Chamber and committees

As I said before, we have a big challenge in ensuring that we have the people to realise our ambitions and the economic opportunities in Scotland. We are working on ensuring that we have people with the right skills and that the projects are delivered.

At the moment, we are not far off the tipping points that I mentioned earlier. The supply chain companies in Scotland are excited about the future, but they are waiting for the projects to happen so that they can keep people in work and stay in Scotland. That is a big issue in the north-east of Scotland. There is a lot of excitement, but people are waiting for the first projects to come on stream, which should, I hope, happen.

As far as the skills guarantee is concerned, we know that there is the potential to employ even more people in energy in the north-east of Scotland than is the case at the moment. Robert Gordon University’s “Making the Switch” report, which the Government funded, found that we could create 9,000 more jobs in offshore energy in the north-east of Scotland than we have at the moment. Therefore, it is not just a case of protecting what we have; we have the opportunity to create more jobs.

Through the just transition fund, we have provided OPITO, which is the offshore skills organisation, with nearly £5 million to create a digital passport to make it easy for people to use their transferable skills to move from oil and gas jobs into jobs in renewables and decarbonised energy.

The picture is optimistic at the moment, but the projects must take place so that business can be delivered for the supply chains and we can move forward.

We have had correspondence with the commission a couple of times. I think that it asked us some follow-up questions, and we have responded to that. The first report was geared around many of the things that we have spoken about today, which are the key principles that underpin just transition and the issues that have to be addressed. It is an important first stage that we accept the principle of co-design and the principle of keeping a close eye on people to ensure that they do not fall behind or pay a disproportionate cost of the transition. The first report was about those general principles to get things going and setting the parameters of what a just transition is all about. I am sure that the detail will come and that the commission will press us more on that as time goes on.

As you can imagine, because it is vital to delivering it, we are mainstreaming the just transition through all portfolios and policies. Therefore, I have bilateral meetings and correspondence with all other cabinet secretaries and ministers. We discuss the urgency of transport or other areas in which we support the just transition.

All ministers are working on the just transition dimensions of their own responsibilities. My responsibility is to help to co-ordinate that and the publication of the plans. My officials will co-ordinate the publication of the plans, but the different teams and ministers across Government have responsibility for populating them and the measures that we will take.

We are aligning our just transition plans with the Scottish Government’s next climate change plan. That is because the climate change legislation includes references to just transition and we must take into account all the issues that we will discuss today. I understand that the draft climate change plan will be published before the end of 2023. The plans are aligned, and the climate change plan for Scotland must be adopted a year or so after the draft plan is published. We are trying to align all of that.

You asked about the energy plan and its detail. The draft energy strategy will deal with the whole energy system in significant detail. There will also be a just transition element within that plan. That is always evolving. We will have a just transition plan for energy alongside the refreshed energy policy. We will include as much detail as we can, but that is always evolving. We are sowing seeds in 2022 for transformation in the coming decades.

That picture will always change, and we need an evolving living and breathing approach to a just transition in Scotland. We are becoming more aware of what is required for each sector. There are myriad opportunities for Scotland, including onshore and offshore wind, hydrogen, carbon capture and decarbonising buildings. There is a massive exercise to gear up the skills for that and to have the appropriate funding, not only in the public sector but in the private sector. There must be an evolving living and breathing approach to just transition. We have not done this before, so we must continually learn lessons and adapt. We must look at what is working and at what is not working so well as we move forward.

The Scottish Government has allocated £2 billion to transport projects under this agenda, including more than £1 billion for rail electrification, £500 million to active travel, £50 million to active freeways, £287 million for the future transport fund, £495 million in bus priority investments and £120 million in zero-emission buses. A lot of the building blocks are being put in place. However, in the past two or three years, various factors have come into play that we were not expecting.

Covid has had an impact. On one hand, transport emissions fell in certain sectors because of lockdown, but now we find that people are reluctant to go back to public transport and are still driving. Such left-field issues have come into play and have affected our emissions in the transport sector, particularly when it comes to cars.

We do not underestimate the challenges. It is about behavioural change as much as Government policy. It is about everyone—the public and private sectors. It is about political consensus. I recall the battle that we had in the Scottish Parliament, from the member’s party and other parties, over the workplace parking levy, giving local authorities the powers that other parts of the UK have. That became a political battle.

