The next item of business is a debate on motion S6M-14689, in the name of Claire Baker, on behalf of the Economy and Fair Work Committee, on the just transition inquiry for Grangemouth and the north-east and Moray. I invite members who wish to speak in the debate to press their request-to-speak button.
14:51
I welcome the opportunity to open the debate on behalf of the Economy and Fair Work Committee. I highlight the committee’s two just transition reports, focusing on the Grangemouth area, and on Moray and the north-east of Scotland. I thank all those who contributed their views, the witnesses who gave evidence and the community groups and representatives who met us. I also thank the Just Transition Commission. Its briefings during the inquiries were invaluable and its publications support members’ on-going understanding and scrutiny.
We know that economic transformation is needed to support industry to reduce emissions, phase out polluting sectors, transition to greener jobs and meet net zero targets. We want the process of transformation to create opportunities for new skilled jobs, innovation and investment, but the process also presents risks for workers and communities that rely on emissions-heavy industries and sectors.
The definition of a just transition is important if we are to be able to recognise that it has been achieved. The committee heard a number of interpretations of a just transition, and we advised that, in providing a definition, the Scottish Government should establish
“clear and measurable targets for success.”
The just transition lab in Aberdeen has created a set of indicators, including not only traditional measures but social and community impact measures of a just transition.
In both inquiries, we heard about the crucial importance of communities not being left behind as the industrial transition takes place. In both inquiries, the affected communities called for improved transport links, quality housing and investment in their towns. The communities recognised the impact of changing industry and what that could mean for them. There was clear desire not to repeat the mistakes of the past. Coherent plans must be drawn up in collaboration with communities, and there must be resources to support that.
Although two reports are up for debate, recent announcements from Grangemouth have accelerated its need for a just transition. Our first report was on the Grangemouth industrial cluster. We concluded our report hardly weeks before Petroineos announced the closure of the oil refinery in 2025.
One of the remaining large industrial sites offering significant employment, the Grangemouth refinery has been one of Scotland’s largest manufacturing sites, employing almost 2,000 people. Petroineos has said that its activities in Grangemouth account for around 4 per cent of Scottish gross domestic product. However, that is not sustainable. Parliament has signed up to ambitious targets to reduce emissions. The industrial site at Grangemouth accounts for around a third of total emissions from companies in Scotland, and Friends of the Earth Scotland states that it is responsible for 9 per cent of Scotland’s overall emissions.
The committee published its report in June last year. At that time, recognising the inevitability of change at Grangemouth, the committee reiterated the importance of the Scottish Government setting out a clear vision in a just transition plan. In its response to the committee’s report, the Scottish Government referred to its 2022-23 programme for government, stating that it sets out
“a clear mandate to deliver a Just Transition Plan for the Grangemouth Industrial Cluster”,
and that that commitment is reiterated in its 2023-24 programme for government. The committee is therefore disappointed that the plan is still awaited.
The Scottish Government has committed to bringing forward the plan by the end of this year. However, while we have been waiting for that plan, a transition that looks pretty unjust is happening before our eyes. The committee did not anticipate, so soon after its inquiry, the announcement by Petroineos that the refinery would cease operation with the loss of hundreds of jobs. Although it is recognised that, if we are to achieve a shift to a low-carbon economy, Grangemouth in its current form has a shortened life expectancy, the sudden announcement of the refinery’s closure was a shock.
During the committee’s inquiry, Petroineos declined to give evidence to us, despite a number of invitations and a visit to the site. During our work, the committee was not made aware of the company’s plans for the refinery to close in the timescale that it has laid out.
I acknowledge that, following the announcement last November, Petroineos accepted an invitation to attend the committee, and attended in December. At that time, there were hopes, certainly among politicians and workers, that operations could continue beyond next year to allow more time for a green alternative to be established at the site. However, last month, it was announced that the refinery will close next summer, with the loss of 400 jobs, and, undoubtedly, with many more job losses in the wider supply chain. Converting the site to an import terminal will safeguard some of the workforce but with significantly fewer jobs than currently exist.
Against that backdrop, it is even more important to highlight the committee’s work and to emphasise how crucial it is that the Scottish Government has a meaningful just transition plan for the Grangemouth area. Recent remarks by the Just Transition Commission are sobering. In July, it said:
“the current path will not deliver. The limitations of collective efforts to date are nowhere more clearly in evidence than at Grangemouth, which presents an acute challenge for applying a just transition approach, given the central role of a privately owned company and foreign state-owned enterprise”.
There has to be greater direction and leadership in the bodies that have been established to support the transition locally. There has been confusion over the role of the Grangemouth future industry board. Although the board now has broader membership and is ministerially led both by the Scottish and UK Governments, one of its key roles is to implement plans that are still being prepared. Change is under way but plans risk being out of date before they are published.
Following last month’s confirmation that the refinery will cease operations next year, the committee acknowledges and welcomes the announcement from both Governments of a support package that is focused on local investment and employment support. However, there is an urgent need for a long-term plan. The Scottish Government’s advisory body, the Just Transition Commission, has emphasised the need for effort to be
“adequately resourced and approached as an urgent priority of national importance”.
The Economy and Fair Work Committee echoes that call.
In addition, delays in bringing forward Scottish Government strategies, such as the energy strategy and the just transition plan, regional just transition plans and the climate change update plan, have been frustrating. Delays have an economic impact on business, investor confidence and community action.
Following the committee’s work on Grangemouth, we turned our focus to a just transition for the north-east and Moray, and in particular to the Scottish Government’s just transition fund. The north-east is home to Scotland’s oil and gas production, generating significant economic activity and energy supply, and the sector supports 65,000 jobs in the region. I thank Aberdeen City Council, the Aberdeen arts centre and the Port of Aberdeen for hosting the committee, and I thank all the community activists and members who took the time to share their views.
In 2021, the Scottish Government established a 10-year, £500 million just transition fund specifically for the north-east and Moray. The Scottish Government has no other region-specific fund, either for the Grangemouth area or for any other area, and we wished to scrutinise the effectiveness of that fund.
The stated aim of the fund was to identify
“key projects, through co-design with those impacted by the transition to Net Zero, to accelerate the development of a transformed and decarbonised economy in the North East and Moray.”
During our inquiry, we heard concerns about the future of the fund. A total of £12 million was allocated to the fund during the current financial year, in comparison with £50 million last year. We recognise the Government’s stated commitment to the fund, but there are questions over the fund’s sustainability, given its current reliance on financial transactions.
There were also concerns about the type of funding and how accessible the fund is, especially to not-for-profit and community organisations. The use of financial transactions presents restrictions and constraints for many applicants. The committee supported calls for the Scottish Government to look further at the possibility of multiyear funding to allow for longer-term planning and certainty. It also supported calls for a mix of sustained revenue and capital funding, with sufficient revenue funding to support capacity building in communities to access the fund.
Skills featured in both inquiries, and the committee reiterates its concerns about the 24 per cent cut in the employability budget—concerns that were echoed by the Fair Work Convention at committee yesterday. The suspension of the flexible workforce development fund and the decrease in apprenticeships are also concerning.
The committee recognises the need for greater focus on developing and reskilling our current and future workforce for the transition, and calls on Government to provide greater focus and direction in that area, and for there to be greater coherence across Government to that end.
Both inquiries were concluded before the United Kingdom general election, and we now have a new Westminster Government. In those inquiries, and in the other work of the committee, we have recognised the scale of investment that is required and the need to leverage finance.
We await the impact of GB energy, and I urge the Scottish Government to work co-operatively with the UK Government on the significant challenges that we face in achieving a just transition. I recognise that the cabinet secretary shares that view.
I look forward to the rest of the debate. On behalf of the Economy and Fair Work Committee, I move,
That the Parliament notes the conclusions and recommendations contained in the Economy and Fair Work Committee’s 4th Report, 2023 (Session 6), Inquiry into a Just Transition to net zero for the Grangemouth area (SP Paper 405), and its 4th Report, 2024, (Session 6), Inquiry into a Just Transition for the North East and Moray (SP Paper 556).
I call Alasdair Allan to speak on behalf of the Scottish Government for a generous eight minutes.
15:00
The Scottish Government welcomes the Economy and Fair Work Committee’s recent inquiries into a just transition for Grangemouth and for the north-east and Moray. I extend my sincere thanks to members and staff of the committee, as well as to all those who provided evidence to both inquiries.
As we are about to embark on a discussion that will, in part, concern Grangemouth, it would be remiss not to start by addressing the on-going situation there, following the recent announcement that the Grangemouth refinery intends to cease operations in quarter 2 of 2025, as Claire Baker referred to. That is clearly concerning for the workforce and the wider community, and I echo the First Minister and the acting Cabinet Secretary for Net Zero and Energy in paying tribute to the refinery workforce, which has been critical in maintaining Scotland’s fuel security over many decades.
We are working tirelessly, alongside the UK Government, to do all that we can to support those who have been impacted by the recent announcement. That is why we announced a tailored support package, which included £20 million in additional joint funding from the Scottish and UK Governments—supplementing the Falkirk and Grangemouth growth deal—as well as immediate tailored career support that will help affected workers, and the £1.5 million joint funded project willow study, which will take forward credible options for low-carbon industry at the refinery site.
Can the minister explain a little more about the £20 million—the £10 million from each of the Governments? Originally, the growth deal was described as the Falkirk growth deal. Ministers have been quoted as saying that the £20 million—£10 million from each Government—is to include Grangemouth, but was Grangemouth not always included? What is the additional £20 million specifically earmarked to do?
The name recognises the fact that Grangemouth, as a community, was always included in the deal. As I understand it, that has been the purpose of the funding throughout. I say that because Grangemouth is a critical area for Scotland’s economy, and it is my firm belief that that will continue long into the future.
It is worth underlining that there is a wider industrial cluster, as Stephen Kerr knows, beyond the refinery, which we must not lose sight of. There is a group of businesses that employ some 3,000 people.
When I was reading the committee’s report, I was struck by how prescient it was about the action that was required. Given that the minister has just highlighted the wider cluster, I wonder whether he remarked on the committee’s report in the same way. Are there any issues that are highlighted in the report that the Government now thinks need to be expedited?
As I mentioned, the Scottish Government has long understood the criticality of the wider Grangemouth cluster. That is why we made a commitment to develop a just transition plan that set a clear strategic direction for the future of the whole site and recognised the need for that to change in the future. That is what project willow has been about.
Today, I will update Parliament on our decision to introduce a short delay to the development of the Grangemouth plan. It is important to separate all these things out. I have mentioned some of the direct, immediate interventions that the Scottish and UK Governments are making. With regard to the Grangemouth plan, that will allow us time to consider the recent refinery announcement and to incorporate critical evidence from the project willow study, to ensure alignment between those important pieces of work. That is distinct from, and in addition to, the more immediate work that we have just described. We will launch our consultation on the draft plan shortly, with a view to delivering the final plan in the spring of next year.
