in net zero technologies and the transition, and that funding and spending will shape future markets in which Scotland competes.

UK investment levels stand in stark contrast to those initiatives, and that position, sadly, looks unlikely to change regardless of whether it is Rishi Sunak or Keir Starmer in Downing Street after the election. Labour once pledged that it would invest an additional £28 billion a year. That was to be its bold response to the US Inflation Reduction Act, but barely a week goes by without that pledge being watered down. First the target date was delayed, and then Labour quietly dropped the word “additional”. Now, it is not a commitment but merely an aspiration, and one that is unlikely to make it to polling day.

We must see bolder, braver interventions in this space from the next UK Government to ensure that we are competitive for private capital. Given how competitive the landscape is and how quickly decisions are being taken, we might, arguably, have already missed opportunities. We cannot afford to wait any longer; we need action now.

Where does that leave us? Scotland must seize the opportunities that are presented by the global transition to net zero now, or risk missing out. We can meet our ambitious emissions reduction targets only with transformational action across our society and economy. However, without UK action, we cannot achieve our goals. Inaction at the UK level limits what we can do in Scotland. We call on the UK Government to recognise the scale of the challenge and the scale of the opportunity, and to invest appropriately. We call on it to recognise that one role of Government in this era-defining transformation is to create market certainty and to stay the course with the right policy choices; to recognise that, under the current devolution settlement, the UK Government holds many of the levers that are needed to make the transition work; and to use those levers correctly.

Our ambition in this Government and in Scotland is to build a fair and growing green economy, and we will deploy all the tools and levers that we have in the service of that ambition. We call on all the parties at Westminster to join us in that endeavour, and we call on members of this Parliament to recognise and support the motion.

I move,

That the Parliament considers that a just transition is vital to both tackling the climate emergency and building a strong and sustainable economy; welcomes the growing strength of Scotland’s green economy, with more than 42,000 FTE jobs supported by Scotland’s renewable energy sector, and the recent Climate Emergency Skills Action Plan report that identified almost £90 billion of green investments currently underway or planned to commence in the next three years; agrees that the energy transition and associated supply chain development has the potential to help grow a fair, green wellbeing economy in Scotland; recognises the vital role of public investment in continuing to deliver a just transition to net zero and that the forthcoming Green Industrial Strategy will identify and focus action on the most significant economic opportunities for Scotland; is deeply concerned by the UK Government’s failure to keep pace, with overall capital investment levels in decline; understands that declining levels of investment in the UK are in stark contrast to initiatives to increase public investment elsewhere, such as the Inflation Reduction Act in the USA and the European Green Deal; recognises the limits that this lack of action at the UK level imposes on Scotland, and that in spite of this, £2.7 billion will be invested by the Scottish Government in activities that will have a positive impact on the delivery of its climate change goals in 2024-25; notes that the Climate Change Committee has estimated that 1-2% of GDP needs to be invested in the transition annually until 2050, and calls, therefore, on the UK Government to urgently increase green investment to at least £28 billion a year to ensure that Scotland and the rest of the UK can deliver a just transition to net zero.

Photo of Douglas Lumsden Douglas Lumsden Conservative

This is an important debate to shine a light on our move towards a more green economy and on how the Scottish Government should be doing more to support the industries that are contributing so much to achieving that goal.

Economic growth is key to ensuring the health and wellbeing of the people of Scotland. We must move forward by building our economy and encouraging entrepreneurship to drive industry and deliver growth. It is only through economic growth that our country can grow and we can deliver the public services that we all rely on.

However, we know that the Scottish Green Party members of this Government are fundamentally opposed to economic growth. They would put a stop to key industries in Scotland, such as our oil and gas sector, and they have stopped green energy sources such as nuclear energy being established in Scotland.

If we are to truly have a just transition and build our economy on a green footing, we must be able to explore options such as nuclear energy and green hydrogen. Scotland is falling behind when it comes to new technologies, and it is as a direct result of policies from this devolved coalition Government that we are seeing Scotland’s economy grow at a slower rate than that of the rest of the UK.

Photo of Patrick Harvie Patrick Harvie Green

Douglas Lumsden knows—or at least he should do—that Greens, like the whole Scottish Government, are extremely enthusiastic about the potential for green hydrogen. On nuclear, is he aware of reports just this week of yet more cost overrun and delay on the Hinkley development that the UK Government is proposing? That development, however expensive it ends up being to build, will rely on an incredibly expensive price for the electricity that it will produce. It is slow and costly, and it locks in high energy prices.

Photo of Douglas Lumsden Douglas Lumsden Conservative

I will come back later in my speech to the commitment on hydrogen and to how much the Scottish Government is cutting that.

Regarding nuclear, the costs have gone up, but so has the cost for offshore wind. We can see from the contract for difference round 6 that the price for wind has increased quite dramatically.

The most recent Scottish National Party budget was undoubtedly anti-growth, with cuts being made to vital industries—

Photo of Douglas Lumsden Douglas Lumsden Conservative

I will make some progress first.

C uts are being made to vital industries that are leading in the areas of green economic growth, and the budget also makes Scotland the highest-taxed part of the UK, with that gap set to become wider. By stymieing investment and cutting funding, this Government is moving backwards when we should be moving forward. It is making life more difficult for business leaders, communities and individuals with higher taxes, lower investment and cuts to public services.

Photo of Douglas Lumsden Douglas Lumsden Conservative

I will continue a little further.

Those cuts will affect our ability to grow the economy and make the transition to a greener future more difficult because, although the SNP-Green coalition speaks highly of its green credentials, the reality is very different.

In November last year, Scotland’s Cabinet Secretary for Transport, Infrastructure and Connectivity postponed the publication of the draft climate change plan. To date, the Scottish Government has failed to achieve eight out of 12 of its emissions targets. Scotland is not delivering on key milestones such as energy efficiency in homes and peatland restoration.

In the Scottish Government budget, there is no commitment to green policies or economic growth; instead, we see cuts on cuts on cuts. The transport, net zero and just transition budget has been cut; the total rail services budget has been cut; the just transition fund has been cut; support for sustainable travel has been cut; the energy efficiency and decarbonisation budget has been cut; funding for Skills Development Scotland has been cut; and hydrogen support has been cut.

Photo of Michelle Thomson Michelle Thomson Scottish National Party

I remind Douglas Lumsden that, with regard to capital expenditure, the Scottish Fiscal Commission projects a 20 per cent cut from the UK Government to the Scottish Government. It is that vital capital that is important to grow the sector. Is he aware of that figure, and does he support that cut?

Photo of Douglas Lumsden Douglas Lumsden Conservative

Let us look at the budget that Michelle Thomson is asking me about.

If we look at the Scottish Parliament information centre report, which is available for all members to see, and we look at the resource and capital budget together, we can actually see a 2.8 per cent real increase. It is where this Government has chosen to make political decisions that we see the cuts coming though.

All those areas contribute to achieving greener economic growth, and all of them have been cut, which shows that the priorities of this Government lie not in the wellbeing and prosperity of the Scottish people but in ensuring the wellbeing of its coalition party in Government.

Being from the north-east, I know how important the oil and gas industry is to the economic wellbeing of the whole of Scotland. The whole industry wants to be greener and wants to transition but to do so in a way that protects jobs, communities and the economy of the north-east.

However, the SNP-Green Government is driving energy businesses away, just at the very time that we need it to invest in our energy transition.

Photo of Douglas Lumsden Douglas Lumsden Conservative

I hear “nonsense” from the cabinet secretary, but today’s issue of

The Press and Journal reported that “Big names” are due to join the

North Sea exodus this year”, with Apache, ExxonMobil and Dana Petroleum tipped as exit candidates. That is bad news for not just the north-east economy but the Scottish economy. This Government is making those companies feel as welcome as a hole in a lifeboat.

That is demonstrated by the letter from the chief executive of Ithaca to the First Minister, in which he spoke about the £8 billion investment in Rosebank and the contribution to the “whole Scottish economy”, as well as his disappointment that no Scottish minister welcomed the jobs that would be supported. He went on to say:

“Without support for oil and gas, our human capital and supply chain will be lost to the booming energy sector opportunities overseas thereby slowing down the energy transition”, which is a point that Fergus Ewing has made.

So much for the new deal for business—and it is telling that no one from the energy industry was invited on to the group. The SNP is turning its back on the north-east again and again and showing that it simply cannot be trusted.

We also know how important nuclear power is to the green agenda, by creating energy in a clean and sustainable way. Nuclear energy currently provides around 15 per cent of the UK’s energy needs, but that proportion has fallen since the 1990s, when it was closer to 25 per cent. We must be much more open to discussing with the industry the place of nuclear alongside renewable energy to meet our energy needs. We are all agreed that we need to be less reliant on oil and gas, but the Scottish Government has ruled out a key source of energy that could contribute to that picture. We believe that that is a short-sighted decision that will adversely affect the ability of Scotland to take its place as a leader within the UK in clean and low carbon energy production. Renewables are great, but they are not enough to meet our changing energy needs.

Of course, when we look at green economic growth, we must also consider many of the fantastic smaller-scale businesses that have grown up in the sector. Green growth is now a key driver in our economy, and we should do more to support it.

In particular, I will mention the social enterprises that currently work throughout Scotland, contributing to our economy and providing employment and community services, as well as contributing to the green agenda. Such businesses have grown up while we have known about the need for us to be more environmentally aware, and they provide valuable services, including upcycling projects, services that collect garden waste and deal with compost, and those that provide wood and timber. We are also seeing more and more community energy production through smaller-scale wind power and hydropower schemes. I am sure that the cabinet secretary will join me in paying tribute to those businesses across Scotland and will recognise that we can do much more to support them.

We welcome the Scottish Government’s commitment to publish papers such as the green industrial strategy. Although I am sure that we will not agree with everything that the Government says, I welcome the debate and the focus on such important issues relating to our economy. We want more to be done—more investment and more understanding of how businesses that currently work in the energy sector want to adapt and change. We should not demonise particular sectors. Instead, we should work with them to move towards a greener future.

We want the Scottish Government to adopt green hydrogen as a fuel source, to be an early adopter of the technology and to move quickly to secure investment in that area, which is why it was disappointing to hear the cabinet secretary confirm at the Net Zero, Energy and Transport Committee’s meeting yesterday that the remaining 90 per cent of the promised green hydrogen fund will not be available in the coming financial year. We want there to be investment in the expanding offshore wind sector and in the onshore wind sector, in partnership with local communities. We also want there to be support for our oil and gas sector, which is a key ally as we move towards greener energy provision in Scotland.

There are so many aspects to our green economy and to green economic growth that it is difficult to cover them all in the time that I have. We must go further and do more. The Green-SNP coalition Government is failing to deliver on its priorities and targets. It has cut vital budgets and is spending money on vanity projects instead of focusing on what really matters. It is isolating key partners, such as the oil and gas sector and house builders, while shutting others out completely, such as those involved in nuclear and green hydrogen. When it comes to green energy, Scotland has so much potential, but, with the SNP and the Greens in Government, that potential could well be squandered.