I therefore say to the member and to the committee that we need political consensus if we are to put in game-changing measures; those must not turn into political battles all the time. Given that we are all supposed to be signed up to going towards net zero and reducing transport emissions, that political consensus would really help us.

The difficulty is that there is no uniform definition across the UK or across the world. The ONS is looking into that as the official statistics body. It is looking at different categories—it is looking at green jobs that are created in emerging sectors and at existing jobs that are being greened.

One of the understandable challenges is that a job nowadays may be a green job just part of the time; if the employee does not spend 100 per cent of their time doing green tasks, do you define it as a green job? That type of issue is a sign that the world of work is changing and the green economy is emerging. Those are the challenges that the ONS and others are looking at. However, I think that it is good news that we now have a report saying that there are up to 100,000 green jobs in Scotland and that many of those are in new and emerging sectors.

Yes.

One of the biggest challenges is about how we are going to fund the just transition and all the steps that we have to take to get to net zero. As the member said, many of the figures for different policy areas and the global figures are eye watering.

At the United Nations Climate Change Conference of the Parties 26, in Glasgow, there were clear signals that there are enormous amounts of private sector finance available around the world, so the Scottish Government is taking steps to try and attract that for investment in Scotland.

One man who was standing behind me in the coffee queue at COP26 was boasting to his colleague that he had $2 billion available to invest. I regret not getting his business card and following that up. At COP26, there was a lot of talk about the amount of private sector finance that is available.

The UK Government has its own green finance strategy, and the Scottish Government has submitted to that throughout the consultation period. However, we are concerned about the pace at which the UK Government is moving; the matter is urgent, so we need more pace from the UK Government. We do not need that only on areas such as carbon capture and storage, and giving the go-ahead to the Acorn project, which would create an enormous amount of wealth in the Scottish economy and bring in private finance; we also need quick action on the green finance initiative that the UK Government is looking at.

On the Scottish Parliament and the Scottish Government budgets, we are all familiar with the pressures on public finance at the moment, so not only do we face massive challenges in achieving net zero, but we are trying to do so when public budgets are under huge pressure and there is a cost of living crisis. There is also an inflation dimension.

The Scottish Government does not have the borrowing power that is required to finance some of the major projects, so we need the UK Government to step in wherever it can. For instance, we have challenged it to match the Scottish Government’s £500 million just transition fund over 10 years for north-east Scotland and Moray. We would like a UK Government contribution to that. The green jobs task force that the UK had a year or two back suggested that finance is required from the UK Government, but it has not been forthcoming with that finance. There is a big role for the UK to play.

As I said earlier, the potential of hydrogen is enormous for the Scottish economy, and it has a role to play in decarbonising our country. I have spoken to people who think that, if we play our cards right, Scotland could be one of the top three countries in the world in terms of having a decarbonised economy. I hope that that is true, because we have a wealth of resources that could make that happen. However, there are, of course, massive challenges and costs involved in getting there.

The Scottish Government will publish its hydrogen policy in the next few weeks. Clearly, that will give the committee an outline of the direction of travel in relation to realising the potential of hydrogen for Scotland domestically and in terms of export. The initial assessment says that up to 300,000 jobs could be involved. Obviously, the number could go from several tens of thousands up to that level; we will learn over the next few years what the potential is.

With regard to the policies that must be put in place, we have to ensure that people are upskilled and retrained to deal with hydrogen. A lot of work is going on in Scotland in that regard, including in the private sector, where work is being done on the commercial opportunities relating to hydrogen. A month or two ago, I received a presentation from SGN, which is doing some incredible things to investigate and explore what has to be done to re-engineer the infrastructure to take hydrogen, and what that would mean for supply chains, skills and so on.

The Minister for Business, Trade, Tourism and Enterprise, Ivan McKee, spends a lot of time on that issue, and, of course, the Cabinet Secretary for Net Zero, Energy and Transport, Michael Matheson, is just back from Japan and Korea, where he spoke to a lot of large businesses that might invest in Scotland. Ministers are doing their best to engage with developing technologies and are taking expert advice. We are publishing relevant policies. As I said, the hydrogen policy will be published in the next few weeks. It will take into account the latest research and information on technologies.

We face a challenge, but we will work with the enterprise companies on the issue. Scotland also has a prestigious university research sector that is helping us.