The Just Transition Commission has said that Grangemouth represents the first “litmus test” of a successful just transition in Scotland. Although the recent announcement is disappointing, I outline the Scottish Government’s unwavering commitment to delivering it, and I trust that members will look forward to engaging with the draft plan in due course.
With its report, the Economy and Fair Work Committee has carried out an essential role in providing scrutiny of all those many efforts. I look forward to discussing the committee’s recommendations and the Scottish Government’s actions in more detail, and whether further steps might be necessary in the interest of working across Parliament on a topic in which we all have a shared interest.
We are certainly under no illusions about the scale of the challenge. As we know only too well from our industrial history, poorly managed rapid transformations cause long-term damage to our society. We are absolutely determined not to repeat those mistakes of the past.
On the point about rapid transformations, does the minister have any thoughts about the recent Daily Telegraph article that reported that the anticipated volume of throughput reduction, which was set at 5 per cent, is now estimated to be 15 per cent per year, which figures have been confirmed by Ineos, meaning that the viability of the Forties pipeline will come undone much sooner—around 2030 rather than 2040 to 2050? In other words, surely we need to get our skates on even more.
The measures that I have set out and the measures that I am announcing now indicate the importance and urgency that both Governments attach to intervention in this area. The Scottish Government has been able to set out its part in doing that.
I say all that because it is part of Scotland’s world-leading approach to just transition. We must make sure that that is embedded in our climate change legislation and in our independent body that we have established to advise on and scrutinise our work. We are now setting out to co-develop just transition plans for our key sectors, sites and regions.
Will the minister give way?
I hope that the member will forgive me, but I have to make progress. Perhaps later on.
There are long-term plans to support long-term outcomes. We have started the journey and must continually refine and develop our approach.
This work sits alongside a wide range of related work, such as our green industrial strategy, which was published last month, and substantial investments, including the just transition fund, offshore wind investment, the energy transition fund and Scotland’s heat network fund.
On the north-east and Moray specifically, I have noted the committee’s recommendations and make it clear that we remain committed to supporting just transition in the region through our fund. We are currently commissioning an independent evaluation of the fund’s impact, but it has already provided hundreds of fully funded training courses and direct investment into 26 supply chain companies in the region, estimated to create more than 1,200 new green jobs in the process. That evaluation will help to inform how funding can be further developed to best serve the needs of the region’s businesses, workers and communities.
We are also providing targeted support to the area through the £125 million Aberdeen city region deal and the £32.5 million Moray growth deal, as well as through the energy transition fund, thereby protecting existing jobs, skills and knowledge while supporting new job creation in the region and across Scotland. However, public funding alone cannot finance the region’s transition, and it is critical that we work closely with the private sector to realise our ambitions. The just transition fund has already directly unlocked a minimum of £10 million of private sector investment, and the £25 million of funding that has been allocated to the Scottish National Investment Bank has helped to leverage around £40 million of additional spend.
It is clear from the committee’s inquiries that both Grangemouth and the north-east are critical regions in Scotland’s energy system and wider economy today. It follows that they should have a critical role to play in the transition to net zero. The Scottish Government is committed to fairly managing the significant structural changes that can be expected to take place, and to support the workers and communities who are critical to the journey that lies ahead.
15:10
I echo the comments of the committee convener. I thank the committee clerks for their assistance, the Scottish Parliament information centre and all those who gave evidence to the committee in both inquiries on the just transition.
Like the convener, I think that we have to start by asking ourselves what a just transition is. We are seeing a shift from oil and gas towards net zero and more renewable sources of energy. In that process, we have to ensure that we protect our economy, protect jobs and protect communities. As has already been referenced by the convener and, indeed, the minister, what we are seeing with the current situation in Grangemouth raises concern that workers and the community there are being let down. What we are not seeing there is anything that could be classed as a just transition.
I was not on the committee when it did its report on Grangemouth, but I read that report with interest and I have followed the events at Grangemouth that have been referred to already. I hope that no stone is being left unturned by the UK Government and the Scottish Government in looking at how jobs might be saved.
Ineos is key to that. It is a commercial company that is acting in its own strategic interest. It might well be that not closing that refinery could be in its commercial interest if it can persuade Governments to contribute funds to try to secure its future. It would be good to know from the Scottish Government what discussions it has had with Ineos about which serious commercial options it is actively exploring, including whether a sale of the refinery, rather than its closure, is a viable possibility.
I also want to talk more generally about the issues that are faced by Grangemouth and, in particular, the north-east of Scotland, which was the subject of the committee’s second just transition report. I do not think that we should be assuming, at any point soon, the end of oil and gas. Oil and gas are still important, because we will be importing oil and gas for decades to come if we prematurely close down the North Sea. It does not make any sense from an environmental point of view to replace domestic production with imports.
Will the member give way?
I will after I make one more point.
Even when we stop using oil and gas as an energy source, we will still need it as the raw material for a petrochemical industry, because hydrocarbons are required as the basis of the manufacturing of everything that we use in modern life.
Does the member recognise that the oil and gas that is pulled out of the North Sea is sold on the international market? It is not reserved for domestic use. We already import oil and gas, because that is how international markets work. Shutting down oil production in the North Sea, in line with our climate targets—phasing that out—is necessary for us to reach our climate targets, and it will not affect how much oil and gas we import, because domestic production is not related to domestic use.
I note that Lorna Slater did not refer to the point that I made about the petrochemical industry, which is still vitally important and will be for many years to come. If we shut down the North Sea oil and gas sector, we will have to import from elsewhere the raw material for that industry.
Does Murdo Fraser agree that the likelihood of an imminent shutdown of the North Sea as a production base for oil and gas has been hastened by the reckless fantasies of Ed Miliband in the new Labour Government?
Mr Kerr makes his point very well. I will return to the committee’s report, because we took some evidence on that issue. Fergus Mutch, who was representing the Aberdeen and Grampian Chamber of Commerce, told us that decisions were being taken by Governments that were damaging the sector and that investment was being driven elsewhere following those decisions.
The energy profits levy is a good example of that. The Labour approach to that levy is to remove all allowances. According to Offshore Energies UK, that would reduce the value of the oil and gas sector by £13 billion by 2029, which puts about 35,000 jobs at risk. I say to Mr Johnson that that is not my estimate, but that of the industry itself.
The SNP is little better. Its presumption against new exploration in the North Sea will add to the industry’s woes.
I thank Murdo Fraser for giving way. One element that has not been addressed today is the just transition that will be required in the Scottish nuclear industry, if the SNP continues to shut it down. We are already seeing Hunterston B and Torness power stations being decommissioned. Is it not the case that it will not be a just transition, given that what we are already seeing at Torness in East Lothian is an unjust exodus, because people with skills are going to work in the nuclear industry elsewhere? That is clearly a loss to the Scottish economy and the Scottish skills sector.
Mr Hoy makes an excellent point. A friend and neighbour of mine in Perth who works in the nuclear industry is now based in Cumbria, because these jobs do not exist in Scotland. All we are doing is driving talent away. Scotland was once prized as one of the centres of excellence of the nuclear power industry, and that opportunity has been lost.
I will return to the committee’s report after these interesting digressions. As Claire Baker said in her introduction, the committee highlighted as frustrating the delays in bringing forward Scottish Government strategies, such as the energy strategy and just transition plan, the regional just transition plans and the climate change update. Those delays are having an economic impact on business, investor confidence and community action.
The committee also noted the lack of clarity with regard to the investment model that is required to achieve a just transition. The model references the leveraging of private capital but makes no assessment of what is realistic or whether that will be sufficient. The committee spent a lot of time looking at the just transition fund of £500 million over 10 years, which is to be administered by the Scottish National Investment Bank. That is very welcome. However, the committee was clear that clarity is needed about the fund’s sustainability. In the first year of the just transition fund, £20 million was allocated and, in the second year, it was £50 million. However, in the coming year, that drops to just £12 million. We and the affected communities need to know that the money will be there.
Will the member take an intervention?
I will give way if I have time, Deputy Presiding Officer.
Yes. I call the cabinet secretary.
I was really just going to listen, but I have to say that it is very important, when we have longer-term funds such as this, that we carry out an assessment of how the funds have worked. That is a fair exercise to undertake at this critical juncture so that we get the most value for our money in the just transition fund.
I absolutely agree with that. Of course it makes sense to assess whether the money is being properly spent. At the same time, the Scottish Government pledged that sum of money—£500 million over 10 years—and if the cabinet secretary is signalling that there has been a retreat from that pledge, that should concern us. She is shaking her head, so I will take another intervention if I have time.
Mr Fraser has maybe taken my intervention in slightly the wrong way. What I am saying is that, when you put funding in place, you must reflect on how it has been spent. When we look at how that money has been spent over the past two years, we will see where there has been most value for money, and that is the exercise that we are undertaking, because changes may be needed to how we deploy a long-term fund in order to get the best out of it.
That is helpful clarity from the cabinet secretary. We look forward to hearing more from her in due course about exactly how the just transition fund will be deployed, because that money is absolutely vital to ensuring that communities are not left behind.
If I still have some time, Presiding Officer—I see that you are nodding; thank you—I will touch on a couple of other issues in the report, one of which is planning. The committee concluded that planning constraints are one of the biggest barriers to attracting investment. SSE told us that current practice means that it takes 12 years to deliver an offshore wind farm. We will never achieve net zero or a just transition unless we start removing some of the barriers to planning and getting these developments delivered.
The committee also heard that cuts have resulted in a 20 per cent reduction in the numbers of local authority planning staff over a nine-year period. There is an urgent need for more capacity in planning departments if we are to get developments delivered.
The final point is on skills, which is a key component if we are to deliver a just transition. We need to ensure that the skills are there and that, in particular with apprentices and young people, there is a focus on science, technology, engineering and mathematics subjects.
We need more apprentices. Before the pandemic, there were 30,000 apprenticeship places in Scotland, but we are now down to 25,500. The Scottish Government has cut employability spend by 24 per cent. If this is going to work, we need a focus on the workforce and we need more apprenticeship places.
These are two very important reports. We need a just transition that is fair to all, but that will not happen without a proper focus. Above all, we should not be prematurely closing down our vital oil and gas sector. We should be providing employment within it for many decades to come.
I advise members that, in fact, at the moment, we have some time in hand. Therefore, I can be generous.
15:20
I thank the committee members and all those who were involved in contributing to the reports, because they could not have been more timely.
I acknowledge the importance of the UK and Scottish Governments working together. It has been good to hear in recent weeks that the acting Cabinet Secretary for Net Zero and Energy has been able to work with UK colleagues. It is good that both Ed Miliband and Michael Shanks have been involved and that the Governments have invested the additional £20 million on top of the £80 million in the Falkirk and Grangemouth deal.