I move amendment S6M-11945.2, to leave out from “is deeply” to end and insert:

“notes that the recent Scottish Budget for 2024-25 is anti-growth and will damage Scotland’s ability to create a thriving green economy by stymying investment, cutting enterprise funding, and by placing a higher tax burden on Scotland compared to the rest of the UK; further notes that the education system is not aligned with the opportunities that the green economy offers; believes that the Scottish Government’s opposition to new oil and gas exploration licences will damage the economy of the north east, and that the Scottish National Party administration’s inability to deliver economic growth has hindered the development of green jobs and a just transition, and calls on the Scottish Government to back the 93,000 oil and gas sector jobs and ensure that they are not abandoned, to end its opposition to nuclear and to ensure that the financial costs of the transition to net zero do not disproportionately fall upon individuals, families and communities.”

Photo of Sarah Boyack Sarah Boyack Labour

I wanted to be constructive when crafting my amendment, but then I saw a news article this morning that summarised the attacks on Labour that the cabinet secretary was planning to make today, which he did, indeed, make.

I agree that we urgently need to see green jobs that benefit Scotland. Huge investment in renewables offers us the chance to shift to a circular economy, with manufacturing and recycling sectors being given more support from the Scottish Government. However, we have simply not seen such support in the time that the SNP has been in power. There has been too much in the way of warm words and not enough leadership and investment.

Sadly, the Scottish Government is not, as it says, deploying all the tools and levers that are available. We need to ramp up procurement, and best practice needs to be shared across our councils and public sector organisations. That is one of the reasons why I have been pushing so hard for the creation of a future generations commissioner as part of my proposed wellbeing and sustainable development member’s bill.

The Scottish Government needs to move faster and deliver more joined-up thinking. Publication of the green industrial strategy was delayed, and we urgently need leadership so that our private and public sectors are able to provide and support investment right across the UK.

I regularly speak to innovative renewable energy companies and companies involved in retrofitting people’s homes that cannot access the training courses for their staff that would be needed to deliver potential low-carbon projects across Scotland. We need the Government to be proactive in working with industry. It should not step back from its responsibility to deliver the building blocks for a just transition.

The UK Government has failed to effectively deliver major infrastructure projects such as high speed 2, which has been appallingly mismanaged. We also urgently need a grid that will work now and in the future.

Governments need to be strategic in providing confidence, certainty, clarity and support for supply chains, so that our renewables and industrial sectors get the major investment that is needed.

Photo of Neil Gray Neil Gray Scottish National Party

Sarah Boyack says, quite rightly, that we need clarity and confidence. I was heavily critical of the current UK Government in its flip-flopping and reneging on net zero commitments. Does Sarah Boyack not feel that it is fair for us, in Scotland—herself included, I expect—to challenge any incoming Labour Government to provide that clarity and certainty? Her amendment asks us only to note the policy of the Labour Party, which has changed four times in the past few weeks.

Photo of Sarah Boyack Sarah Boyack Labour

I felt that it might not be appropriate to ask members to vote Labour, so I thought that it would be better to ask them to note our policy, then I would go through its benefits. My colleague Jonathan Reynolds has been talking about Joe Biden’s fantastic Inflation Reduction Act 2022, and about the competition that means that we have to deliver in Scotland and the UK. That is the point of my speech today.

Our local authorities are vital in supporting low-carbon infrastructure, but we are, disappointingly, not seeing the levels of investment in community renewables that the SNP Government promised. We have huge opportunities to create heat and power with our land and buildings, which would deliver lower bills to our communities and deliver investment. That is an unacceptable missed opportunity.

We need Government leadership at the UK and Scottish levels. To be honest, the Scottish Trades Union Congress was absolutely right in its briefing, in which it said:

The Scottish Government has been too quick to set ambition for jobs and economic benefit from green industries without setting up the necessary policies and funding to realise them.”

The cabinet secretary is muttering, but the SNP has been in power for more than 16 years and it has failed to deliver the transformative change that we urgently need. We have come together on two climate change acts—in 2009 and 2019—but, as the UK Climate Change Committee reported in 2022, the Scottish Government has failed to deliver on lowering our carbon emissions, on homes and buildings and on transport and land. Scotland and the UK urgently need change, and Labour’s green prosperity plan would deliver that. [

Interruption

.]

To be honest, a lot of the comments that I can hear the cabinet secretary muttering are deflection from SNP failures. We have had no publicly owned energy company, as promised; delays to the green industrial strategy, energy strategy and just transition plan; and massive cuts to budgets. It is not just this year—

Photo of Sarah Boyack Sarah Boyack Labour

N o, I will not.

There has been a 48.5 per cent cut to the climate change budget; a 75 per cent cut to the just transition fund; a nearly 40 per cent cut to the investment in the energy industries net zero budget, which last year’s budget promised would

“maximise the economic and social outcomes of the transition to a Net Zero Scotland”; a 28 per cent cut to the carers budget; and a 100 per cent cut to the green jobs fund—which is a bit of an irony for this debate. That fund was announced to much fanfare three years ago, with £100 million committed over five years, but an answer to a parliamentary question that I got this morning shows that only a mere £28 million is expected to be spent by the end of this financial year. Then there was the underspend of £133 million last year on energy efficiency schemes.

I totally agree that the Tory Government has been completely chaotic on the economy, but we are talking about long-standing failings of the SNP. It is utterly hypocritical to attack the Labour Government that we are campaigning for.

We would establish GB energy, which would be based in Scotland. It would be a home-grown, publicly owned energy champion for clean energy generation and would build the jobs and supply chains that we urgently need. If we were elected, we would act fast to lead the world on clean and cheap power across the UK, with Scotland at the forefront, and make sure that we get the cheap, clean power that we need. We would set up a national wealth fund and, crucially, work with local authorities and communities to deliver renewable heat and power that people can afford. All those aims would directly benefit Scottish households and businesses.

Our ambitions would be funded by gearing up to the £28 billion throughout the term of the Labour Government. We would be inheriting the wreck of a Tory economy, but we would be committed to gearing up to that massive investment, which is crucial.

I want to ask the cabinet secretary what progress he is making in the discussions about the critical future of Grangemouth. What support will the Scottish Government offer through investment to support the just transition and protect the opportunities that the site offers in terms of its connectivity, its location and the skills in the local communities surrounding it? We urgently need a just transition to a low-carbon economy so that those who are already working in the energy sector get the skills, training and decent, well-paid jobs that will make our economy successful. We need a Government that is prepared to do the heavy lifting.

That is why we are committed to Labour’s green prosperity plan. We know that the oil and gas sector will be with us for decades, but we need Government action and support now to put in place the investment to ensure that the private sector and Government can work together to deliver the just transition and the green jobs that our country urgently needs.

Photo of Willie Rennie Willie Rennie Liberal Democrat

I agree with the cabinet secretary’s criticism of the UK Conservative Government for its flip-flopping and its changing messages and rhetoric about investment in net zero. What Government policy is is important, but how it sounds is equally important.

The indication of the direction of travel is incredibly important for investors, who are considering what to put their money into and which part of the world to put their money in, and for companies that are considering where best to deploy their resources. The mood music is incredibly important, and it was deeply damaging. In reality, the one or two years’ change in some of the policies was probably not significant, but the rhetoric that was wrapped around what Rishi Sunak said was deeply damaging and sent a message of uncertainty, which is the last thing we need when we want people to make long-term decisions.

I will focus on some of the Scottish issues. I will try to be constructive and detailed on ScotWind, as well as on the Methil wind farm, grid capacity and various other issues.

Photo of Neil Gray Neil Gray Scottish National Party

I agree with Willie Rennie on the UK Government’s approach. Our response, in saying that Scotland is open for business, is the green industrial strategy and the £500 million that the First Minister announced for developing a domestic supply chain. The first £87 million of that is coming in this year’s budget. I hope that Mr Rennie accepts that that is us ensuring that we put up a big saltire to say that Scotland is open for business and inviting people to come here and invest in a massive economic opportunity.

Photo of Willie Rennie Willie Rennie Liberal Democrat

To be fair to the minister, there is consistency on the rhetoric. There are some questions about the policy enactment. The implementation gap, as the former First Minister might call it, is significant. I will come on to those issues.

Here is the first principle that we need to establish: I want to make sure that the communities that I represent—some of the working-class communities on the east coast of Fife—benefit directly from the wind farms that they see being built off the coast of Fife. That has not been the case so far. The collapse of Burntisland Fabrications cost the Scottish Government £50 million. The workers who were rooted in the communities of Fife were not directly benefiting, especially when the people of Fife and the rest of Scotland are paying higher electricity bills in part because of the investment that is being made in offshore renewables. That is the right thing to do, but we need to ensure that the jobs come alongside the electricity supply.

That leads me on to the ScotWind process. I fear that we have granted authority for too many opportunities for wind farm companies all at once and that we will not have the capacity in Scotland to maximise the benefit from that.

Photo of Brian Whittle Brian Whittle Conservative

Willie Rennie and I are both big fans of offshore wind. Does he recognise that one of the big issues that we have with so much offshore wind is a global lack of undersea cabling and that that will limit the speed at which we can develop the strategy?

Photo of Willie Rennie Willie Rennie Liberal Democrat

Some progress has been made on the cabling front. It is a technical area, because there are different types of cables for different parts of the process. Nevertheless, that speaks to the challenge of creating capacity in Scotland. It takes time. If we grant authority for too many opportunities at once, we might not have the capacity in the supply chain to exploit that. There might be enough to go round in any circumstances, but I would like us to maximise the amount that we get for Scotland. I am not sure that I have seen a Government investment plan for the supply chain that will ensure that we do not have a repeat of BiFab.

The facilities at BiFab were pretty rudimentary, which is partly why the company was not able to succeed in exploiting the Neart na Gaoithe opportunities. An investment plan is important. That is why I was concerned about the report earlier from the minister that some of the funds from ScotWind have been siphoned off to other parts of the Scottish budget. We need to make sure that we maximise the opportunities and help businesses invest in Scotland so that we have the maximum supply chain.

That leads back to how much we got for the ScotWind licensing round. We did not sell it for enough. The cap of £100,000 was, I think, incomprehensible. The £700 million that we got was about a third of what they were getting for the equivalent in England, and a quarter of what they were getting for equivalent space in California, where there was equally deep water and it was equally challenging to provide and build the wind farms. I therefore do not think that we got enough from ScotWind, and I deeply regret that we will not be able to use that money to invest back into the supply chain to make sure that we maximise the opportunity for Scotland.

