Chamber and committees

Absolutely. Apprenticeships are key, as is working with the higher and further education sectors, and I am keen to work with the Cabinet Secretary for Education and Skills on the matter. After this conversation, I might feed back to her and look at how we might be able to work more closely together on ensuring that investment goes into the apprenticeships and the jobs that are in high demand right now.

Much of this comes back to how much pressure has been placed on our public finances. We need to maximise the funding that is available to the most important areas that we as a Government want to invest in, particularly education and jobs, but we need to balance that against the various demands and interests that we have already heard about in this committee, such as tax cuts, investment in particular sectors and industries and investment in infrastructure.

This is why I must emphasise how uncomfortable I am with reducing our economic activity to only one budget line. You have just outlined a critical economic driver—that is, the jobs that are created by apprenticeships and which come out of our higher and further education institutions. That aspect falls into the education space, but we cannot disagree that it is also of profound significance to our economic efforts. I will therefore take your question away and share it with the education secretary.

To continue that work.

That has been through the ScotWind supply chain. My understanding from the finance secretary is that that will be confirmed in the autumn budget revision.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Okay.

—as though NSET should not be embedded right across Government. It should be. There is no part of Government that does not have a relationship with the economy.

If this is our ultimate master plan for what we want to do with the economy, then it would deeply concern me if you reduced it to a budget line. What would that mean, for example, for technological innovations in the NHS? Are they not linked with exciting economic opportunities? What would it mean for the transport budget, when investment in transport systems has a clear impact on productivity, which is one of NSET’s aims? You cannot tackle child poverty without investing in employability, which is also one of NSET’s aims. Therefore, it would be extremely short-sighted—and I would be very disappointed—if NSET became about trading blows over what the budget is. It is actually about whether we are achieving our aims throughout the entirety of what Government can do.

—and I have just said that I would like NSET to be embedded right across the board. I can talk to you about the economy budget, but, by choice, I am not going to give you a figure for the NSET budget. It is utterly irrational to reduce the Government’s overall plan to just one budget line, as if you have to then ignore employability, investment in technology and all the other things that are happening in the economy. The Opposition frequently suggests that there is not a cross-Government approach to the economy, yet your question is directly asking me to create more silos and more separation between different parts of the Government.