It was also very good this morning to meet Brian Leishman, the MP for Alloa and Grangemouth, and talk to him about the work that he knows is needed now. There are opportunities, but we need action now to ensure that a just transition is delivered, because people’s jobs are on the line. We have known for years that a robust plan was needed for the future of the oil refinery, the town, the community in Grangemouth and the other industries in the area. [Interruption.]
The committee report on the north-east and Moray could not have been more timely. The committee’s recommendations were published—
Will Sarah Boyack take an intervention?
Yes. Sorry—I did not see the member earlier.
Thank you very much. I probably was not loud enough.
Sarah Boyack mentioned Brian Leishman. Is she supportive of his call on Sir Keir Starmer to nationalise the refinery?
What is critical is that Brian Leishman has been talking to the unions and is representing the area. He wants to make sure that the oil refinery does not go off a cliff edge next year, which is what is currently planned, and that is about getting the two Governments to work together and look at what the opportunities are.
With the north-east and Moray, there is an opportunity to be proactive. I totally disagree with Murdo Fraser on the points that he made.
Will Sarah Boyack give way?
No, thank you.
We will have oil and gas in the North Sea for decades, but we know that it is a declining resource, so it is about how we use that resource most effectively. It is about how we ensure that investments will still be there and that the companies there are still able to operate and, at the same time, transition to renewables.
We have not seen the investment that we really need. The fact that the ScotWind fund has been raided to fill the Scottish Government’s budget hole means that we will not see investment in supply chains in the sector. That is a problem that the Scottish Government has created.
There have been long delays to the Scottish National Party’s strategies, including the energy strategy in the just transition plan, the regional just transition plan and the climate change update. Those delays are having a negative economic impact because they create uncertainty and mean that investors do not have confidence in businesses. They make communities more and more worried.
Will Sarah Boyack give way on that point?
No. I want to get on at the moment.
If Grangemouth was a litmus test, as suggested by the Just Transition Commission, one could argue that we have not seen success to date. We will be waiting until next March to see a draft plan, which is weeks before the refineries are due to be closed. We need faster action now.
Clarity on the just transition fund is an issue. The fund faced a 75 per cent cut in the previous budget, and organisations and businesses that rely on it are now uncertain about the fund’s future, so it would be good to get more clarity on that in the winding-up speeches. The fund needs to have a clear strategy alignment. For example, if we are going to have an offshore skills passport, the just transition hub is vital. It was mentioned in the minister’s speech, but we are waiting for action and to see things delivered on the ground.
Something that came across strongly in the report that we are debating today, and from what the Just Transition Commission has previously reported, is the need to move beyond just consulting communities. They really need action now. In her summing-up speech, perhaps the cabinet secretary could tell us not only how the Government will work with communities, but how it will involve them in the action that will be taken.
An issue that has been mentioned to me is the fact that we are going backwards on employability spend. As the reports say, we need to reverse the 24 per cent cut in employability spend. There are small businesses that cannot afford the cost of retraining because of the cost of courses and the time that would be missed from work. That is a real problem for them. Therefore, it is vital that help is provided on the ground for the workers and small businesses that want to participate in the transition and are ready to do so. They need support.
It is important that we look at how we could invest in communities now. There is great potential in Grangemouth in particular. We have an opportunity to invest in the community beyond the refinery, as Daniel Johnson said. The Grangemouth inquiry report mentions the flood prevention scheme, which has not been completed; in fact, it has not even been started. That scheme needs to be accelerated. There also needs to be investment in Falkirk Council—
Will the member take another intervention?
Briefly.
I simply point out that initiatives such as the flood prevention scheme are being critically constrained by cuts in the Scottish Government’s budget. There has been a 20 per cent reduction in capital. Can Sarah Boyack commit to an increase in capital so that those vital projects can go ahead?
I am not the Chancellor of the Exchequer, as the member knows.
The point that I had been about to make was that, over the past decade, our local authorities have experienced massive cuts, and Falkirk Council is itself worried about the flood prevention plan.
Let us look at the skills hub and Forth Valley College. The committee and the Just Transition Commission have recommended that action be taken now. Homes and businesses in Falkirk need that investment. Young people who are currently at school could have jobs in local supply chains under the 10-year plan. Action needs to be taken now so that that is delivered.
I also want to thank the committee for highlighting the importance of getting women involved in jobs and training in the just transition and the renewables industry. That is key, but we need action now.
What the committee said about using public procurement is also important. That we should develop local supply chains seems like a no-brainer. That way, we will ensure that jobs and skills do not simply stay in Scotland but will be created in Scotland.
Therefore, there are opportunities, but there are also challenges—
Will Sarah Boyack take an intervention?
No, thank you.
It will take political will, investment and immediate action to make those opportunities a reality. The SNP has not gone far enough or used its powers sufficiently and, when they were in government, the Tories did not even begin to step up to the challenges in Grangemouth and the North Sea that are now faced by the communities, the workers and the businesses. Support is needed now. It is beginning to come, but we need more.
Scottish Labour is committed to working with the trade unions and industry to deliver a truly just transition for workers in Grangemouth, the north-east and Moray—
Will Sarah Boyack take an intervention?
The member is concluding.
—and right across Scotland. The alternative option is continued failure, but the people of Scotland deserve more, and Scottish Labour will not let that happen.
15:28
I thank my committee colleagues and the clerks for their work on reviewing both of the just transition plans.
The announcement on 12 September that the Grangemouth site will close next summer is a brutal blow for the community. As my colleague Gillian Mackay, who grew up 200 yards from the refinery, said on that day:
“All of us in the town know somebody who is employed directly or indirectly by the refinery. They’re the ones now suffering. A lot of people will be devastated, angry and extremely worried about what will happen next. I am too, I feel the same.
This is the opposite of the just transition that is needed for the site and for Grangemouth. We have known for a long time that change is needed. Lessons have not been learned from other closures like Longannet.
Successive Scottish and UK Governments should have taken action to provide a transition that put workers first. Grangemouth is now paying the price of that inaction.
The workers at the site are some of the most talented and skilled anywhere in our country. They deserve so much better than the appalling way they have been treated by INEOS.
We can’t allow local workers or their families to be left behind at the whim of a billionaire. If Jim Ratcliffe had any concern for the wellbeing of the community, he would be in Grangemouth today looking the workers directly in the eye.
It is urgent that the UK and Scottish governments work together to secure local jobs and a long-term future for the site and the community.”
Gillian Mackay’s comments highlight two fundamental points that give us the opportunity to start setting out what a just transition is and is not. So far, this is an example of what it is not. First, Scotland’s transition to a net zero economy will require some businesses to change or close and some industries to contract.
We all knew that the Grangemouth site would not be able to continue business as usual in a net zero world. Change was coming, but instead of acknowledging that and planning ahead for that, it was business as usual right up to the point when the site’s closure was announced. What should have been a staged transition towards a more sustainable way of working and what could have been an exciting future for the workers and community has, instead, ended with last month’s devastating announcement.
I thank the member for giving way.
Lorna Slater asks what has been done to prepare Grangemouth for a new and greener future. Will she acknowledge that, through project willow and other efforts before that, the Scottish Government and others have sought to identify just such a future?
I appreciate that that work is now under way in a sort of last-minute panic, but we have known for decades that the climate crisis is coming. It is not a new thing. A just transition would not have put the people of Grangemouth into such a distressed state. We have known for a long while that it was not sustainable.
That brings me nicely to my second point about what a just transition is and is not. Allowing billionaire tax exiles to own our country’s key economic assets is a threat to our economy and communities, to the vital services that those assets provide and to the just transition.
Dr Ewan Gibbs, who is a senior lecturer in economic and social history at the University of Glasgow, has been undertaking research into Grangemouth as an instance of just transition governance, and has pointed out that the ownership pattern of Grangemouth is reasonably typical of the Scottish oil and gas sector. Petroineos is a partnership between a privately listed company and a foreign state-owned enterprise.
The 2023 parliamentary inquiry into the sustainability and just transition of the Grangemouth refinery expressed serious concerns regarding the lack of engagement by Ineos, stating that the company’s refusal to provide evidence was a missed opportunity to be transparent about its contributions to Scotland’s net zero targets. As Gillian Mackay has said:
“It has all the hallmarks of a business that having squeezed what it can out of its workforce knows it is running out of road and is looking to cut and run and to hell with the consequences.”
The Scottish Greens have long believed that public services should be owned by the public, and that the energy generation and production that are so fundamental to all our interests are no different.
I share the concerns of the parliamentary inquiry about just transition planning for Grangemouth and I support its recommendations. I have the same concerns about Scotland’s wider transition to net zero. We cannot pretend that the enormous changes to come in our journey to net zero will allow us to continue with business as usual. That was not true for Grangemouth and is not true elsewhere.
Change is coming. If we grasp the nettle by defining and planning for that change, we can also seize the opportunities and benefits of jobs, innovation and new technologies.
Lorna Slater is absolutely right that we have difficult changes to navigate at a pace at which we have not moved before, but that will surely require continued use of petrochemicals and hydrocarbons. How does she view their medium-term role in our energy mix?
I am delighted that Daniel Johnson has asked me that question, because one of the frustrating things about this conversation is that many people say that the transition away from oil and gas should be demand-led, when demand for energy is, in fact, very much managed by Government policy and by things such as the aviation industry not paying tax on its jet fuel. That increases the demand for jet fuel, thereby manipulating the market in transportation to give advantage to aviation over trains and more sustainable energy.
The implementation of rules on house building and, for example, what landlords are required to do to insulate their properties will manipulate the demand for energy. It is not good enough to say that we must keep using oil and gas for as long as there is demand. What we need to do is to drive down demand as quickly as possible, which means implementing all the other policies to make sure that we move away from fossil fuels to keep global heating as close to 1.5°C as we can.
Will the member take an intervention?
The member is bringing her remarks to a close.
It is very clear that we are about to exceed 1.5°C of global warming. That is not a safe threshold: it is a dangerous threshold for humanity.
I will wrap up, Presiding Officer. If we continue business as usual in the face of catastrophic climate change, we risk not only jobs but food production, catastrophic flooding and wildfires, loss of low-lying and coastal communities, global conflict and, ultimately, making large parts of planet earth uninhabitable. There are no jobs for anybody on a dead planet.
Ms Slater, are you bringing your remarks to a close? Will you do so now, please?
Yes, certainly.
I urge the Scottish Government and the oil and gas industry in Scotland to take the situation of the closure of Grangemouth as a warning of what will happen more widely if just transition planning is not undertaken properly and in line with the recommendations of the committee’s inquiry.
15:36
As others have done, I start by thanking the Economy and Fair Work Committee and all those who were involved in producing the reports that we are debating, which give Parliament the chance to consider the issues around the just transition that we need not just in relation to Grangemouth and the north-east, but across the country. I have long argued that the just transition will look and feel different in different communities and different parts of the country. People will experience it differently depending on where they are, what they do and the aspirations that they have.