Another issue that the minister and I have discussed before is the regulatory capacity. I also worry that companies will see a very narrow opportunity to get their licences and regulatory approvals through. I want to hear from the minister in their summing-up speech about how many more planners and specialists we have recruited to cope with the glut of demand that will come through. It is important that investors know that, if they go forward with a Scottish opportunity, they will get their application through, build the supply chain, and maximise the opportunity for Scotland.

I want to talk briefly—if I have time, Deputy Presiding Officer—about Methil.

The Deputy Presiding Officer:

You have a little bit of extra time, Mr Rennie.

Photo of Willie Rennie Willie Rennie Liberal Democrat

I am concerned that Harland & Wolff at Methil, which was previously the BiFab facility, is outside the Forth green port area, and so is not benefiting from the financial incentives that other parts of the Forth are benefiting from. It could be a subcontractor—which was, I think, the minister’s response—but I would prefer it to be fully included in the opportunities in the wider Forth green port area.

If we cannot get that and the minister is unable to negotiate that, I hope that we get some kind of investment zone status to provide a bit of a level playing field between different parts of the River Forth estuary. I hope that the minister will look at that again.

My final point is on Home Energy Scotland, and is simply a plea to speed up the process for applications for grants for home energy, which takes an age. In England, applications are much faster—for what reason, I do not know, but they are much faster there. We need to catch up, because we are putting off customers and causing uncertainty in the supply chain. That means that we are not recruiting the people that we need in order to build the capacity to supply the likes of heat pumps in people’s homes. Let us therefore speed up that process and get it working.

Photo of Jackie Dunbar Jackie Dunbar Scottish National Party

I have the honour and privilege of being one of the MSPs who represents the future net zero capital of the world. We are not there yet, but, although we have a fair bit of work to do to realise that ambition, I am confident that we will make that title our own. That confidence is not unfounded. I believe that there are a range of reasons why Aberdeen will be a global leader in the move to net zero and at the heart of a fair, green and growing Scottish economy.

The motion recognises the vital role of public investment, and our region is being supported by a £500 million just transition fund from the Scottish Government. If the UK Government is going to do the right thing and increase green investment, matching the Scottish Government’s £0.5 billion investment in the north-east would be a sensible starting point.

Photo of Jackie Dunbar Jackie Dunbar Scottish National Party

I will not take an intervention.

I would love to, but I will be talking up Aberdeen and I do not want it talked down.

Beyond public investment, so much of what saw Aberdeen establish itself as the oil and gas capital of Europe has left the city very well placed to research, develop and pioneer the new technologies that will be needed to reach net zero. On top of that, we still have oil and gas companies that are based in Aberdeen and that recognise that their own long-term future relies on their being able to deliver more sustainable forms of energy.

However, the most important reason why I am confident that Aberdeen will be the net zero capital of the world is the people we have in Aberdeen, who are some of the most talented and innovative workers from across the world. There is a line from Jimmy Reid’s rat race speech that I keep hearing from a colleague:

“The untapped resources of the North Sea are as nothing compared to the untapped resources of our people.”

That line needs to underpin Aberdeen’s approach to the just transition and our investment in a green economy. That we have oil and gas in the North Sea was key when it came to establishing Aberdeen as an energy capital. When it comes to renewables, although we rightly recognise the potential that our land and sea offer, I do not think that we talk up our folk enough. I will never tire of talking up Aberdeen and its folk.

Over the years, Aberdeen has amassed a workforce that includes many of the brightest and best in the industries that are key to making our economy green. Some of those workers were trained here; others have come from far and wide and have chosen to work here. Having such a skilled workforce means, however, that it is in demand around the world. The investment that we are seeing in the foundations of a green economy today will give those workers opportunities to move across to our green industries. It will help to keep them here and ensure that we retain our greatest asset in the move to net zero—our people.

I will use the rest of my speech to talk up a few examples of some of the amazing folk, businesses and organisations across Aberdeen that are key to growing our green economy today and that will help us to become a global net zero capital in the future.

Last week, I had the great privilege of visiting Verlume, a company in my constituency that specialises in intelligent energy management and storage technologies. It was not the first time that I had visited the company, but the word about its work seems to have gotten out, because this time it was also being visited by the chief executive of Scottish Enterprise, the cabinet secretary and our First Minister. During the visit, the First Minister spoke of wanting us to have a fair, green and growing economy. I think that Verlume’s operations facility in Dyce, where it does the work that has made it a front runner in the energy transition, was the perfect backdrop for that.

Another business that has received Scottish Enterprise’s backing, and which I am looking forward to meeting soon, is Kionnali Living Systems, which is headquartered in the Bridge of Don area of my constituency. Avriel and Corinn, who founded the company, are re-imagining what housing will look like in years to come, and I look forward to seeing what the future will bring for them and the role that they will play in making that future more sustainable.

As we look to the future, I was pleased to meet Bryan Snelling, the chief executive of Aberdeen Science Centre, just last Friday, to hear about the work that it is doing to bring science, technology, engineering and maths learning about wind farms and engineering into communities and schools across the north-east of Scotland. The staff and volunteers at Aberdeen Science Centre have, for decades, especially with their outreach work, captured the imagination of our youngsters and encouraged many who are in the green economy today to study and work in STEM.

As we look to realise the untapped resources of our folk, whether through outreach work, support for start-ups, investment in growing opportunities, the just transition fund or creating green jobs, I am hopeful for a future that will see Aberdeen established as the net zero capital of the world and a Scotland that is fairer, greener and wealthier.

Photo of Graham Simpson Graham Simpson Conservative

The Government likes to put warm and fuzzy titles to things when it wants to sound good. We have the wellbeing economy. Nobody is really sure what that is, but there is a cabinet secretary with it in his title. We have heard from him already. He is not here now, but he was on a bit of a whinge-fest earlier and, not for the first time, I found myself worrying about his wellbeing.

We have the circular economy, which is just not chucking things away and reusing as much as possible. There is a bill for that, which I suspect will cost businesses a good deal.

Here we have the green economy. Whatever we might think that is, according to the Government motion, it thinks that it is doing quite well at it, but ministers should not be so quick to pat themselves on the back.

I want to focus on two areas of interest to me, and they are both areas in which the Scottish Government should be doing better—transport and trees. Given the storms that we have seen this week, those are two things that can be linked, and they must surely be part of the green economy.

The cabinet secretary has come back. I was just saying that I am going to talk about transport and trees.

The Deputy Presiding Officer:

Gentlemen, please—not like that.

Photo of Graham Simpson Graham Simpson Conservative

I am pleased that the cabinet secretary is doing well.

Let us look first at transport and what the draft Scottish budget says about that, which the cabinet secretary was somewhat in denial about.

As we heard from Douglas Lumsden, there have been a number of cuts to the transport budget. The Scottish Government has cut the total transport, net zero and just transition budget by £29.3 million in real terms. It has cut the total rail services budget by £80 million. It has cut the just transition fund by three quarters. It has cut support for sustainable travel by more than 60 per cent in cash terms. It has also cut the future transport fund by more than 60 per cent in cash terms—in 2023-24, it spent £99.4 million on that fund, but, in 2024-25, it will spend only £36 million on it.

Photo of Neil Gray Neil Gray Scottish National Party

I find all of what Graham Simpson is saying a bit rich. I assume that he still supports the UK Government’s approach to austerity in public spending, as a result of which our public finances have been cut. That has been confirmed by the Scottish Fiscal Commission, and the projections show a cut in our capital budget. Therefore, is it not a bit rich for Mr Simpson to come to the chamber and moan about the impact of the austerity policies that he supports?

Photo of Graham Simpson Graham Simpson Conservative

The cabinet secretary needs to read the SPICe paper, which shows that the total budget from the UK Government has actually gone up. That is the reality.

I will tell you what is a bit rich, Deputy Presiding Officer—it is the cabinet secretary bringing to the chamber a debate about the green economy, when the Scottish Government has cut the total green economy budget completely. It has gone—it has been cut to nothing. The cabinet secretary is shaking his head; he obviously has not even read his own budget. The figure is zero. What a nerve the Government has.

The Government has absolutely no chance of hitting its target of cutting car miles by 20 per cent by 2030. It does not even have a plan for doing that; it has no idea how to do it.

If there is a green economy in transport, it should focus on making public transport better, but the capital budget for Strathclyde Partnership for Transport has been cut to nothing—that is another zero—which is jeopardising key projects throughout the region, such as the upgrade to the subway system and a new station at Hairmyres in East Kilbride.

I will move on to trees while I still have time. I am a hugger of trees, occasionally. I am a member of the Woodland Trust and I am the species champion for the ash. Earlier, I asked a question about the forestry budget. The enormous cuts in the woodland grant budget will torpedo Scotland’s chances of meeting climate and nature targets. Scottish Forestry faces a cut in its grant budget of more than £32 million.

The Scottish Government has increased its woodland creation targets every year, but the amount of woodland that is actually being created has fallen in each of the past five years, so the gap between ambition and reality has grown year on year. The creation of more than 14,000 hectares of new woodland has been approved for the current year, but the reduced funding will support the creation of only 9,000 hectares.

Alastair Seaman, director of the Woodland Trust Scotland, said:

“The Scottish Government must remember that warm words won’t stop climate change or restore nature. We need investment in new woodland—and fast—if we are to have any hope of a strong economy”— a green economy, we might say—

“and a healthy landscape in the years to come.”

I have not even touched on issues such as energy—on which ideology will get in the way, as it always does with this Government, but it will not keep the lights on—insulating homes, electric charging and missed environmental targets, which are all areas where the Scottish Government needs to do better.

I support the amendment in Douglas Lumsden’s name.

Photo of Michelle Thomson Michelle Thomson Scottish National Party

There has been quite a bit of chat about the SPICe paper and the budget. For complete accuracy, I put on the record that the Scottish Government’s budget will rise by 2.6 per cent in cash terms or, in so-called real terms, 0.9 per cent after taking inflation into account. I really do not think that people should be shouting from the rooftops about that, to be absolutely frank. All the people who are claiming that they have read the SPICe paper clearly have not read it.

I will move on to my speech.

I very much welcome the cabinet secretary’s speech because, to my mind, effective investment in the green economy will require the Scottish Government, the UK Government and the private sector to be on the same page on an investment strategy. It absolutely requires a clear focus, mutual ambition and support.

The chief executive officer of Offshore Energies UK, David Whitehouse, said in his letter to the Chancellor of the Exchequer in October last year:

“In the right investment environment, UK offshore energy companies could invest £200 billion in homegrown energy this decade alone.”

Given the profile of Scotland’s economy, we should expect a significant level of private sector investment that is counted in the tens of billions of pounds and dwarfs the amount of capital spend available to the Scottish Government. However, regrettably, that is not guaranteed.

