Chamber and committees

Good morning, and welcome to the 23rd meeting in 2024 of the Economy and Fair Work Committee. Our first item of business is a decision on whether to take items 3 and 4 in private. Are members content to take those items in private?

Members indicated agreement.

Thank you. I will bring in Michelle Thomson.

I am sorry, Mr Whittle, but we have other business this morning. I must ask you to bring your questions to a close.

Our next item of business is a joint evidence session with the Scottish Fiscal Commission and the United Kingdom Climate Change Committee on financing a just transition. The session comes ahead of an anticipated chamber debate on the committee’s two just transition inquiry reports. I welcome Professor Keith Bell, mitigation committee member from the UK Climate Change Committee, and Professor Graeme Roy, chair of the Scottish Fiscal Commission.

As I mentioned, the committee has undertaken two inquiries—one on Grangemouth and one on the north-east and Moray—reports on which have recently been published. There has been confirmation of the plan to close the oil refinery in Grangemouth next year. I ask the witnesses to give us an overview of how we finance a just transition. During the inquiries, we heard evidence about the significant resources that will be needed to achieve the transition. Given the scale of the challenge, there are fairly modest commitments from the Scottish and UK Governments at this point in time. Professor Bell, can you give us an idea of the levels of investment that are required and where we are at the moment on being able to make that investment?

It has introduced a lot of issues for us to pick up on throughout the morning.

I have a similar question for Professor Roy. In our two inquiries, finance has been a big issue. There is pressure on public spending this year and, it is anticipated, over the next few years. However, the plan that we are looking at extends over 10 or 15 years. A lot of the targets that have been referred to—on electric car usage and heat pumps, for example—are over the longer term. What are your reflections on the immediate challenges that we face and, given that we anticipate that the difficult situation that we are in at the moment will not last for ever, how do we provide the finance to achieve our longer-term targets?

I will ask a couple of questions before I bring in Willie Coffey. Professor Bell, Professor Roy talked about the situation in Grangemouth being played out in real time, and you will know that, when the committee published its report, the news on the closure of the oil refinery, on the timescale that we are looking at now, was not in the public domain; we did not know that when we published the report.

We hope to have a debate in the chamber on the two reports. I think that everybody—or at least most people—accept that the oil refinery does not have a long-term future. It is the pace of the change that is difficult. Will you share your reflections on the current situation?

You have raised some of the issues that members will be asking questions about but, before we leave financing, I have a final question on what the barriers to private finance might be. America had a big fund to encourage renewables and Europe launched a big fund, but the UK was seen as being a bit behind. Obviously, we have had a new Government for the past few months, so we are at a different stage and changes could be coming down the line, but what are the barriers to private finance? Do we have sufficient policy clarity? Do our Governments look like they are open for business? Are there enough financial levers to encourage private finance compared with other countries?

I would like to make some progress. I call Lorna Slater to be followed by Kevin Stewart.

We have seen some of the challenges. In the north-east and Moray, the Government committed £500 million over 10 years, but it has reduced that because of the situation with financial transactions. When the announcement was originally made, you would have thought that it would be £50 million a year, but we are at only £75 million at this point. That might be an example of the practical difficulties in delivering on a commitment that has been made.

We move to Michelle Thomson, followed by Willie Coffey.