I welcome the approach that has been taken in relation to the two reports—an approach that is being repeated in the context of the northern isles, which are represented by me and my colleague Beatrice Wishart. I will turn to some of the islands-specific issues in due course, but first I will reflect on some of the committee’s findings regarding the challenges that we face in achieving a just transition by 2045.
The focus on Moray and the north-east and Grangemouth is fitting because both those regions and communities have been at the forefront of Scotland’s world-leading role in oil and gas for decades, so they have potentially the most to lose from any transition. Equally, one could argue that they have the most to contribute, and I think that that is the way in which we need to approach the process. How do we prepare, support and empower individuals, local businesses and communities through the transition to a renewables economy? As important is how we maximise the benefits for those individuals, businesses and communities.
In that sense, the committee is right to highlight the cuts of 75 per cent to the north-east and Moray just transition fund on top of the cuts to the employability budget, which will inevitably make more difficult the delivery of the training and skills development that we all agree will be essential. Twenty-one per cent of the UK workforce have skills for which demand will grow as we transition to net zero. An estimated 3 million jobs require reskilling to support that transition so, as the committee says, it is vital that barriers to upskilling and reskilling workers be removed. The concerns that Scottish Renewables has expressed about workers having to fund reskilling out of their own pockets should be taken very seriously, and the delays to the Government’s renewables skills passport are counterproductive.
On a more positive note, I welcome the trade union proposals for skills hubs, which will further develop the ties between local colleges, industry partners and local authorities in areas such as Grangemouth and the north-east.
It is important, on a point of fact, to highlight that the skills passport is industry led. Offshore Energies UK and RenewableUK are collaborating on that, although the Government has funded part of it.
That is a helpful clarification. The delays to the delivery of that passport are clearly problematic and are holding up efforts to support the transition. The appetite among workers certainly exists, but that support will be needed.
The hub approach exists in Orkney. As an aside, I urge ministers to back the proposals from Heriot-Watt University for bursaries to support postgraduate courses in the islands, which, over recent years, have successfully helped to fill key roles in Orkney’s vital renewables cluster.
The current financial situation is difficult, but if we are serious about a just transition, we need to be prepared to will the ends as well as the means. That is why the Government’s handling of the ScotWind process and proceeds is so baffling. Having leased off seabed assets on the cheap, ministers have now plundered the revenues to plug gaps in other budgets. As GMB Scotland warned, £750 million that was earmarked for long-term climate investments has been squandered.
Michelle Thomson rose—
No, thank you.
We do not know the full extent of that but, clearly, it risks undermining Scotland’s ability to deliver any sort of transition, let alone a just one.
In my Orkney constituency, that transition is already under way. As well as Orkney’s being at the forefront of renewables development, strides are being made in reducing emissions in key sectors including housing and transport. However, those things need the Government and its agencies to step up and play their part, from helping to deliver key port and other infrastructure to supporting procurement of new ferries, the development of low-emissions aircraft, the roll-out of new housing, and provision of energy efficiency measures in existing housing stock.
All that requires partnership, shared endeavour and funding—three aspects that the Just Transition Commission has underscored. It also speaks to the need for co-design with the communities that are directly affected—which, again, the committee has rightly emphasised. On that, the Just Transition Commission’s annual report has a salutary warning. It states:
“People at Grangemouth have become used to ‘warm words’ via extensive consultative processes and engagement from government, however this has yet to translate into a long-term plan that rebuilds broken trust and provides workers and residents in the town with a high level of assurance and security regarding the future of Grangemouth.”
We have heard some of that so far in the debate.
It is not good enough. Change requires trust, which can exist only when there is transparency and a shared understanding of actions and—which is important—timeframes. Scottish and UK ministers must collaborate, which Sarah Boyack rightly alluded to, but they must also be able to walk their talk.
Delays to the Government’s updated energy strategy and just transition plan do not help, as Murdo Fraser and Claire Baker pointed out. Without clarity, people and businesses cannot make informed decisions about their futures; neither can investors about the investments that they wish to make.
It also leads to understandable frustration in places such as Grangemouth, where community leaders have talked of a historic unjust transition. Malcolm Bennie of Falkirk Council noted
“a tension between it being a place that is doing incredible commercially successful things and it having a community that is not benefiting”—[Official Report, Economy and Fair Work Committee, 8 March 2023; c 2.]
Despite hosting Scotland’s largest industrial estate, which accounts for 4 per cent of gross domestic product, Grangemouth includes five areas that are among Scotland’s most deprived 20 per cent. That cannot be right.
Meanwhile, Moray experiences some of the highest levels of fuel poverty, despite possessing an abundance of onshore and offshore wind and land for carbon sequestration. That complaint finds a faithful echo in the islands that I represent. In order for any transition to command the public support that is required to deliver changes that will, at times, be difficult, that sort of imbalance and unfairness must be addressed.
I will make one final point in relation to the delays and uncertainty that I referred to. Petroineos’s announcement last month was undoubtedly a hammer blow, but it was hardly a surprise. I recognise and welcome the obvious collaboration between the UK and Scottish Governments. Claire Baker is right, however, to highlight concerns over the delays in coming forward with hard and fast decisions.
Meanwhile, when I recently met the joint chairs of the Just Transition Commission, the point was made that we cannot afford to wait until the announcement of a closure before acting to develop new roles that help us along the way to meeting our climate change targets. The committee has provided some useful pointers for how we might avoid that in the future. However, although it is important that we continue to have debates such as this one, we must press ahead with far more focus on detailed action plans, investment and delivery.
We move to the open debate.
15:44
As the speakers before me did, I thank everybody who took part in the inquiries—in particular, the community activists who we met during the course of the north-east and Moray inquiry.
There has been some debate already on what we are speaking about when we talk of a just transition. Lots of folk have said, “What does it actually mean?” Greenpeace has given us a very simple answer:
“A ‘just transition’ means moving to a more sustainable economy in a way that’s fair to everyone—including people working in polluting industries.”
Even organisations such as Greenpeace recognise that workers and jobs must be at the heart of the issue. Without jobs, we will not have a robust economy or secure communities.
Will the member take an intervention?
If Mr Johnson will let me continue, I will let him in shortly.
This is not Scotland’s first transition. We have seen this show before; there were steelworkers in Motherwell and mineworkers in pit villages up and down Scotland who were part of unjust transitions. We cannot allow Westminster, which is now under Labour, to do to oil and gas workers what Westminster did to miners under Thatcher.
I agree with much of what Kevin Stewart has just said. We might define what a just transition looks like, but the problem is that people do not see the practical pathways to that transition now. Does Mr Stewart agree that it will require all tiers of Government—UK, Scottish and local—to provide those practical pathways for people through that transition?
I agree that there need to be practical pathways, and I will come on to those. I agree, too, that there needs to be a huge amount of co-operation as well as resourcing. Most importantly of all, everyone in the chamber, and everyone in the UK Government, needs to listen to the experts as we move forward. I turn to the words of such experts now.
Professor John Underhill, director for energy transition at the University of Aberdeen, says that we must avoid repeating the mistakes of the past, such as those that affected the miners and the steelworkers. That view is shared by Sharon Graham, the general secretary of Unite the union, who estimates that Westminster’s current plans for oil and gas will cost 30,000 jobs, while others estimate that that figure might be up to 100,000 jobs. We must ensure that we listen to the workers, the industry and the academics, who are united in what they are saying. The committee’s report, which is immense in some regards, says that we have listened. However, we need to continue to listen.
Just today, Wood Mackenzie published a report—one of many there have been of late—which says that the UK Government has created
“unparalleled sector uncertainty and consternation”
and argues for an equitable system before the impact on investment becomes irreversible. We need North Sea workers for the new jobs that we are creating. We cannot have a situation where people are chucked on the dole, as has happened in the past. We must ensure that the transition is the right one.
Will the member take an intervention?
I will, in a minute.
We must remember that £400 billion has flowed from the North Sea to the Treasury during the oil years. It is time for some of that money to come back, to be invested in the just transition. We have already seen the Labour UK Government backtrack on its promised £28 billion-worth of green investment. That investment needs to be brought to the fore in the forthcoming budget.
Kevin Stewart has focused quite a bit on criticisms of the UK Government, which is entirely appropriate in some instances. Does he agree that the transition for those workers has been made markedly more difficult by the cuts that we have seen being made to the employability and skills budgets over recent years?
I have to say that the cuts to the employability and skills budgets are grim, but the cuts to the Scottish budget from the UK are also grim, and we have to let the axe fall somewhere because the axe has been taken to us. I hope that Rachel Reeves, during the course of her budget considerations, will choose to end austerity and start investing, and that the Scottish Government gets a much bigger budget than previously.
Ms Reeves also needs to examine the situation with the energy profits levy and, in particular, the closure of investment allowances, which puts a lot of the transition and jobs at risk. We need resources to ensure that just transition. I am pleased that the Scottish Government has come up with the just transition fund, but the UK Government needs to do likewise. Some £400 billion has flowed south to the Treasury. It is time for some of that money to return.
Will the member take an intervention?
The member will not, because he must conclude.
I apologise to Michelle Thomson.
Some of that money needs to flow back so that we can create jobs, create a sustainable net zero future and ensure that we do not make the mistakes of the 1980s under the Tories.
You must conclude.
Labour must not make those same mistakes.
15:51
I, too, thank our colleagues on the Economy and Fair Work Committee for bringing this debate to the chamber and for the reports that they have produced and laid before Parliament. Given that I represent the people of Central Scotland in this Parliament, I hope that it will be understood that I will focus my remarks pretty exclusively on the situation in Grangemouth.
These are deeply worrying times, and I have to say that one of the central messages of the Just Transition Commission report, which has been mentioned a few times already, was that people in Grangemouth and the Falkirk area do not want more warm words.
There is no need to rehearse the economic impact of the closure of the refinery, but it is worth assessing briefly how we have arrived at this situation. The refinery is 100 years old—not every component is 100 years old, but it has been there for 100 years. Although large sums of money have been invested, the age and the scale of the refinery mean that it is no longer considered by its current owners to be commercially viable. Although that is tremendously disappointing, it is hardly a surprise, because the bulk of oil refining is now centred on large-scale refineries, mostly in Asia. It is not a surprise that the owners of the refinery have decided that it is more economically viable to take it out of production and replace it with an import terminal. However, I have grave concerns about all of that—I have grave concerns about our energy security and about losing the capacity to refine oil in Britain. That is a slippery slope.
The global market is incredibly competitive for capital, and smaller refineries such as Grangemouth are losing out.
I notice that Mr Kerr is just a few chairs away from Graham Simpson, who I know will agree with this point. Does Mr Kerr agree that the issue is about not just the loss of capacity but the loss of potential? We will need biorefineries, and Grangemouth would be an excellent location for such a facility, but we are going to have a gap. Once it closes, it will be much more difficult to establish such a biorefinery in Grangemouth. Is that not the real issue?