Final investment decisions have to depend on policy, planning and design over several years as well as on having retained and enhanced capacity and capability among businesses. That brings me to a point that Willie Rennie made. That absolutely emphasises the need for a stable policy environment, and facing the challenges but also exploiting the opportunities together. It appears that, in fairness, only the Scottish Government is staying the course in that regard, with both the Tory Government and Labour, as the potential next Government, weakening their commitments.

Effective investment in the green economy of sufficient scale is needed to make a real difference, and it is dependent on an effective transition strategy that is backed up by practical commitments. In that respect, I am very much looking forward to the Scottish Government’s green industrial strategy—the meat, if you will.

I feel—I will put this on the record—that there is naivety in some quarters when there are calls for the abandonment of any investment in fossil fuels, thereby creating a cliff edge for the businesses that are needed for an effective transition. I say that because I am well aware that we desperately need the existing energy supply chains to support investment in the future and, critically, to supply the necessary skills, capacity and capability for a sustainable green economy.

Photo of Douglas Lumsden Douglas Lumsden Conservative

Does Michelle Thomson support the Rosebank development? That is oil and gas that we desperately need.

Photo of Michelle Thomson Michelle Thomson Scottish National Party

That is a good question. I suspect that I will be out of alignment with the policy, as ever. I am putting it very clearly that I am very much against falling off a cliff. We all need to be sensible about that. In fact, as Al Denholm put it in the Scottish National Investment Bank’s “Transition Finance 2023” report:

“For transition to net zero to succeed, we need the skills and capabilities of the people and organisations currently working in the fossil fuel supply chain. A just transition means bringing them on this journey with us, not leaving them behind. And that will take long-term, strategic investment.”

It is therefore absolutely about real, active partnership, not merely to protect current jobs, but to invest in the future and realise opportunities.

Let us take, for example, the situation in my constituency regarding the future of the Grangemouth refinery. Scotland and, indeed, the UK need the refining skills, business capability and supply chains that are currently serving our economy. The decline of fossil fuel refining should not be the end of refining in my constituency.

Part of a just transition must involve the establishment of, for example, biofuel refining capacity, including to support the development of sustainable aviation fuels. Those fuels will play a critical role in reducing aviation greenhouse gas emissions.

I was very disappointed to learn that the UK Government’s sustainable aviation fuels plan, included in its £15 million green fuels, green skies competition, led to funding being given to eight projects, but none of those was from Scotland. However, the still modest £165 million advanced fuels fund might be a further opportunity. I hope that, if that comes to pass, the Scottish National Investment Bank, given its already stated views, would be a willing partner.

One possible process involves hydrotreated esters and fatty acids—or HEFA—which refines vegetable oils, waste oils or fats into sustainable aviation fuels through a process that uses hydrogenation.

Because of refinery capabilities and wider planned developments in Grangemouth, it would seem to be the ideal centre for urgent investment from Government and the private sector to realise new opportunities. I am aware that the Scottish Government ministers Neil Gray and Gillian Martin are involved in very purposeful discussions on Grangemouth and are working hard on the matter. I thank them for that. It may be that the minister is able to provide further updates in his summing up.

It is clichéd to say that every problem is also an opportunity. However, in the case of Grangemouth, it may well be that the current problems will act as a spur—indeed, they should—for future strategic investment from the public and private sectors. As Willie Rennie put it, the mood music is important in that respect. I will certainly be doing all that I can as the local member to support the development of a sustainable future built around Grangemouth.

Photo of Colin Smyth Colin Smyth Labour

The Scottish Government’s motion is true to form. The Scottish Government rightly criticises the UK Government’s failings, but it does not show any humility at all by acknowledging its own. The motion mentions the 42,000 jobs that are supported by the renewable energy industry, but it does not mention the 130,000 jobs that Alex Salmond promised when he said that we would be the “Saudi Arabia of renewables”.

I recognise the huge progress that has been made in reducing emissions through renewables, but I know that the cabinet secretary accepts that that has not translated into a jobs-led transition at the scale that we all want to see and, frankly, we should have seen. The just transition commission was right when it said:

“Despite progress in applying a just transition approach to policy development and planning at the national level, the tangible benefits in people’s everyday lives are yet to be felt.”

Scotland has a massive share of Europe’s installed onshore wind capacity, but we know that no turbines are manufactured here. We have some of the largest offshore wind farms, but we barely fabricate any jackets, and Scotland’s sea beds have now been leased for offshore wind almost entirely to overseas-owned firms, which means that billions of pounds of profits will be offshored.

We cannot afford to continue to offshore far too many of those supply chain jobs. That means that we need to ensure that the positive words of national planning framework 4 on renewables translate to delivery on the ground through the pace of consenting to those offshore wind developments. It means setting out an energy route map with timelines for the steady stream of work that is needed to give supply chain companies the confidence to invest. It means, as the STUC has highlighted, having a proper green industrial strategy—it is long awaited—that includes the sectors that are key to building Scotland’s manufacturing and supply chains, having the interventions and investment that need to be made to build capacity in those sectors and anchor them domestically and, crucially, creating jobs on fair work terms that are covered by collective bargaining agreements. It also means ensuring that the economic growth from renewables is inclusive and benefits all of Scotland.

If we consider the sectors that can tackle Scotland’s sluggish economic growth and create those greener, fairer, good, secure jobs, we know that all roads lead to renewables, but, sadly, those roads do not currently lead to every part of Scotland. If we are serious about a just transition in which no worker, family or community is left behind, we need to get more serious about where those green jobs are created.

Dumfries and Galloway, which is my home region, has 3 per cent of Scotland’s population but we generate 8 per cent of Scotland’s renewable energy and we are home to 11 per cent of Scotland’s more than 4,000 wind turbines. However, few of those renewable jobs are located in the region.

There are exceptions. There are innovative companies, such as Natural Power, which has a proven track record of running a high-tech international business from a rural location and supporting the local population. However, there is a need and there are opportunities to do an awful lot more. For example, the decommissioning of wind farms will significantly ramp up from 2028, when many first-generation developments will come to the end of their lifespan. It is an environmental contradiction that, although some parts of those wind turbines can be easily reused or recycled, the blades, which are made of reinforced polymer, have created a significant challenge.

The Scottish Government recognised that in September, when it agreed, as part of the onshore wind sector agreement with the industry, to deliver a specialist blade facility in Scotland for the decommissioning and recycling of old wind turbine blades. A cross-party group of MSPs and I have written to the cabinet secretary to make the case for that hub to be at Chapelcross in Dumfries and Galloway, which is the optimal location for Scotland’s blade hub.

Using the former nuclear power station would be a visible example of a just transition in action, and it would fit in with the Government’s commitment to the Borderlands inclusive growth deal, with its pledge to make Chapelcross a focal point for clean energy. The site is at the geographical centre of the on-and-offshore decommissioning pipeline, with major wind farms not only across South Scotland but in north Wales and Northern Ireland. There are transport links, with its close proximity to the M74 and the A75, and the major ports provide ease of access to—

Photo of Emma Harper Emma Harper Scottish National Party

You mentioned the site at Chapelcross. I have been involved with the letter writing on that as well. Do you agree that highlighting the opportunities in South Scotland for a just transition demonstrates that a just transition is for the whole of Scotland and not just the north-east?

The Deputy Presiding Officer:

Members should speak through the chair.

Photo of Colin Smyth Colin Smyth Labour

I agree that the just transition should be for the whole of Scotland but, so far, the south of Scotland has not benefited as much as it should have. As I have highlighted, there is an opportunity to do so by locating Scotland’s blade hub at Chapelcross. It already has service land available via South of Scotland Enterprise and the Nuclear Decommissioning Authority.

The region is also the operational base of ReBlade, which is the UK’s first blade-decommissioning company. That high-growth Scottish start-up would be an obvious anchor enterprise to lead Scotland’s new blade hub. It is a great example of an indigenous innovation that was born out of the Scottish green energy sector. It is an existing supplier of blade services to major wind farm developers and turbine original equipment manufacturers. The company is already delivering contracts for its innovative work in turning those blades into public realm furniture. It has pioneered blade material repurposing research and development, it is a global leader in circular blade innovation, and it has established links with academic blade research and organisations, including the National Manufacturing Institute Scotland. The company already has existing specialist supply chains located in Dumfries and Galloway, which will be required to grow, and it forecasts that there will be 80 full-time jobs situated in Chapelcross by 2030 if we grab the opportunity.

I hope that, at the very least, the cabinet secretary will respond positively to the request in our letter to meet me and the cross-party MSPs who are based in Dumfries and Galloway to discuss the opportunities that locating Scotland’s blade hub at Chapelcross would bring to the local economy.

I passionately believe that our net zero targets are not the barrier to economic growth that some claim, but that they are the very pathway to it. That must lead to every part of Scotland if we are serious about making the transition to net zero a genuinely just one.

Photo of John Mason John Mason Scottish National Party

Thank you for the opportunity to speak today. Energy—especially oil and gas—has been a big part of the Scottish economy in recent decades and, as we move towards using more renewable energy, Scotland has tremendous potential.

The green economy is not solely about energy, and we want the whole of our economy to become greener. However, energy is obviously a big part of it, and that will not happen automatically. We need to invest now, but, sadly, the UK Government tends to have a very short-term outlook. It has cut national insurance in order to win the next election, but it has cut expenditure—especially capital expenditure—as a result. The UK is spending only about 3.1 per cent of gross domestic product on capital investment, which means that it is in the lowest quarter of 30 Organization for Economic Co-operation and Development countries; generally, the UK ranks between 23rd and 27th out of 30 countries. It spends only 1 to 2 per cent of GDP on a just, green transition. It seems that the UK is falling behind larger competitors such as the United States and the European Union.

Photo of Brian Whittle Brian Whittle Conservative

Does John Mason recognise that the UK is the only one of those countries that has cut its carbon emissions by half?

Photo of John Mason John Mason Scottish National Party

I will speak about some other foreign examples in due course. I welcome any improvement by the UK and other countries but, to go back to the point about nuclear power that was made earlier, if that is included as cutting carbon emissions, the counting is being done very badly.

The result of low UK capital investment is a low capital budget for Scotland. As has been said, SPICe told us that there is a decrease next year of 1.2 per cent in cash terms, which equates to a 2.8 per cent decrease in real terms. Of course, that is using the GDP deflator, but real inflation is much higher than that, so the purchasing power has fallen by a lot more than 2.8 per cent. The vast bulk of our capital funding comes from Westminster—some £4.7 billion—whereas our limit for capital borrowing is less than 10 per cent of that. It has been £450 million per year for some time and, even with the updated fiscal agreement, that only takes us up to £458 million. Whether we use bonds or other forms of borrowing, that is still the limit.

The very restricted capital budget impacts on the electrification of rail, SNIB investment, improved housing capital and a host of other spending that would boost the economy in general and, specifically, the green economy in the longer term.