I will come on to that in a moment, but I want to set out the context of these decisions first. The global context needs to be considered, but I also want to talk about the impact of our net zero strategy.
We have effectively passed laws in this jurisdiction to end the business of the refinery. We cannot pass laws that will, in effect, make it illegal to sell new petrol or diesel cars and vans and then feign shock and surprise when the businesses that exist to produce petrol and diesel shut down operations in our market space.
Stephen Kerr will be aware that the company concerned has—indeed, as he has just set out—blamed its decision on the global situation and not on Scotland stopping selling vans that are powered by petrol. Just for the sake of accuracy, Mr Kerr might wish to reflect on what the company has actually said.
That is a stretch by the minister, if I may say so.
It has not gone unnoticed by the sector that, in the past, the Scottish Greens have called for the closure of the Grangemouth refinery, yet now that they are getting their way, they come forward with all their expressions of concern for the workers and their families, and for the local economy. The fact is that the Bute house agreement created a hostile policy environment for the oil and gas sector as a whole. It is, therefore, quite difficult to sit and listen to Kevin Stewart and to stomach what is verging on hypocrisy, when he express his support for oil and gas, as the SNP now desperately reverses its previously spelled-out positions on oil and gas and its hostility towards them.
Will the member give way?
I will give way to the member, as I have mentioned him.
I have not reversed my position in any way, shape or form.
Let us turn to Grangemouth, as it is extremely important that we find a sustainable future for Grangemouth. One of the things that has held back progress in changing the way of working at Grangemouth is the previous UK Government’s inability—and that of the current one, too—to change regulations on hydrogen transportation and storage, for instance. Would Mr Kerr agree that that needs to move along quickly if we are to find a sustainable future for Grangemouth and other places?
There are many moving parts to the situation at Grangemouth, and on that I will agree with Kevin Stewart. However, Kevin Stewart cannot pretend to be the friend of oil and gas when the SNP’s position, as pronounced upon from the front benches, has been openly hostile, with a presumption against oil and gas licences.
Now we have a Labour Government, with Ed Miliband in charge of his fantasy energy policies, which are aimed at ending the existence of the North Sea oil and gas sector. No wonder Sarah Boyack was unprepared to take an intervention from me on that issue. Instead of listening—
Will the member take an intervention?
I will not take any more interventions, because time is against us. I wish I could, but it is not possible.
The SNP is not listening to industry voices about the effect of its swingeing higher windfall tax, with less in the way of allowances—as has been spelled out. The SNP does not seem to realise that that will cripple the flow of global capital into anything related to the North Sea. It is a reckless nonsense of a policy. Sarah Boyack praised Brian Leishman, the MP for Alloa and Grangemouth, for listening to the unions, but perhaps Labour in government should start listening to the unions, because the unions are pretty clear about where things are heading.
You must conclude now, Mr Kerr.
That is a great shame, as I have so much more to say, as usual—but there we go: that is the nature of debates in this place.
There is nothing simplistic about transition, and we should not lead people to believe that highly paid and highly skilled oil and gas sector jobs will disappear and will be replaced by new green jobs, as the track record on the creation of higher-paid green jobs is not very impressive.
Thank you, Mr Kerr.
Let us have no more warm words. Let us see some action.
Thank you, Mr Kerr.
Let us see some meat on the bones.
15:58
I, too, commend the Economy and Fair Work Committee for its just transition inquiry, which focuses on Grangemouth, the north-east and Moray. I put on record my support for a just transition. We are at a point of urgency in climate change.
I will focus my remarks on the north-east, but I very much acknowledge the evolving and distressing situation at Grangemouth. As we know, the north-east is home to Scotland’s oil and gas production, which generates significant economic activity and energy supply. The sector hosts around 65,000 jobs in the north-east and Moray. In 2019, it had a gross value added of around £16 billion, or 9 per cent of Scottish GDP.
Oil and gas will continue to be a significant part of our energy mix. Like other members, I welcome the opportunity to probe a little bit more deeply around what exactly a just transition is, the challenges in delivery and the importance of having stakeholders round the table so that we can measure and evaluate progress, inform policy and reach net zero.
The committee’s starting point was to assess the understanding of what is meant by “just transition”. Common themes emerged in evidence, such as maximising economic benefit for people and businesses, creating green jobs and moving workers from oil and gas to renewables. That very much reflects an energy focus.
However, Professor Paul de Leeuw highlighted the importance of clarifying
“what the destination is and how we can help people on their journeys as they go through them.”
He said that
“people have different starting points, and they need clarity.”
He noted that good work has already been undertaken on the just transition planning framework, which includes some “nice bullet points”. However, he felt that they were
“lovely statements, but it is not really clear what they mean for a person in the street”.—[Official Report, Economy and Fair Work Committee, 15 November 2023; c 42.]
Referring to their “Measuring Just Transition” report, Dr Daria Shapovalova and Professor Tavis Potts from the just transition lab at the University of Aberdeen described a just transition as
“a fair distribution of burdens and benefits as society and the economy shifts to a sustainable low-carbon economy. It calls for action on providing decent green jobs, building community wealth and embedding participation.”
In evidence to the committee, they pointed out that there have been
“two decades of definitions of just transition”
but that what was needed now was
“clarity in the planning process, in directions to local authorities, in investment and in the building of civil society and democratic processes”—[Official Report, Economy and Fair Work Committee, 29 November 2023; c 28.]
and an urgent speeding up of those processes.
It was evident from those and other views that were shared in evidence that, although the north-east is rightly positioning itself as a centre for energy transition, to date, the debate on just transition has derived from an industry context. Nowhere is that more evident than in my constituency, where a valued green space in a deprived area of Aberdeen has found itself inserted into Aberdeen City Council’s local development plan as an area that will support the energy transition. Locally, there is a strong feeling of dispossession, and that the development is being imposed on an already deprived community that feels left behind. However, an energy transition zone will be a crucial economic opportunity for diversification from fossil fuels. It has the potential to bring significant value for the workforce in Aberdeen and the north-east. That scenario is reflected in the committee’s report, which finds that evidence suggests that there is a feeling among some people of a disconnect between corporate interests and community wellbeing.
I turn briefly to jobs and skills, which is perhaps the most straightforward set of indicators for a just transition but, as others have said, it is utterly crucial to it. Key to securing a skilled workforce will be the acquisition of skills, and reskilling into low-carbon jobs. Historically, oil and gas jobs have been characterised by high levels of education and skills, and a transition to low-carbon jobs will require similarly high levels of education and skills. Evidence to the committee highlighted challenges right across the industry. The urgent need for skills mapping was highlighted by SSE, which spoke of the need for
“green energy training academies ... to make it easier for people to transition from high-carbon to low-carbon industries.”—[Official Report, Economy and Fair Work Committee, 15 November 2023; c 10.]
There is a welcome body of work on mapping skills shortages in STEM and engineering-related occupations. The committee report highlights SSE’s concerns about the urgent need for skills mapping. I note the OEUK’s report, “Energy Industry Skills Landscape Study”, which was published this week. It acknowledges the creation of the Scottish Government’s plans for post-school education and skills reform, but highlights that it is a critical moment for the industry, Governments and stakeholders to work together to secure our skilled workforce of tomorrow. That point was articulated well by Professor de Leeuw, who spoke of the criticality of timing, and of getting people ready for the wind sector where and when they are needed. As other members have highlighted, that is crucial to the delivery of our green industrial strategy, just transition plan and other strategies. I share the committee’s concerns about the suspension of the flexible workforce fund, and I hope that there is scope for that to be reconsidered. Again, I thank the Economy and Fair Work Committee, and I look forward to its next transition inquiry.
16:04
I begin by reminding members of my voluntary register of interests, and I thank the committee for doing its job and inquiring into this most critical question of our times.
Let me state right at the very outset that I do not believe, on the evidence that we have seen so far, that the transition to net zero in the north-east and Moray and in Grangemouth is a just transition at all. In fact, the workers at Grangemouth are furious. They tell me that they feel betrayed, and no wonder. After the Petroineos announcement, the Cabinet Secretary for Net Zero and Energy took to the airwaves to say that the jobs transition that she wanted to see will have
“as little a gap as possible.”
A gap? If it is a just transition, there should be no gap. There should be full income protection, access to sustainable jobs, access to free education and training and new and substantial economic support for these impacted communities.
Then, when the cabinet secretary came to Parliament, she described the closure of the Grangemouth refinery as a “commercial decision”. That is a phrase that, I regret to say, I have heard Labour ministers use as well. Is closing down Scotland’s only oil refinery not a strategic decision affecting the nation’s energy resilience and security? Is it not a strategic decision of national economic importance? Would the conversion of the site from a major source of export earnings to a terminal for imports not be a matter of national economic interest? Does the minister not care about the impact on the balance of trade, and therefore on the balance of payments? Are these not manufacturing jobs? Are these not workers? Are they not worth more than that?
Last week, the 45-day redundancy consultation began. I remind everyone that the purpose of that consultation is to examine the alternatives to redundancy, and so to prevent closure. That is the purpose of it: to consider how redundancies can be reduced or avoided altogether. I hope that everyone will get behind the workforce, and will get behind Unite the union, which has explained, time and time again, that this refinery is not making a loss—it is making a profit—and which is demanding that the new Labour Government takes out a transitional stake to keep the refinery open.
Let me pay tribute to the new local Labour MP, Brian Leishman, who has been outstanding and outspoken, calling for both Governments to intervene, and for both to go further, up to and including nationalisation, to extend the life of the refinery.
At the risk of Richard Leonard twisting my words further in future debates, is he actually calling for the Scottish Government to take on the refinery wholesale, or is he also extending that challenge to the UK Government? Is that exactly what he is asking? At the moment, it looks like Richard Leonard is asking for the Scottish Government, despite the financial position that we are in, to step in and take on the refinery. Is that what he is actually asking?
Now the minister is twisting my words. What I said was that Unite was demanding that the new Labour Government takes out a transitional stake, but if Gillian Martin, on behalf of the Scottish Government, wants to volunteer to intervene in that process, I do not think that anybody would object.
This is a company that has, in the past, secured £19 million of public money from this Parliament, and has benefited from a £300 million underwriting by the UK Government. It is a company that is now seeking more money—seed capital—through the freeport initiative for land preparation at its Grangemouth site.
Here we have a corporation that is preparing to steal these workers’ jobs with one hand while reaching out to grab public money with the other, so it is about time that we started using the leverage that we have. It is about time that we started standing up to PetroChina, Ineos and the other oil multinationals, and it is about time that we started holding to account the Jim Ratcliffes of this world.
Finally, the Grangemouth future industry board was set up four years ago, but what has it achieved? Where is the economic planning? What have the Scottish Government and the previous UK Government been doing for the last four years?
That is not all. While it is true that, in recent weeks, the Government has finally published its green industrial strategy, what about its energy strategy and just transition plan? Delayed. What about the regional just transition plans? Delayed. Its climate change update—delayed. Its sectoral just transition plans due out in the summer—delayed.
It is not just delays. At the very time when we need investment, we are witnessing big budget cuts: employability spending—cut; flexible workforce development fund—cut; college budgets—cut; Scottish Enterprise budget—cut; Highlands and Islands Enterprise budget—cut; and even the north-east and Moray just transition fund—cut.
As members of this Parliament, we are not onlookers; we are participants. The Grangemouth refinery is the first real litmus test of our commitment to a just transition. So, why should any worker—out on the North Sea or at Peterhead, Burntisland, Aberdeen, Sullom Voe, Mossmorran or any other site—have any confidence that there will be a just transition for them when, on this first test, they see so much delay and so little ambition?
We have got to get this right. It is the destiny of these workers that should be uppermost in our minds.
I say to the minister that there is no time. We need to confront this directly. We need an economics where people matter and we need to build an economy not in the interests of the billionaire tax exiles but in the interests of working people.
16:11
I will concentrate on the report on the inquiry into a just transition for the Grangemouth area that the committee published in June last year.
Much has happened since our inquiry and the publication of the report, with Petroineos announcing the accelerated closure of the refinery at Grangemouth. Although we knew that that was going to happen in the long term, it is a blow first and foremost to the employees; undoubtedly, local communities and the local and national economy will feel the impact of the closure, too.
Grangemouth is an integrated refinery and petrochemical centre of excellence. In total, it directly employs almost 2,000 people and up to 7,000 contractors at peak times throughout the year. The site produces 65 per cent of Scotland’s refined oil products, including diesel, petrol, kerosene and jet fuel. The latest figures indicate that exports of petroleum and chemical products from the site account for 6 per cent of all Scottish exports to countries outside the UK.
We visited the Ineos site in March 2023, which allowed members of the committee to see the scale of the site and its impact on the surrounding communities. It also enabled us to observe the progress that is being made towards its net zero goals.
However, it should be noted that Petroineos declined the opportunity to provide evidence to the committee, which was disappointing, as that would have provided the company with a platform to put on record its contribution to Scotland’s net zero target. The strategy on its website states:
“‘Net zero’ by 2045 at Grangemouth is a science-based commitment that means investment in reduction measures, changes in production processes, and efficiency upgrades.”
It continues:
“INEOS will be climate-neutral ... by 2045”.
At the time of our visit, 18 months ago, there was no indication of the refinery closing. What changed? Yes, there were problems with one of the hydrocrackers at Grangemouth, but it must have come as a body blow to the sector when Labour announced that it was ditching its plans to spend £28 billion to grow the green economy, especially as Keir Starmer had said only days before that it was desperately needed, and had insisted that his Government’s commitment to the spending plan was unwavering and that it would deliver more than 50,000 jobs in Scotland. All that is gone, now.
Will the member give way on that point?
Yes, I will.
I appreciate the member giving way, because I have been trying to intervene on a number of members today, to point out and remind people that the scale of the required investment, as set out eloquently by the Scottish Fiscal Commission, was something that we did not consider at the point that we did the inquiry but which is utterly critical to understand. Arguably, Mr MacDonald is right about the £28 billion. However, it is not just £28 billion that is needed; many more billions of pounds than that are needed.
I agree with Michelle Thomson’s point.
All that is gone, now. That led John McTernan, a former Labour adviser, to describe the decision to pull the £28 billion of investment as
“probably the most stupid decision the Labour Party has made.”
Let us also not forget Keir Starmer’s statement that he would be in favour of raising the windfall tax on oil and gas and extending it to 2029. No wonder closure of the refinery became a consideration.
We know that steps are being taken to secure Grangemouth’s future, and our inquiry considered how a just transition will be achieved in a way that benefits people, communities and businesses in the Grangemouth area.
The inquiry report recommendations sought both clarification and consideration from the Scottish Government in a number of areas—in particular, what a just transition for the Grangemouth area would look like and how all stakeholders, employees, businesses and, importantly, the local community would help to secure a just transition.
The Scottish Government’s reply to the committee’s inquiry was encouraging, with the then cabinet secretary providing a comprehensive response to the recommendations, including setting out what work was already under way, including details on the just transition plan for the Grangemouth industrial cluster, which had been announced in the Scottish Government’s 2022-23 programme for government and again in the 2023-24 programme for government.
I have already alluded to the fact that, compared with where we were when the inquiry took place and the subsequent report on Grangemouth was published, we have moved on considerably. However, the groundwork that had already been put in place by the Scottish Government to address the commitment to reducing emissions and the decarbonisation of Grangemouth provides vital support at this crucial time.
The Scottish Government, in partnership with the UK Government, is working on the delivery of an investment plan to secure Grangemouth’s industrial future and protect its skilled workforce, with a further £100 million joint investment package through the Falkirk and Grangemouth growth deal. The funding will provide support to the community and its workers, investing in local energy projects to create new opportunities for growth in the region.
It has been estimated that, over the next 30 years, the Falkirk and Grangemouth growth deal will deliver more than £628 million in economic benefit, with an employment impact of 1,660 net jobs across the Falkirk Council area.
The Scottish and UK Governments will provide tailored support to help affected workers in finding new employment. In addition, investment in the site’s long-term future through the £1.5 million joint-funded project willow has identified a short list of three options to begin building a new long-term industry at the refinery site—
You must conclude, Mr MacDonald.
Those options are low-carbon hydrogen, clean electrofuels and sustainable aviation fuels.
We now need the transition at Grangemouth to be accelerated, and I welcome the Scottish Government’s recently published green industrial strategy.
We have used up any extra time that we had available. Graham Simpson is the final speaker in the open debate.
16:18
I thank the committee for its sterling work on the two reports. I run the risk of giving myself a pat on the back, because I was on the committee when it did its inquiry into Grangemouth. Of course, it was a team effort—a team that was ably led by the convener, Claire Baker.
The report on the Grangemouth area, which was published more than a year ago, has now been overtaken by events. We did not know then that there was a risk that refining could come to an end at Grangemouth, and had we known then, our report would have been very different. The committee has subsequently done another excellent report on the north-east and Moray, but I will concentrate on Grangemouth, because it is part of the region that I represent.
The news that refining is to stop came out last year, but, as we know, the end date has now been brought forward. Four hundred jobs are at risk, and the futures of the town and the wider economy are at risk.
The committee’s report is out of date, but it is important that we have this discussion today. It is more important, however, that we get concrete action from both Governments. To be fair, it is good to see them working together, and that has to continue.
I have to say to the minister, Alasdair Allan, that producing a draft plan for the future at more or less the time when the refinery is due to close is not really good enough. He needs to bring that forward. We need concrete action before the refinery closes.
There is a very powerful point to be made about the disaggregation of the finances of the refinery. It is very difficult to pick that apart, because Petroineos’s assets in France are bound up with Grangemouth’s assets.
Does the member agree that the key thing is the hydrocracker finances? Taking that offline has really hit the profitability of the refinery, but there is no visibility of what that gap is and how we could make that up with a counter investment proposal.
Yes, I agree with that.
We need to look to the future of the plant. When I was on the committee, I was banging on about sustainable aviation fuel before anyone else here was talking about it. The committee did not even know what I was talking about at the time. I thought then, and I think now, that we should produce SAF in Britain, including at Grangemouth.
Will the member take an intervention?
I would love to, but I have no extra time. If I am given extra time, I will take the intervention. It is up to the Presiding Officer.
It is not a matter for the Presiding Officer. The Parliamentary Bureau has allocated time to the debate, Mr Simpson.
I am afraid that I cannot take the intervention. Others have had leeway.
I was annoyed that Grangemouth was not earmarked by the previous UK Government as one of the places where SAF should be made. I am pleased that the new UK Government is continuing with the SAF mandate policy of the previous Government. The mandate will start in 2025 at 2 per cent of total UK jet fuel demand, and that will increase in 2030 and in 2040. To that end, the committee called for
“a price support”
mechanism
“for SAF to accompany the mandate”,
because that
“may be required to incentivise private sector investment in UK and Scottish SAF production”.
We were ahead of our time.
The new Government says that the bill that it announced on 17 July to support SAF production will introduce a revenue certainty mechanism for SAF producers that are looking to invest in new plants in the UK. Scotland should be at the forefront of the decarbonisation of aviation, and Grangemouth should be at the centre of that.
When the committee took evidence in March 2023, Malcolm Bennie of Falkirk Council said:
“if I were to walk through Grangemouth town centre right now and ask people what ‘just transition’ means ... I do not know whether the term would resonate with everyone.”—[Official Report, Economy and Fair Work Committee, 8 March 2023; c 2-3.]
He was right, but they know now what an “unjust transition” means. That is happening because we have sent out the wrong signals.
Labour and the SNP can take a good share of the blame for talking down the oil and gas sector. That has consequences, and in this case we can see them. I have to say that the Greens have been utterly hypocritical on the issue. They want to close down North Sea oil and gas, yet they cry crocodile tears when we announce that refining is going to close at Grangemouth. That is hypocrisy.
Both Governments have announced a bit of extra money for the area. That is good. Project willow will look at how Grangemouth can remain an energy hub. However, we have to wonder what the Grangemouth future industry board has been up to for four years if we need that project. The committee called for greater clarity about the role of the GFIB, which it said is
“operating more as a forum with limited output to date.”
I have not seen any output. However, the committee was right, and that needs to change.
Both Governments need to roll up their sleeves and accept that Grangemouth is an integral and vital part of the Scottish economy. We cannot afford for it to deteriorate. Governments must ensure that it has the bright future that I believe it can have.
We move to winding-up speeches.
16:24
Before I launch into my closing speech, I will use a minute or two to talk about biofuels, which have been raised by several members in the chamber. Unfortunately, I was unable to intervene on Mr Simpson to make this point.
Sustainable aviation fuel is based on biofuels, which means growing a plant that produces oil or another hydrocarbon that can then be converted into jet fuel. Yes, growing plants to do that is carbon neutral, but that is a change of land use, and any land that we use to grow biofuels is not being used to grow food or for nature restoration or for forestry and sustainable materials. Whether to use land to grow materials that will then just be burned is a choice that needs to be made about how we use land in the future. If we are worried about food security, especially as climate change progresses, how much land can be turned over to the growth of biofuels is an interesting question.
Daniel Johnson rose—
I am sorry, Mr Johnson, but I am going to continue with this point.
One of my concerns about the focus on so-called sustainable aviation fuels is that they remove the focus from potential alternative technologies to aviation that are already low carbon, such as trains for short distances.
If Mr Johnson is very quick, I will take the intervention.