The Finance and Public Administration Committee is often critical of the fact that we do not talk about the national performance framework and national outcomes explicitly enough or often enough. Civil servants have told us that the NPF lies behind decision making and is usually more implicit than explicit. Let us remind ourselves that our overarching purpose is to focus on creating a more successful country, with opportunities for the whole of Scotland to flourish through increased wellbeing and sustainable and inclusive economic growth. The national outcome for the economy is that we have a globally competitive, entrepreneurial, inclusive and sustainable economy. The relevant national indicators include international exporting, economic growth, carbon footprint, greenhouse gas emissions and income inequalities. The related sustainable development goals include SDG 7, on affordable and clean energy, and SDG 12, on responsible consumption and production.

Previously, when I was on the Economy, Energy and Fair Work Committee, it was clear that one of the huge challenges that we face is in storing energy. What happens when the wind does not blow or the sun does not shine? Cruachan and pump storage are great, but they only take us so far. That is why my gut instinct is that green hydrogen will be a great opportunity for Scotland and beyond. When we have excess wind, rather than turning off the turbines—

Photo of Edward Mountain Edward Mountain Conservative

I thank the member for giving way. I agree with you that hydrogen is a real opportunity for us, partly because it also means that we do not have to have pylons all the way across Scotland—we can have pipes instead. However, given that the Government has drawn back from its commitment to invest £100 million in hydrogen, how do you think we will achieve that?

The Deputy Presiding Officer:

I remind members that they need to speak through the chair.

Photo of John Mason John Mason Scottish National Party

I will come back to my point that, if the UK restricts our capital investment, Scotland has very little room for manoeuvre, especially when some of the capital investment is already legally committed, so the space for moving around what we can do is very limited.

It is great that there is the opportunity to export hydrogen, as well as storing it for our own use. The costs of production are high at the moment, but it is surely likely that costs will come down as the technology advances. We know that there will also be export opportunities, with Germany, for one, looking to reduce its dependence on Russia.

Just the other week, in one of the rail magazines, I read that Alstom is producing hydrogen-powered trains for both Lombardy and the south of Italy. Today, in the same magazine, I was reading about a Spanish consortium that is developing the world’s first hydrogen high-speed train. Nearer to home, we have the H100 project in Fife, and we look forward to seeing the results of that and other pilot projects.

There does not need to be any clash between supporting our green economy and continuing to support our tourism sector. I get emails from around Scotland complaining about turbines—and perhaps, as Mr Mountain said, pylons, as well—and their claimed negative impact on the allegedly unspoilt countryside. However, for many, the wind farms are very attractive. Whitelee, near Eaglesham, is the UK’s largest onshore wind farm, and a walk around there is a great experience. My father, as an electrical engineer, used to point out to us the beautiful pylons in the Highlands and how the wires curved around the valley.

I will skip the next bit of my notes, as I need to finish.

Finally, at a more local level, Scottish Enterprise makes the point in its briefing for today’s debate that social enterprises are already delivering in our green economy. It gives examples of local organisations and points out that it has produced a toolkit for net zero, which aims to help social enterprises improve their environmental impact. I will close by mentioning a company in my local area that has achieved B Corporation certification, which is Dear Green Coffee, in the east end of Glasgow. That shows that companies can become more green and be very successful.

Photo of Brian Whittle Brian Whittle Conservative

I welcome the opportunity to speak in the debate on an extremely important topic for Scotland as the world looks to transition to cleaner energy solutions. I will start with a brief moment of consensus: I am sure that we all agree that Scotland has some fantastic opportunities to benefit from the necessary move to a greener, renewable economy. We have a richness of natural resources that could, and should, put Scotland at the forefront of the green economy. However, the actions of the Scottish SNP-Green Government fall far short of the stated ambition that it is so keen to peddle. It puts me in mind of a quote from Milton Friedman, who said:

“One of the greatest mistakes is to judge policies and programmes by their intentions rather than their results.”

That encapsulates everything that has been wrong with the Scottish Government over the past 17 years. It is all about targets and objectives, without the Government ever coming up with a route map to achieving the desired effect. Outcomes are what matter. Without them, all that we have is a wish list that may as well have been born in the land of rainbows and unicorns.

With the Greens in tow, the green credentials of the Government have got worse, not better. Let us not forget that Patrick Harvie declared that, by 2030, Scotland was going to have 1 million homes that had been retrofitted with heat pumps. What a fantastic ambition—right up to the point where we highlighted that we were 22,500 engineers short, and that they would have to be in place by 2028, which meant that they would have to be in education and training right then. In a written question to Patrick Harvie, I discovered that the Scottish Government does not even keep track of how many qualified engineers are currently working in the industry. How can we possibly plan to have the numbers we need if we do not know what number we have?

Photo of Patrick Harvie Patrick Harvie Green

Will the member reflect for a moment on the appallingly damaging signals that were sent to those who want to invest in the skills, supply chain and capacity for our heat in buildings programme when they saw the UK Government backtracking on, downgrading and diluting climate action, including action on heat in buildings? If we want the investment that is necessary to make these changes possible, at the scale and the pace that we want, we need to give the industry crystal clarity in order to make it worth its while to invest. Rishi Sunak blew a hole in that agenda.

Photo of Brian Whittle Brian Whittle Conservative

In that answer, we see everything that is wrong with the minister’s approach. He did exactly that: once he had realised that he could not reach his ambition, he backtracked and decided to bench his own target. Willie Rennie was quite right to point out that, in Scotland, to get the money through for the licences to put in heat pumps takes in the region of three to four months, whereas in England, it takes about five days. That is why Scotland’s policy has failed.

It is simple: work out what has to happen to hit the targets—targets that, incidentally, the Parliament agrees with—and then put the building blocks in place so that those targets are achievable. I am a big fan of the approach of creating stretch targets and making them bold and even world leading, but that is not the end of the process. It is only the beginning. Unfortunately, it seems as though the thinking stopped at the targets and then it was off to celebrate at the wine bar.

Big decisions matter little if they are not followed up with a commitment to action. We saw that when the First Minister at the time, Alex Salmond, declared that Scotland was going to be the Saudi Arabia of wind. What an opportunity that was to ensure that we had the education in place, as well as the technology and engineering capacity, to deliver on that opportunity, but none of that happened. We imported all that technology, enriching other nations that had made plans and were ahead of us on the curve. We had some potential manufacturers that had intentions to develop wind farm manufacturing technology capability—BiFab and Ferguson Marine. Unfortunately, those opportunities did not come to fruition. What did they have in common? Scottish Government intervention.

Photo of Ben Macpherson Ben Macpherson Scottish National Party

It is important to bear in mind that the UK had a comparative advantage in offshore wind development in the 1970s and 1980s but, unfortunately, it did not take that opportunity. The manufacturing industry in Germany and Denmark became very strong and that remains the case to this day. The issue goes back way longer than the dates that the member has mentioned.

Photo of Brian Whittle Brian Whittle Conservative

I love the way in which the SNP tries to find any strangled route to blame someone other than itself. Alex Salmond declared that the SNP Government was going to make Scotland the Saudi Arabia of wind power. The fact of the matter is that the member’s Government has not done that.

As we look to transition from fossil fuels to a greener, more sustainable energy source, it is hugely important that we recognise three things. First, we will require the oil and gas sector for decades to come; secondly, we need the skill set that has been developed in that sector transitioning to the green economy; and, thirdly, we must ensure that our education system is developing the skill set that is required to deliver a just transition. Unfortunately, none of that is happening. The language that is used in the chamber by the SNP and the increasingly shrill and ill-informed Green Party is vilifying an oil and gas sector that, if we are not careful, will stop investing in Scotland.

There is clear evidence that the workers in the sector are already moving away. A recruitment agency told me that it is taking highly skilled workers from the oil and gas sector in Scotland and moving them to other oil-producing nations. Why would those workers stay in Scotland when they are having to pay for their own retraining to get jobs that pay far less? There is a gap between the highly paid skilled jobs that are available in the oil and gas sector and what is available in the green economy, especially when it comes to high-value jobs.

Yes, we need targets to develop a green economy, but, more important, we need policies that are backed up with actions that give us a clear direction for our skilled workers to make that move. We need to weave the green economy throughout our education system to show the huge opportunities that it can bring and we need to stop undermining our oil and gas sector before we just offshore that problem and end up importing more and more of our energy requirements. The SNP does not seem able to grasp that—

Photo of Alison Johnstone Alison Johnstone Green

Thank you, Mr Whittle. You must conclude.

Photo of Brian Whittle Brian Whittle Conservative

— and the Greens just do not seem to have a grasp on reality.

Photo of Fergus Ewing Fergus Ewing Scottish National Party

The Highlands and Islands should become the heart and hub of renewable development in Scotland over the next 50 years—working with Aberdeen and other centres of excellence, of course. That is not Trumpian hyperbole, but a conclusion that can inescapably be drawn from the facts—not only the facts of existing developments in the Highlands over the past 20 or 30 years in various types of renewables, but the fact of the huge scale of planned investment over the coming decades, as, I am sure, the minister is extremely well aware.

The Highlands really is where it is going to happen, whether that be through massive grid upgrades, pumped storage projects, offshore and onshore wind, modern salmon farming, the Inverness and Cromarty green freeport development, Kishorn, tidal energy in the Pentland Firth, the constant array of exciting developments in Orkney, in particular, and in other islands as well, and the plans for Stornoway harbour.

The scale of development is quite immense; it is staggering, actually. The Highlands and Islands Enterprise five-year plan fleshes that out. I will give some examples.

Haventus Ltd owns Ardersier port, which was once the home of McDermott, Barmac and the largest fabrication centre in Scotland. The port has been a sleeping giant, and we have seen many false dawns, with potential developers coming and going. Haventus has come up with £300 million of investment for the port’s development. Lewis Gillies, the chief executive officer of the company, showed me round the port a couple of months back. It is quite stupendous what the company is doing there. It has huge plans to extend its scheme in order to attract manufacturers of components of offshore wind equipment. I have known Lewis Gillies for some years. He will succeed—provided that he gets co-operation from the Government, which I will come on to.

Roy MacGregor’s Global Energy Group is equally set to achieve great things with a huge manufacturing plant for subsea power cables, which Brian Whittle and Willie Rennie mentioned. That will be a key aspect of our succeeding. There is a shortage of cable manufacturing capacity globally, so we need to be part of that party in order to have a properly integrated supply chain.

The Japanese company Sumitomo Electric Industries has announced plans for a factory at Nigg. The Coire Glas and Red John pumped storage hydro schemes, along with the schemes at four other sites in Scotland, which build on our two existing sites at Foyers and Cruachan, are enormous investments. Each such scheme usually involves investment of around £1 billion to £3 billion. The grid upgrade that is planned by SSE is, I believe, to the tune of £20 billion.