I am grateful to the member for giving way. She is right, but does she not also agree that biofuels will play at least some part and that the question is how much? She is right about the opportunity cost of that land use—I acknowledge that point.
Yes, absolutely, biofuels will play some part, because aviation will always need to be part of the mix, especially for island communities and emergencies. However, the idea that aviation can continue to grow as an industry fuelled by biofuels is not a realistic vision for the future of land use.
What has been highlighted by members across the chamber is that emissions-heavy industries cannot grow. They must change or they must be phased out. What would be really helpful for that process in Scotland and what we need very urgently is the energy strategy from the Scottish Government. I would like to ask the cabinet secretary directly when we will see the final published energy strategy. Is she able to answer that question now?
It was our aim to have published the energy strategy and just transition plan, but we were not able to do that ahead of the general election purdah period. However, it is imminent and in its final stages of going through the Cabinet.
I thank the cabinet secretary very much for that intervention. We need to know about that strategy because there is disagreement across the chamber about how long the phase-out of oil and gas is going to take, where it will be phased out, who will be affected and when that is going to happen. We need to know the timeline so that we can all plan for it, because a just transition is a planned transition. Without that energy strategy in front of us, we cannot even start to make the plan. That is the first step.
The next step, as so many people across the chamber have discussed, will be to speak with communities and workers. What do they want? How do we find that out? The answer is that we ask them. What do they see for their futures? What is their vision for themselves and their children? From some of the work that the committee has done on that, people give answers such as, “We’d like to see more public transport,” “We need more housing, so that we can take advantage of opportunities,” “We need more investment,” and “We need improved skills training.”
The committee’s output and some of its recommendations provide us with an expansion of the definition of a just transition that Kevin Stewart shared with us, which was only a few words. The committee’s outputs provide a description of what a just transition is—a clear definition of what we are trying to achieve.
That description covers the following aspects: community and stakeholder engagement across people, workers and local businesses in order to understand how they are going to be affected and their vision for their community; clarity on governance, whether that is the Grangemouth future industry board or appropriate governance for whatever plan we are talking about; and local economic and infrastructure development, which is always important in a transition. With regard to that infrastructure development, people need fast internet, trains, buses and connections, housing and all the pieces of functional communities. They need those things regardless of whether we are undergoing a just transition but, as we know that we need the transition, that sort of investment is needed to create economic prosperity. The description also covers new technologies, Government funding and, of course, an understanding of how communities will benefit in the future. All the committee’s recommendations provide us with a lovely script for how a just transition can be implemented across Scotland.
Finally, I would like to set out a green vision for the future, where transportation is primarily buses, trains, wheels or people’s own two feet; where town centres are safe for children and, in fact, everybody to walk or cycle to school or elsewhere; where industries are responsible for their damage to the environment, for being nature positive and for restoring the environment around themselves; where business owners are responsible for and accountable to their workers and communities and are not billionaire tax exiles living elsewhere; where community spaces exist for people to connect and develop themselves and for art and creativity; where our energy is provided by wind, tidal and solar energy; where we can generate green hydrogen to store energy and use it in our heavy industry—
I must ask you to conclude at that point, Ms Slater.
—and where homes and buildings are insulated and efficient. That is the green vision that we can build with a successful just transition.
16:31
There has been a great deal of passion in the debate, and rightly so because, if you were one of the 400 workers whose job is at risk, you would feel pretty passionate. In fact, you would feel pretty angry and upset.
This has been a long time coming. Even if we look only at the excellent report that the committee produced, we see that it was produced in June 2023. It contains some really good recommendations, but were they all acted on?
It was not a surprise that this decision was made. Alarm bells should have been set ringing in 2004 when the site was originally sold by BP and, again, when there was the change of ownership in 2011. We should have at least been asking what the long-term future of Grangemouth was and what the plan was, which, ultimately, are the questions that the paper poses. The question that members have been asking is what a just transition means. Do people understand it and is it real? It is important that we get this right because, if we do not, there will not be just 300 or 400 angry people but thousands, if not millions, of angry people. If we get the energy transition wrong and it is an unjust transition, it will be counted in hundreds of thousands of jobs. I get that, and Richard Leonard’s contribution captured that anger and frustration.
Since the announcement, it has been good to see action being taken, and I really welcome Gillian Martin’s previous comments. We have seen ministers acting at pace, additional money being found, the joint funding of the £20 million and the acceleration of project willow. I appreciate Gillian Martin’s observation that that showed a marked difference and a change in pace compared with the previous Administration.
On a very personal note, one of the things that give me courage is that I believe that Gillian Martin cares about the transition. I think that she is passionate, because it shows. However, we must all do better, and I am slightly concerned by Alasdair Allan’s comment about the plan being delayed. If it is published merely weeks before the closure of the refinery, will it do any good? I say that in constructive terms, because we need to be clear about what actions it will set out.
On what the transition means, I agree with both Murdo Fraser and Lorna Slater, in some ways. The challenge of the debate is to join those two perspectives. Murdo Fraser is absolutely right: we cannot escape from the fact that hydrocarbons will be a part of our energy mix for decades to come. We must look at that seriously and ensure that that part of our energy mix is secure. However, Lorna Slater is also right: there will be difficult decisions to make. Rather than looking at aviation, which accounts for less than 2 per cent of CO2 emissions, we must look at the use of gas in domestic heating and how we heat other buildings, because that is non-trivial. That change will take years, if not decades, to deliver, so let us have a serious conversation about our reliance on hydrocarbons.
Will Daniel Johnson give way?
In a moment. I think that Mr Kerr might want to intervene after the point that I am about to make.
A number of questions have been asked about the UK Government’s position—specifically, its position on the energy profits levy. Between 2016 and 2020, the price of oil was around $30 a barrel; it is now $76 a barrel. Last year, BP made profits of $38 billion and Shell made profits of $28 billion.
Will Daniel Johnson give way?
Let me anticipate Mr Stewart’s point. Ten per cent of BP’s profits were made in the UK. That is not all of BP’s profits, but it is still a lot of money. Centrica’s profits increased more than tenfold.
Will Daniel Johnson give way?
I will in a moment. Those profits continue to be made, which is why the previous UK Administration brought in the energy profits levy. Do we need to get those rates right? Yes, we do.
Some members have said that the capital allowances will be removed altogether. They will not. The level of capital allowances is under discussion—the year 1 allowances are under discussion and, most importantly, the post-2030 regime is under discussion. The level of those allowances will come forward, as I understand it, as part of the debate. UK Labour Government ministers understand the need to secure investment, because hydrocarbons will be part of the energy mix for decades to come.
I will give way to Mr Stewart.
I thank Mr Johnson for giving way. He has talked about the global profits of energy companies, but the simple reality is that the profitability of the North Sea basin is reducing. The key element here is not the energy profits levy itself but the investment allowances. I ask Mr Johnson to use his communication with UK Government ministers, including Rachel Reeves, to get that right, or we will see investment and companies leaving the North Sea basin in their droves.
I thank Mr Stewart for that filibuster. Perhaps he should have listened to my point that 10 per cent of BP’s profits were made from UK extractions. In Shell’s case, the figure was 5 per cent. That is still a lot of money—we are talking about billions of dollars. What is more, I made exactly the point that Mr Stewart made—Labour ministers need to get that balance right. That is what they are doing right now.
Will Daniel Johnson give way?
I am happy to give way.
No. Mr Johnson, you are in the final moments of your speech—in fact, you are at minus one second. I will allow you a sentence to conclude.
We need to learn the lessons from Grangemouth, because there will be further changes as we go through the just transition. We need to make the interventions that are required on skills, investment and having a plan, otherwise we will see further tragedies in the future.
Thank you for your indulgence, Presiding Officer.
16:37
I thank my fellow committee members, all the committee clerks and the Scottish Parliament information centre for their work in developing the reports on what I think was very important inquiry. I also thank those who took part in the evidence sessions in Aberdeen and in Parliament. The wide range of opinions and experiences that we heard have, I believe, led to a very detailed piece of work that should help to inform the Scottish Government’s approach to a just transition.
It has been a very interesting and, in the main, a very well-informed debate. Importantly, there has been consensus on the need to transition away from reliance on fossil fuels to the use of more sustainable, green forms of energy, and on the fact that the 2050 UK target and the 2045 Scottish target are universally accepted across the Parliament. Moreover, I think that the need for a transition was accepted in the committee meetings by all sectors.
However, the industry and the wider public want clarity from the Scottish Government—clarity of direction and clarity of investment. Business will adapt to a coherent long-term strategy. To me, that is the most important element of the reports, because, time and again, we heard the exact opposite—there is no clarity. It is not clear what level of funding the Scottish Government will commit, how it will be possible to access that funding or who will be eligible. We heard that continual delays in the production of Scottish Government strategies, such as the energy strategy, the just transition plan and the updated climate change plan, have an economic impact on business, investor confidence and community action.
Furthermore, the committee noted that there was a lack of clarity on the investment that will be needed to achieve a just transition. That lack of a coherent strategy could not be more apparent than it is in the approach of demonising the oil and gas sector, which, incidentally, is a major investor in the renewable energy sector. That is investment that the Scottish Government could not possibly replace.
As my colleagues Murdo Fraser and Stephen Kerr highlighted, the Scottish Government is flip-flopping and trying desperately to play both sides and is failing miserably. The Labour Party is taking a disastrous approach to the oil and gas sector by wanting to increase the windfall tax from a whopping 75 per cent to 78 per cent, which will inevitably result in less capital investment.
Does Brian Whittle agree that the Labour Government is precipitating an unjust transition by its reckless approach to North Sea oil and gas?
As OEUK stated, the reduction in capital investment could be as much as £12 billion. How on earth will the reckless approaches to the oil and gas sector by both the SNP and Labour engender confidence in a just transition? It is time that a little business acumen was introduced into the front benches, instead of endless empty targets and political point scoring.
Will Brian Whittle acknowledge which party introduced the energy profits levy? Also, how on earth did oil companies survive when oil prices were $30 a barrel just five years ago, if they are now $75? Where does that fit with his idea of business acumen?
The problem is that Mr Johnson says that the oil and gas industries make massive profits, but 75 per cent of those profits end up in the Treasury’s coffers. He must remember that. The oil and gas sector is also the biggest investor in the renewables industry, so the more we take from oil and gas sector profits the less they will have to invest in renewables. That money has to come from somewhere.
Everyone knows that we will require not just the oil and gas sector for decades to come, but the petrochemical industry in general. As Murdo Fraser said, this is not just about fuel, much as we will still require that. North Sea oil and gas are essential in the development of many products that we use daily and may not even notice. The national health service could not function without the petrochemical industry, which is involved in medicines, clothing, soap, fertiliser, rubber, paints and so on—products that are important in almost all areas of modern society. The SNP and Labour do not seem to recognise the damage that their approach is doing to the Scottish economy.