Bakkafrost is investing in modern salmon farming techniques and Stornoway harbour is set to welcome cruise liners, which will be the missing piece of the jigsaw and will provide a place for cruise liners to stop, as they circumnavigate the British coast. From the commercial aspect of the cruise liners’ business, that has been a missing link. Of course, we also have Ali Ferguson doing great things at Kishorn.

I have mentioned some things that are happening, but an awful lot still needs to happen. I will make one general point. Much of the debate has been about defending or attacking the record of the Scottish Government or that of the UK Government. Those are political points and this is a political debate, so far be it from me to present myself as being on a higher plane than anybody else. However, political debate is not really the point, because the companies that I mentioned are going to do business not because somebody gives them a handout or a subsidy, but because they think that they can make a success of that business. I am not even sure that subsidy or financial support is necessarily what they want, anyway. Therefore, I just want to make a few general points about things that they do want.

Photo of Neil Gray Neil Gray Scottish National Party

As I am originally from Orkney, it is very welcome to me to hear being played back Fergus Ewing’s insights into success and competitive advantage in the Highlands and Islands, and the success that is already happening there on the renewable energy front.

The member is absolutely right that the needs of business must be addressed, and that that goes beyond subsidy. Actually, the most important things are the business conditions in which people operate and the investment certainty that is given. That is why I hope that the member will welcome the fact that we are producing a green industrial strategy to set out exactly that for those who are looking to invest in the supply chain, for example.

Photo of Fergus Ewing Fergus Ewing Scottish National Party

Yes, I welcome that.

I hope that, as a humble back bencher, I might get a little bit of time back for that intervention, Presiding Officer.

We need more people and more homes, and we need proper transport links. It would be remiss of me not to mention dualling of the A9 and the A96. If we are to achieve all those things, we cannot continue with the transport system that we have, because it ain’t good enough. I make that general plea, as members would expect of me.

Willie Rennie mentioned the streamlining of consents and of the licensing and regulatory regime. That is absolutely key, because there is a real risk that the process will take years, or decades. I have seen it happen. When I was energy minister, we very nearly got island connections—for which I pay tribute to Ed Davey—but, sadly, I am afraid that that was stymied by political intervention.

Therefore, my next suggestion—of course, I do not wish to be uncontroversial—is that we should have in Britain a standing committee that is comprised principally of the UK and Scottish Governments to drive forward those matters. They do not stop at the border but require action from both sides and from many public bodies—maybe too many. A standing committee would provide political oversight and drive. It could meet biannually—in Inverness, obviously, and maybe in London. To be serious, I suggest that it would provide focus and momentum, which we need in order to drive things forward. In politics, we move from one topic to another and things are quickly forgotten. I recommend that consideration be given to that idea.

I see—

The Presiding Officer:

Please conclude, Mr Ewing.

Photo of Fergus Ewing Fergus Ewing Scottish National Party

You have anticipated my words, Presiding Officer.

I hope that I have given some food for thought, and I wish the cabinet secretary well in what I found to be an absolutely fascinating and engrossing portfolio.

Photo of Maggie Chapman Maggie Chapman Green

I thank all the organisations that sent us briefings for the debate, challenging us to think differently about what our economy is for, about what a green economy includes and about the kinds of actions that we need to take to make it a reality.

The Scottish Greens are clear that the just transition that we need is not just an energy transition: it is not just a shift from polluting fossil fuels to clean renewables, and it is not just about replacing dirty energy with clean energy. It is a transformation of our economy and, therefore, of our society.

The transformation is a vital effort to create communities that are fairer, healthier, more empowered and more prosperous, and to ensure that our planet remains liveable for humans and other species for generations to come. That is the purpose of the flourishing momentum that is driving Scotland’s commitment to a green economy.

With that foundational purpose, it should be clear that we need to recognise the intertwined nature of social, environmental and green economy outcomes, and that we need to act accordingly. Scottish Greens have always been clear that social justice, environmental justice and economic justice are inextricably linked and mutually reinforcing.

Our work to develop a green economy is not just about technological innovation and industrial transformation, although those matter, as we have heard. A green economy must be a pathway to more equal communities that have the powers and resources that they need to shape their own socioeconomic objectives. It is that emphasis that will be the measure of our success or otherwise in our commitment to a just transition—one that centres the voices and needs of communities and workers; that supports equality and inclusion; and that prioritises the wellbeing of our citizens and the sustainability of our planet, alongside decentralised economic development.

Of course, although the imperative to transition away from oil and gas is clear, given the climate crisis that is already devastating communities here and around the world, it presents us with significant opportunities. We have already heard about the substantial increase in jobs in the renewables sector—by more than half in 2021 alone—and the potential for more secure, well-paid and highly skilled jobs in energy, as well as in agriculture, nature, construction and transport. We must also recognise that there will be low-carbon jobs beyond those sectors—in sectors that are vital to our wellbeing as humans, such as care and creativity.

Our economic development activities and investment must align with social and environmental wellbeing. The “Climate Emergency Skills Action Plan 2020-2025”, with its pipeline of nearly £90 billion of green investment over the next three years, is welcome. However, we must ensure that such plans also deliver on gender equality and inclusion objectives. As Close the Gap has highlighted, our current approach is “gender-blind” and risks reinforcing unequal structures and practices.

We must understand the symbiotic relationship between public investment and the just transition to net zero, and we must see that as underpinning the forthcoming green industrial strategy. The strategy must be more than a plan; it must identify and channel actions to take advantage of the economic opportunities for Scotland in energy, manufacturing, house building, food production and more. Public investment is the catalyst for our social and environmental goals, as the cabinet secretary identified.

In this context, the UK Government’s failure to match the ambition of, and the action that has been taken by, the US and European Union with, respectively, the Inflation Reduction Act and the green new deal is a major barrier to progress. It constrains our ability to rise to the challenges that we face in Scotland to deal with the climate crisis and build the new society with care, equality and opportunity at its heart, and to secure Scotland’s place as a world leader, with all the advantages that that affords, in our just transition journey. I hope that we see the investment that we need from future UK Governments.

Despite those limitations, however, Scotland remains steadfast in our commitment to climate action, with significant investment planned in the coming year. We know that we can enhance our lives without disrupting the planet’s life-sustaining processes. Our communities need to see the benefits of the opportunities that are available—from clean air and warm homes to good jobs and healthy food.

Therefore, all the practices and approaches that we develop must be genuinely sustainable. They can help us to replace precarious, repetitive, unfulfilling or dangerous jobs, improve working conditions and work satisfaction, and support community empowerment and wealth building. Alongside that, we should develop and implement the right regulation, monitoring and assessment not only of our practices and processes, but of our institutions and governance structures. Tweaking around the edges of the status quo will not do.

We must lift our sights, remind ourselves that strategic planning and long-term thinking are required, and remember that our communities and workers have extraordinary skills, creativity and capacity to change.

I echo Jackie Dunbar’s passionate call for Aberdeen—I would say the whole of the north-east—to be the driver of Scotland’s green economy and sustainable future. I pay special tribute to the excellent work of the just transition lab at the University of Aberdeen, as a model of interdisciplinary working that brings together social, environmental and economic understanding in a way that we need to replicate across Government and wider society.

Our pursuit of a just transition goes beyond mere economic realignment: it is a call for synergistic integration of social, environmental and green economy outcomes into the fabric of our future.

The Presiding Officer:

Thank you, Ms Chapman. You must conclude.

Photo of Maggie Chapman Maggie Chapman Green

The time for decisive action is now. Together, we can propel Scotland towards that future.

Photo of Rhoda Grant Rhoda Grant Labour

I will address two things today—first, the ScotWind leases; secondly, the opportunities that community energy can deliver.

Like other members, I cannot comprehend why the Scottish Government set an arbitrary maximum for bids for ScotWind projects. It was absolutely senseless. The maximum was well below what was bid in later international auctions. The Scottish Government massively undervalued Scotland’s natural resources. Since the ScotWind auctions, three offshore wind auctions have been completed—two in the United States and one in England—and Common Weal estimates that they raised up to 40 times as much as the ScotWind auctions. The UK Crown Estate ran a similar auction in 2022 with annual fees rather than a block sum and without an arbitrary bid cap. If Scotland had followed a similar model, ScotWind would have raised £28 billion over the next decade—enough to cover the budget shortfall and more than £1 billion a year to invest in our public services and a just transition.

As other members have said, very few supply chain jobs have come to Scotland from those auctions. Sarah Boyack quoted the STUC, which made it clear that the Scottish Government was quick to state its ambitions for economic benefits but

“without setting the necessary policies and funding to realise them.”

There is no industrial strategy. We see workers who are in danger of losing their jobs at Grangemouth. That is not a just transition.

It is a disgrace that the Scottish Government has squandered the opportunity that ScotWind brought. If that was not bad enough, we now learn that the sums that the Government raised from ScotWind will be used to fill a black hole in its budget that was created by its mismanagement. It is disingenuous of the cabinet secretary to criticise those who are not yet in Government and so do not have the tools and levers that the Government has when the Scottish Government has squandered its tools and levers.

I contrast this Government’s incompetence with what communities have achieved. Communities that have had the opportunity to develop their own renewables have built their local economies and laid down the foundations to address depopulation. Energy companies that develop renewables will create community funds, but the amounts that are given are paltry and they often come with caveats that prevent communities from investing in what they need. Assisting communities to develop their own renewable generation means that the profits stay local and the communities have control over how they are spent.

I will give members some examples. Point and Sandwick Trust found that community returns from community-owned wind farms are 34 times the standard industry community benefit payment. The figure is £170,000 per megawatt per annum, compared with the £5,000 per megawatt per annum that would otherwise have been received in community benefit. On the Orkney island of Westray, a 0.9MW community-owned turbine has returned to the community approximately £299,057 per megawatt per annum, and it is expected to contribute £6.8 million to the community over its 25-year lifespan.

The Knoydart hydro scheme, which is owned by the community foundation that owns the Knoydart estate, is not connected to the national grid, so it supplies its energy to the 120 local residents using a 280kW hydropower system, which was recently upgraded. That has allowed a new micro brewery to be connected, which will create new local jobs, and new property developments will be able to benefit from the electricity. The lower energy prices that the scheme charges the community mean that the micro brewery is able to thrive and is not paying the colossal energy costs that other micro breweries have to pay.

In Kinlochbervie, there is a wholly locally owned hydroelectric scheme. It is estimated that it has saved more than 13,000 tonnes of carbon emissions and contributed £1 million in community benefit over its lifetime. Investment has been made in training local people in maintenance of the scheme, which has created local skills and ensured that the community has energy security.

Those examples and the many others contrast starkly with the Government’s efforts and its management of resources. It is time that we invested in communities and enabled them to develop their own projects. That will not only help us to meet our targets but provide investment in the economies of our local communities.