We all know that we must transition away from oil and gas, but all that we have had from the SNP and Labour so far is virtue signalling that undermines the oil and gas sector before we are able to transition. Scotland’s 2045 target is fine, but what is needed from the Scottish and UK Governments is a long-term commitment to targets based on a consistent framework that businesses, communities and education can rely on. We must understand the investment that will be needed from both the public purse and the private sector but that is, so far, unquantified.
As I have said here many times, we must also understand the skills required to make the transition and ensure that the educational environment is able to meet that requirement. If business and the workforce are to make the transition, they need something to transition to—if we create the economic opportunities, business will move to fill them. The Scottish Government should not be cutting spending on employability, an issue that was raised as an extreme concern in the committee’s report. That is the exact opposite of the message that businesses need to hear. As Murdo Fraser said, we have also seen a reduction in apprenticeships.
We can all agree that Scotland has a huge opportunity in the renewable sector, but the transition will not happen just because we will it to. It will require more than targets and Government strategies. It will require consistency of approach and the alignment of all portfolios, from economy to education and energy to industry.
16:43
This has been a constructive debate for the most part. I can think of only a couple of exceptions, but I will not be drawn further on that. I welcome the evident and shared commitment across the chamber to ensure a genuinely just transition for the people and communities at the two significant locations in Scotland’s energy system in which the committee took such a helpful interest.
The energy transition is an opportunity for Scotland. Indeed, the transition to net zero is one of the greatest socioeconomic opportunities that we have seen for a generation. However, events such as the recent announcements at the Grangemouth refinery underline the importance of capturing those opportunities for the people of Scotland. A number of speakers in the debate highlighted the real lives and families that are involved in that just transition. The committee reports that we have debated today are important contributions to that urgent national conversation.
At the same time as we support our oil and gas workers on that journey, we look to the future, and we will use all the powers that are at our disposal to make Scotland a great place to invest in green economic opportunities and to make sure that Scotland’s people benefit from that investment.
I will pick up on a few of the issues that members raised in the debate. In response to Murdo Fraser’s question about any potential sale of the refinery, I emphasise that that is a matter for its owners and not for the Scottish Government. To be clear, I cannot attempt to speak for the company on that.
On Claire Baker’s point about whether a just transition fund in the north-east would be vulnerable to changes to financial transactions, I reassure her that there are no financial transactions in the fund’s allocation for 2024-25.
Sarah Boyack spoke helpfully about the two Governments working together. I note that the cabinet secretary and I had what I felt was a very constructive meeting with Ed Miliband, and one of the first meetings—I think that it was the first meeting—between the new First Minister and the new Prime Minister touched substantially on the issue of Grangemouth.
A number of members mentioned the barriers to investment. I point out that the greatest of those is access to the grid. I hope that the two Governments, together, can make progress on that.
As I mentioned at the start of the debate, we published our green industrial strategy earlier this month, setting out how we plan to create the right conditions for private investment in sectors where Scotland has potential to compete in global markets. We are focusing on wind power, hydrogen, carbon capture and storage, and energy intensive industries, as well as our green professional and financial services.
Murdo Fraser made a point about planning constraints. The Scottish Government acknowledges some of the issues that he mentioned and we are seeking to address them through measures such as our planning hub, which seeks to support the planning system, particularly around hydrogen.
I welcome the comment about the need for more resources in planning. We clearly need more local authority planners as well as the exchange of best practice. That has to be an urgent priority, because not enough people are becoming planners through education and planners are not being retained by local authorities.
I acknowledge the need to support local authorities more generally on the issues that the member mentions about planning. I acknowledge the constraint that they could represent if we do not get that right in future.
We will use our public funding strategically to unlock growth where we know that we have an edge. That includes investing up to £500 million over five years to anchor our offshore wind supply chain in Scotland, acting as a catalyst for further private sector investment and supporting places across Scotland to benefit from our offshore renewables revolution.
On the subject of places, a number of speakers—particularly Liam McArthur and Graham Simpson—rightly highlighted the needs of the town of Grangemouth. The Scottish Government is certainly not overlooking that. To give a very small example, one of the things that we are doing is funding a community engagement officer to make sure that the town’s views are heard loud and clear by the Grangemouth future industry board. On a larger scale, I make the point that the Grangemouth just transition plan is only one of many Government interventions. Perhaps that will reassure Mr Johnson, who made a point about its timing.
Our energy strategy and just transition plan will outline our ambition to more than double Scotland’s renewable electricity capacity. It will show how we can deliver our clean energy pipeline while maximising environmental and economic benefits.
Audrey Nicoll spoke with some authority about the creation of new green jobs in the north-east and the need to increase awareness of those job opportunities. Certainly, as we drive progress in those ambitions, Scotland’s vast pipeline of clean energy projects will play a crucial role in the wider UK energy transition. As I have said, we are committed to working with the UK Government to maximise opportunities for the people of Scotland from Great British energy’s investments, alongside the existing work of the Scottish National Investment Bank. Making sure that Scotland plays that role in the future is important.
I see that you are looking for me to conclude, Presiding Officer. Achieving a just transition to net zero for Scotland will rely on our ability to realise our ambitions for Scotland’s economy. As I have set out, we welcome the recommendations from the Economy and Fair Work Committee on how best to support the regions that are most affected by the transition. We will continue to work closely with our energy industry, the UK Government and partners more widely to further realise our enormous renewables potential and to ensure that the people of Scotland benefit from a transition that is truly just.
I call Michelle Thomson to wind up, for up to eight minutes.
16:51
Speaking on behalf of the committee will be an interesting departure for me. I am pleased that I got a chance to get my tuppence-worth in earlier, so I thank members who allowed me to intervene.
Obviously, there are two reports about which members have spoken, so it might be useful to reflect on themes that were delved into comprehensively by a number of speakers, and areas that perhaps surprised me a little in that they did not come up so much.
It goes without saying that many of our speakers spoke about what a just transition is. From the start—with Murdo Fraser referencing a vision—we, rightly, had a lot of references to community. The relationship with GFIB came up as well.
Given the key thematics in the report on Grangemouth, we did not really delve into the impact on small and medium-sized enterprise and wider supply chains there and in the wider area. I often quote people’s references to Grangemouth as a “drive in, drive out” economy—a DIDO economy. That reflects the fact that the wealth is felt in Glasgow and Edinburgh because, often, people commute. Maybe we could consider that more.
The last things that we did not talk about so much, perhaps, were the Acorn carbon capture and storage project and the green freeports. We need to look at the matter in the round.
When it comes to the north-east, we had a lot of discussion about the detail and the specifics, but there was an element—a thematic—in that report about capacity building. I did not pick that up—I apologise if somebody mentioned it, but I did not hear reflections on how we would do that, although we had a lot of discussion about budget cuts and community and societal impact.
The committee considered some of the areas that have been mentioned by Michelle Thomson. She was an original member who left for a bit then came back. We took evidence on capacity building for local communities, and on green ports.
I thank Claire Baker for that. She is absolutely right. Perhaps I had not been clear; I was noting that, despite capacity building being clearly mentioned in the report on the north-east and Moray, it did not come up from our members today. Claire Baker is absolutely correct.
The last area that I did not hear much mention of was national outcomes. There is still a lot to discuss, therefore.
I will pick up on points that jumped out at me. To refer back to the convener, we have heard much comment about the refinery contributing 4 per cent of Scotland’s GDP, but that has been fairly firmly rebutted by Mairi Spowage of the Fraser of Allander Institute, who noted that
“chemical AND petroleum production accounted for 1.1% of Scotland’s economic output ... So the figure ... is likely to be much closer to ... 0.25%- 0.3%”.
I note those figures merely for accuracy, because, in reality, we all agree that the impact of the loss of the refinery will be significant.
As regards the convener’s opening remarks, I emphasise and put on the record my disappointment that Ineos declined to give evidence to the committee’s inquiry. I think that Gordon MacDonald commented on that in his contribution. That was an unfortunate decision on the part of Ineos, because it then lost the opportunity to put the good work that it does on the public record.
Also in the context of matters that the convener mentioned in her opening remarks, I am glad that Alasdair Allan has cleared up the uncertainty over financial transactions.
Speaking of Alasdair Allan and his summing-up, I highlight one point that members sometimes forget as we conduct our debates. We are trying to ensure that Scotland is positioned to compete in global markets in areas where we have an ability to do so and where we can differentiate ourselves. He made that important clarification.
Murdo Fraser made an interesting throwaway comment when he queried what serious options for sale were being considered. I know that I brought up that aspect myself. We do not know the result yet, because any discussions by the relevant parties are private, but there might be other buyers in the marketplace. I simply reflect that we must always be mindful of such doors being open.
I wonder whether the member might bring us up to speed on that. At First Minister’s question time a few weeks ago she mentioned that she was aware of one potential buyer. Is that buyer still in the market? Is any negotiation still on-going?
I made it clear at the time that I had signed a non-disclosure agreement. I have also put on the public record that, at that point, which was several weeks ago, the right people were talking to the right people. That is the only thing that I can confirm with authority. The honest answer is that, beyond that, I do not know.
I had better move on, because I know that I have only eight minutes in which to make my remarks. Lorna Slater’s contribution included a useful summing-up and explainer of the implications of land use for biofuels. I certainly learned something from that.
Kevin Stewart always makes his point well, and this time it was about investment allowances.
I quoted from an article in The Sunday Telegraph on industry. Members might argue about that, but it is important to continue to make that point.
Stephen Kerr made an important point about energy security. We might take a view on that, but we need to be aware of it.
A theme that has cut all the way through the debate is the complexity of what we are trying to do. This is really difficult stuff. People are using the term “litmus test”. However, we are not alone here in Scotland—this is a global challenge that many countries will face. Perhaps we sometimes forget that in the course of our debates.
Richard Leonard gave a characteristically spirited contribution, which I enjoyed as I always do, and Gordon MacDonald gave his usual calm reflections on matters. Graham Simpson put it on record that I was with him on the discussions on sustainable aviation fuel. We will continue to consider that aspect.
All in all, I have found it to be a most enjoyable debate, and I am glad that I got in my tuppence-worth through interventions. That is my summing up on behalf of the committee.
I thank Ms Thomson for winding up the debate on behalf of the Economy and Fair Work Committee. The debate was on the just transition inquiry for Grangemouth and the north-east and Moray, and it involved members from across the Parliament and the committee. I think that it is fair to say that it was a very interesting one.
Members: Keep going!
On a point of order, Presiding Officer. Am I correct in saying that the standing orders set out the exact time of decision time, which always provides a little bit of an awkward moment as we strive to ensure that we have decision time at the correct time? I would very much welcome your guidance on that matter.
Thank you, Mr Johnson. You have raised an interesting point, and I will get back to you on it at a later date. However, at this point, it is time to move on to the next item of business.
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