Photo of Ben Macpherson Ben Macpherson Scottish National Party

This debate on the development of our green economy is important not only because, collectively, we must contribute to tackling the climate emergency but because a green economy brings huge economic and social benefits, and there will be more such benefits as we develop that economy, whether lower energy costs, better health, less pollution or more job creation.

The green economy development that there has been so far and that we want there to be in the future has been and will be mostly led by the private sector. That is the reality. However, appropriate strategic public investment and policy direction are extremely important. Examples include the measures that the Parliament has taken in recent years, the development of the First Minister’s investor panel, the focus on enhancing the supply chain and creating opportunities, and UK Government subsidy funding through things such as the current contract for difference. All those things matter, as do, internationally, the Inflation Reduction Act in America and the European green deal.

As I said, the change that we want will be led by the private sector. When reflecting ahead of today’s debate, I thought about two different roles that I played in the private sector before I became an MSP, and about why they matter. About 15 years ago, I worked for one of Scotland’s wave energy companies, which was staffed largely by people from the oil and gas sector. I emphasise the point that has been made about how that expertise is vital for the development of our renewables capability. In that company, there was huge technological innovation and development, with remarkable people looking for solutions and not being perturbed by problems. We were moving towards the commercialisation of that technology.

Many lessons were learned about such technological development, and we should think about those as we go forward so that we make the most of the opportunities that are before us. Those opportunities might relate to current tidal development, to the growing capacity of our hydrogen sector or to companies such as Gravitricity, in my constituency, which is looking to use the power of gravity to create storage and then release it when the market needs it.

We have a comparative advantage in all those areas of innovation—including sustainable aviation fuel, which has been mentioned—and we must not lose that. That is why support is vital. As I said earlier, in the 1970s, the UK was at the forefront of onshore wind innovation, but we let that go. Companies elsewhere, particularly those in Denmark and Germany, grew their capacity, and now they have such strong market power that, for the foreseeable future, onshore wind technology will be manufactured in those countries. Through strategic public investment and policy, we need to create the conditions here to ensure that companies invest in our renewables development and potential. What is happening at the moment in that regard is really exciting.

Photo of Sarah Boyack Sarah Boyack Labour

I am a bit unnerved, because I have agreed with most of what the member has said so far. However, will he reflect on the issue about consenting, particularly for offshore wind? I know that, for a lot of companies, some of which are based in our constituency, it takes two years to get consent in Canada but about eight years in Scotland. That is something that we could work together to change.

Photo of Ben Macpherson Ben Macpherson Scottish National Party

I absolutely agree. I raised those points at committee yesterday and I will conclude on them shortly.

I want to go back to the second role that I had in the private sector before becoming an MSP. The period when I worked in this role is an important aspect, as we can learn lessons from it to make sure that we maximise the opportunities. About 10 years ago, I was involved as a solicitor in helping to finance onshore wind. That demonstrated to me the excellent professional services that we have in Scotland for renewables, as well as the more manufacturing-based skills and opportunities. I worked in the financing of such wind farms in a thriving time when we had the renewable obligation certificate. Unfortunately, a Conservative Party manifesto commitment in 2016—which I think the Conservatives would now, in good conscience, regret—removed subsidy support from onshore wind at a time when the industry was about to reach a position of not needing subsidy. It was such an illogical mistake. We need to learn from that as we move to offshore wind.

That brings me to contracts for difference. It is widely recognised that the auction round 5 was not well considered by the UK Government. As we move to auction round 6, I hope that there will be an increased auction strike price so that Scottish offshore projects are eligible for the auction. The UK Government is giving a signal on that, and I hope that it bears fruit, because there is such an opportunity in offshore wind.

I will conclude on the point that Sarah Boyack rightly raised about consenting. This is an ask of the Scottish Government. From my experience and my constituency casework for a range of different organisations, I know that we have to improve the consenting timelines in Scotland. I know that the Government is attentive to that. I see that as the most prominent area in which we could lose out on opportunities if we do not make improvements in the period ahead. We need resource and we need to build a skills base, and I welcome the Government’s attention to that.

Collectively, we have huge opportunities, and we need to learn from the mistakes of the past. Let us work together, create as many jobs as possible and make the social, economic and climate difference that we can.

The Presiding Officer:

We move to the winding-up speeches.

Photo of Alex Rowley Alex Rowley Labour

Neil Gray talked about the enormous economic opportunity, which is a point that was also made by John Mason and Brian Whittle. To achieve that opportunity, we need to ensure that we are able to deliver and not just talk.

Fergus Ewing was right to highlight the issues around oil and gas, and Michelle Thomson said that we must not fall off a cliff edge, and I agree entirely with that. The cabinet secretary’s response to that is generally to talk about a just transition. However, many workers want to know what a just transition is. It cannot be just words. Coming from a mining community, I know what happens when workers are not supported, and we are still paying the price for that in such communities.

Willie Rennie talked about the Energy Park Fife and BiFab, up at Methil. There is a real concern there, and I am not sure why those yards were not included in the Forth green freeport. The yards at Methil and, indeed, Arnish are now at a major disadvantage. I hope that the Government is well aware of that point and is going to take some action on it.

Douglas Lumsden said that the Scottish Government should do more. I agree that both Governments should do more. Crucially, the people of Scotland want our Governments to work together. People are sick and tired of both Governments point scoring and fighting with each other instead of putting the interests of the people of Scotland first—a point that Fergus Ewing made. It has been a good debate, but we need actions that speak louder than words.

Yesterday, I met workers from Grangemouth. They also want a just transition, but their future looks bleak. I hope that the minister will say what actions are being taken to support those workers and their industry.

Ultimately, the debate is about how we prepare for a future that is fast approaching—a future that demands a change in thinking, attitude and action. My interest in the debate comes not only from my concerns about the increasingly harmful impact of the climate crisis on our planet, but from the work that I undertook for my proposed member’s bill to introduce a Passivhaus-equivalent energy efficiency target for all new-build housing in Scotland, which the Government has adopted.

Throughout that work, I had the opportunity to meet a range of stakeholders, many of whom work in the industries that we are discussing, and to hear from them not only on my proposals but on the issues that affect them and their future successes. A point that came up time and again—which I have raised in the chamber time and again—is the shortage of skilled workers in construction and across the Scottish economy. When it comes to skills, training and education, there is the real world, and then there is the SNP Government world—a world of strategies, plans and wishful thinking but little action and delivery.

Our colleges are in a state of paralysis and locked in industrial action. There are job losses and staff morale is at rock bottom. There is little evidence that colleges have the resources to deliver on all the SNP plans and strategies, so where will the skilled labour come from to fill the jobs that the Government says will materialise with all the new opportunities? Scotland’s industries would collapse tomorrow if they were not able to access skills and trades from abroad. Meanwhile, education is going backwards, resulting in school pupils not getting the knowledge and qualifications that they require to advance to the apprenticeships that exist. That is why we have a skills shortage in near enough every part of our economy.

Members do not have to take my word for that; they just need to speak to employers anywhere in Scotland and ask them what the main challenges are. They tell us that the main challenge is the inability to recruit skilled labour. We must move beyond the rhetoric and give our children an education, skills and the chance to gain quality jobs for the future. Otherwise, those pupils will not get that access.

The Scottish Government is correct to assert that a just transition is vital to tackling the climate emergency and building a secure future for the Scottish economy. However, the future workforce sits alongside that. If our colleges are buckling under the pressure, our schools are in serious trouble and children are not getting opportunities, are we building a workforce for the future or are we dependent on bringing that workforce from abroad?

Photo of Patrick Harvie Patrick Harvie Green

It comes down to the case that we are making for large-scale investment. I hope that we have common ground with Scottish Labour, which will press an incoming Government to bring the scale of investment that is required. However, we should also press that Government on restoring freedom of movement, because that, too, is a critical part of addressing the skills shortage in many parts of our economy.

The Presiding Officer:

You must conclude, Mr Rowley, as we are over time.

Photo of Alex Rowley Alex Rowley Labour

I think that even the Conservatives in the chamber will accept that we will have a change of Government. That Government will bring investment, but it is crucial that we use the powers that we have in the Scottish Parliament to tackle the skills shortages and start to give every child in this country the opportunity of skills, a decent education and the opportunity of a well-paid job. That has to be our priority.

Photo of Murdo Fraser Murdo Fraser Conservative

I will start on a note of consensus. All parties in the chamber welcome the opportunity to develop Scotland’s green economy, want to celebrate its current strength and want it to continue to grow and create secure and well-paid jobs for the future while helping us to meet our ambitious climate change targets. On those points, we all agree.

However, it is regrettable that, in many of the speeches that we have heard from members on the SNP benches, the focus seemed to be not on addressing what the Scottish Government is doing but, rather, on criticising the record of the UK Government. As Brian Whittle reminded us, under a Conservative Government, the UK is making faster progress on reducing carbon emissions than any other country in the G20.

Photo of Murdo Fraser Murdo Fraser Conservative

In a second.

We are the first country in the G20 to halve our carbon emissions. We are genuinely a world leader among major nations.

Photo of John Mason John Mason Scottish National Party

However well the UK is doing, would it not be doing better if there was more capital investment?

Photo of Murdo Fraser Murdo Fraser Conservative

I wish that, instead of being quite so grudging, Mr Mason would at least celebrate how well the UK is doing. We have to look at what other countries are doing, too, and we are leading the world. Why can we not just celebrate that?

Those ambitious targets are, of course, being backed up with hard cash. Back in September, we had an announcement by the Prime Minister of £2 billion for the green climate fund, which is the single biggest commitment of its kind that any UK Government has ever made.

We heard earlier in the debate from Mr Simpson, who, with his usual forensic and laser-like focus on numbers, set out all the cuts in the Scottish Government’s budget, one after the other, in areas in relation to this portfolio. There was a very interesting exchange between the cabinet secretary and Mr Simpson about the overall size of the Scottish budget. Mr Simpson quite rightly quoted the Scottish Parliament information centre briefing, which shows that the Scottish Government’s budget is up, in both real terms and cash terms, since last year, which was very helpfully confirmed by Michelle Thomson through her intervention from the back benches. Even the SNP’s own back benchers do not agree with the cabinet secretary’s analysis or the Scottish Government’s position.

Photo of Michelle Thomson Michelle Thomson Scottish National Party

I am enjoying the joke that Mr Fraser is making—I know that it is a joke—but let us be absolutely clear that 0.9 per cent is not something to write home about. Let us be honest about that.

Photo of Murdo Fraser Murdo Fraser Conservative

I say to Michelle Thomson that it is still a real-terms increase.

I am glad that she recognises that, even if members of the SNP front bench do not.

As we heard in the debate, a lot of good work is going on and there is a lot of expansion, particularly in offshore wind developments around the UK coast and particularly here in Scotland. The UK Government has invested £110 million in offshore wind manufacturing in Ross-shire, creating jobs and supporting a vital industry. That expansion is supported by a tax and regulatory regime that is designed to encourage investment.

We heard from SNP members about the contracts for difference policy. Mr Macpherson, for example, referred to it That policy is, of course, there to ensure value for money for energy bill payers. The UK Government can hardly be criticised for trying to drive the cost for offshore wind down as low as possible under contracts for difference. It is something of an irony that the very people in this chamber who constantly demand more action to reduce energy bills are exactly the same people who criticise the UK Government for trying to do just that through the contracts for difference regime.

The Presiding Officer:

There is no extra time.

Photo of Neil Gray Neil Gray Scottish National Party

Murdo Fraser’s generosity is noted and appreciated.

A balance has to be struck in the allocation rounds for contracts for difference. I hope that we will see an increase in the quantum for AR6, as there has been an increase in the strike price.

However, for Murdo Fraser’s line to be consistent, he must be incredibly disappointed at the strike price that has been achieved for nuclear and, as we have heard this week, the extra £1 billion that is having to go into the Sizewell C project, which will increase bill payers’ costs incredibly.

Photo of Murdo Fraser Murdo Fraser Conservative

I gently say to the cabinet secretary that he needs to sit down with an energy economist and discuss with him the whole-system cost of different types of energy production. When we take an intermittent source of energy, such as wind, we have to factor in the additional costs for storage, transmission and, potentially, back-up from fossil fuel-burning stations, whereas nuclear provides base load and is therefore in a different category. Look at the whole-system cost, cabinet secretary, and it gives a different position.

Let us move on and consider ScotWind. Rhoda Grant reminded us of the scandal of the ScotWind round. Some estimates say that the Scottish taxpayer has lost out on £60 billion of potential income because of the Government’s mishandling of the ScotWind bidding process. Yesterday, we learned from the Cabinet Secretary for Finance that £750 million has been taken from the money that was raised by ScotWind to fill the black hole in the Scottish Government’s budget for the coming year. That is a one-off capital windfall being used to fill a revenue black hole. For years, we have sat in the chamber and been lectured to by SNP members about previous Westminster Governments—Conservative and Labour—not using oil revenues to establish an oil fund for the future. They are now doing exactly the same with the ScotWind money. They are using it to fill a black hole in the budget instead of building for the future.

I am very short on time, but I will try to cover a few more points briefly. I am sorry that we do not see more investment in new nuclear, as Douglas Lumsden said. The new technology is coming on. Small modular reactors are being developed by the likes of Rolls-Royce, and they have a real opportunity in Scotland. Here, in Scotland, we have expertise in the nuclear power industry that is unsurpassed in many other parts of the world. What a shame that we are missing out on those opportunities and those jobs.

There is still a role for oil and gas, as Douglas Lumsden and Fergus Ewing said. We will continue to need oil and gas, even after 2045, and it will still have a role with carbon capture and storage. We should not be turning our back on it as the SNP and Labour would do.

We also need a proper workforce plan. Alex Rowley and Brian Whittle made the point that we will need many more skilled workers, but the Government has no plan to train them. Where will the 23,000 additional trained technicians come from to install domestic heating systems, for example? We have no idea.

There are big gaps in the Government’s plan. Our approach is summed up in the amendment in the name of my colleague Douglas Lumsden, and I am pleased to support it.

Photo of Patrick Harvie Patrick Harvie Green

There has been a little bit of fairly predictable knockabout stuff in today’s debate, as usual. Perhaps it is inevitable—we all do it sometimes. However, I will start by stepping out of character a little bit and agreeing with something that Fergus Ewing said—yes, it happens once in a while. Fergus Ewing was right when he said that those who simply make speeches saying how wonderful or awful the Scottish or UK Government is and that kind of simplistic knockabout stuff are not rising to the occasion. The debate was intended to set out the urgent need for a scale of investment, both state and private, that would rival the likes of the European green deal and the US Inflation Reduction Act 2020.

Some members did rise to the occasion and engaged with the deep question— not just about what is happening with Scottish Government or UK Government policy, but about the context of the UK economy. Could Scotland do it better? Will an incoming UK Government do it better? That is about the scale of the challenge and the investment that will be necessary if we are going to recognise that addressing climate change is not just a necessity—the greatest challenge of our age—but an enormous opportunity for Scotland. That is why it is one of the three defining missions of this Government.

The cabinet secretary highlighted some hugely positive developments, and I will do the same. In the 20 years that I have been an MSP, we have seen a revolution in renewable electricity. Twenty years ago, a little more than 300 sites were generating electricity from renewable sources in Scotland. That compares with 130,000 sites today. In the next 20 years, other areas, such as green hydrogen, have the potential to mirror that scale of growth. To deliver that, we need not just investment but the right environment for the relevant businesses to grow in the right way and respond to those challenges. That means clarity, stability and long-term horizons. That is at the heart of what I am seeking to do in my portfolio in heat and buildings, to support Scotland to transition away from a volatile fossil fuel market to a clean energy future.

At the end of last year, we consulted on a proposed legal backstop for decarbonising our homes and buildings, which sent a clear signal of intent that all homes and buildings will use clean heating by 2045. The response to that has been positive. The chief executive of the UK Climate Change Committee called it a template that could be followed by other parts of the UK. The Aldersgate Group, whose members include National Grid, Scottish Power and Lloyds Bank, welcomed the clarity that our proposals provide and the potential benefits to the economy of upgrading our housing stock. That contrasts clearly with the damaging signals that the UK Government has sent out.

There is, of course, far more to do. We need to continue to grow our skills, our capacity and our supply chain. We are already making changes to improve the application process, which Willie Rennie referred to, and there will be further developments on that later this year. Our proposed heat in buildings bill will also further increase the investment that has been happening, which has led, for example, to the employment of 1,800 people in a heat pump factory in Scotland, as a result of a choice by a global business to base that part of its operation here.

Across Scotland, a great many businesses, new and old, are seizing the positive opportunities that come from manufacturing the products that will be needed, skilling up their workforce and investing for the future. The bill will create—

Photo of Brian Whittle Brian Whittle Conservative

I am grateful to the minister for giving way. Does he recognise that there is a gap between the high skill set that exists in the oil and gas sector and the skill set in the renewables sector, and that, if we do not bridge that gap, we will lose that highly skilled workforce abroad?

Photo of Patrick Harvie Patrick Harvie Green

We are already seeing people transition across—there are many examples of that—and we should support them to do so. When it comes to the heat in buildings agenda, the gap in skills between people who install fossil fuel systems and those who will install, or are already installing, heat pumps is relatively small and that can be met easily, quickly and cheaply.

The opportunities across our economy are huge, and we have a great deal to build on, whether that is in decarbonising our homes, which I mentioned, in onshore and offshore wind or in green hydrogen. Several members have mentioned some of the issues around planning and consenting. A great deal of work is already being done on that, some of it under the auspices of the onshore wind sector deal, and there is a great deal more besides. I am sure that the minister with the relevant portfolio responsibilities will want to update colleagues on that as it continues to progress.

We need the UK Government to share that ambition as well. We have seen other Governments seek to rise to the challenges that exist in this area. I have mentioned the Inflation Reduction Act, as a result of which $369 billion is being provided in tax credits, subsidies and loans. Through its green deal industrial plan, the EU has pledged to mobilise at least €1 trillion of investment to build industrial capacity in green technologies and accelerate the transition to net zero. Scotland could and should be among the countries that are responding at that scale.

Photo of Sarah Boyack Sarah Boyack Labour

In the context of that process, will the minister reference Grangemouth, given the new opportunities for existing staff that the green transition, and the opportunity to use that site for that transition, will provide?

Photo of Patrick Harvie Patrick Harvie Green

Yes, indeed. A strong case for Grangemouth has been made by a number of members. The workforce there needs investment in its future. Information on that has come into the public domain and has appeared on Scottish Government social media during the course of the debate. I do not have that information right in front of me at the moment, but during the day more will have come into the public domain about the work that is taking place there.

What do we have as part of the UK, instead of having the ability to make macroeconomic choices about the scale of investment for ourselves? We have a Prime Minister who sees climate change as the latest front in a culture war that he wants to provoke. His notorious speech in September signalled to householders and businesses alike that climate change is basically dispensable and that the economic opportunity of net zero is to be ignored.

The former chairman of the UK Government’s own net zero review, Chris Skidmore, who is departing Parliament in dismay at the Government’s climate reversals, said that diluting green policies would

“cost the UK jobs, inward investment, and future economic growth that could have been ours by committing to the industries of the future”.

He also said:

Rishi Sunak still has time to think again and not make the greatest mistake of his premiership, condemning the UK to missing out on what can be the opportunity of the decade”.

I think that he was right. His position contrasts with the arguments of the Conservative Party’s net zero scrutiny group and Mr Sunak’s policy reversals. Indeed, this week it has been reported that the UK Government’s net zero secretary has taken cash from a funder of climate denial lobbyists. The UK Government’s position is a mess.

Therefore, attention must turn to a change in Government and the opportunity that that might offer to develop an approach that stands comparison with what we see in the USA and the European Union.

Back in 2021, the UK Labour Party seemed up for that, proposing a £28 billion annual green prosperity plan, which would have been additional investment from the outset. That would have been extremely welcome. I hope that Labour MSPs will put pressure on the UK Government to stick with that original plan of £28 billion additional investment from the outset.

The First Minister has engaged with that. In his letter to Keir Starmer, he argued that

“Scotland’s transition to Net Zero represents a huge ... opportunity for the country, but one which ... requires action by both governments”— so that, for example,

“other parts of the UK can benefit from Scotland’s huge renewable energy resources”.

However, hardly a week now goes by without more chipping away at the £28 billion commitment. A funding commitment that was additional is now the total commitment. First, it was a pressing priority, then Labour said that it might be achieved by halfway through the parliamentary session and then it was to be the second half of the parliamentary session—it could be as late as 2029.

We will support Labour’s amendment, but we do so on the basis that Labour must expect that its support for our motion signals its support for that full £28 billion of additional investment that is outlined in our motion—

The Presiding Officer:

You must conclude, minister.

Photo of Patrick Harvie Patrick Harvie Green

—and that Parliament expects it to support the delivery of that package.

In closing, let us recognise that even that level of investment is at the bottom end of the 1 to 2 per cent figure that the United Kingdom Committee on Climate Change has recommended and that it would not bring us up to the level of investment in the economy overall that we have seen in countries such as the US and across the EU—

The Presiding Officer:

I must ask you to conclude now, minister.

Photo of Patrick Harvie Patrick Harvie Green

I support the motion in the name of the cabinet secretary and send that clear signal not only to the current UK Government

The Presiding Officer:

Thank you, minister.

Photo of Patrick Harvie Patrick Harvie Green

— at the tail end of its term, but to those who are incoming as well.

The Presiding Officer:

That concludes the debate on investing in Scotland’s green economy.