Economy, Energy and Tourism Committee

Meeting date: Wednesday, September 21, 2011

Official Report 500KB pdf

---

Ministerial Priorities

Item 3 concerns ministerial priorities. I welcome back the minister and John Mason, and I welcome David Wilson. I remind members that we have only a very tight 30 minutes as the minister has to leave by 12.30. I invite the minister to make a brief statement before we move straight to questions.

I will just busk it, if I may. Plainly, sustainable growth is our main priority, as we have described. We are focused on growth markets, growth companies and growth sectors. As minister, I go round the country meeting businesses and people who are achieving great things for Scotland. In that respect, I like to think of myself as a sort of Mr Positive, counteracting some of the daily contents of our newspapers.

There are terrific success stories in Scotland with regard to renewable energy, which we will discuss in our debate on the low-carbon economy this afternoon; the oil and gas sector, whose conference I attended a few weeks ago in Aberdeen; engineering; chemical sciences; the financial sector; life sciences; and businesses small, medium and large. Behind all that is the drive, commitment and determination of men and women throughout Scotland to make Scotland a more successful and vibrant place, and also a shared sense of the importance of helping young people to get the opportunities that we all want them to have. That is something that a great many people in business mention to me with passion and commitment.

Broadly, those are the commitments that I have. In the tourism sector in particular, great things are being achieved in Scotland. Years of hope and opportunity lie ahead, not least because of the new year of homecoming in 2014, the Commonwealth games, Creative Scotland and the business tourism success—I learned this morning that Glasgow will host yet another medical conference, catering to people from all over the world, which is a marvellous success that has been achieved by John Sharkey and Scott Taylor of the Glasgow City Marketing Bureau. I am pleased and proud to have some chance to take part in that success as the Minister for Enterprise, Energy and Tourism.

I will ask a brief opening question. What I read about you most over the summer concerned regulation, and your desire to cut red tape. Where are you with that at the moment, and how do you see that progressing over the next 12 months?

We take a principled approach to regulation that fits the warp and weft of the Scottish approach to this problem, if I may say so. We are not against rules and regulations. After all, it was rules and regulations that made it illegal to send children up chimneys and which led to people such as Jimmy Reid, whom we commemorated last week, campaigning against the appalling consequences of asbestos-related disease. No one can argue that regulations are wrong. What is wrong is regulations that serve no clear purpose, that are applied overzealously, that have a disproportionate effect on the economy, that are not necessary to ensure health and safety and that are impeding the growth of business. For example, when I was the Minister for Community Safety, we dealt with fire regulations for bed-and-breakfast establishments that would have imposed costs of up to £20,000 on each business. They seemed to me to be disproportionate and not necessary. The Scottish approach to that did not involve a ministerial edict; it involved bringing together in a working group people from the fire service, the bed-and-breakfast sector and the Government to work out a better solution. It took us 18 months, but we did that.

We do not believe in an arbitrary approach, such as the one in, one out approach that is being pursued down south—with what success I wait with bated breath to hear. Instead, we pursue a rational approach that involves identifying which regulations are disproportionate and trying to encourage regulatory bodies and others to adopt an approach that is willing to listen properly to the concerns of business.

That is our approach, which is different from the one that is being taken down south. I am proud that that is the approach. It is a more difficult one, because it involves discussion, debate, dialogue and working together to find the correct solution, but, with the help of Professor Russel Griggs and many others, we are hopeful that we can identify specific areas where regulation is proving to be disproportionate and unreasonably thwarting sustainable economic growth.

I have a couple of questions on tourism and one on energy—enterprise is a running theme that links the questions.

You mentioned homecoming 2014. What sort of dialogue will be available for voluntary and business groups that deal with tourism in their local areas, so that we can ensure that they have the buy-in to the process that will ensure that homecoming 2014 is a success?

Stuart McMillan is right to say that we need to work hard with all partners to avail ourselves of all the opportunities that lie ahead in what we call the winning years, which feature the Ryder cup in 2014, the Commonwealth games and homecoming. We are also looking to other opportunities to put Scotland firmly on the world stage by, for example, harnessing the power of movies such as Disney Pixar’s “Brave”, which will be out next year, and which my three-year-old daughter will no doubt ensure that I watch frequently.

There are great opportunities ahead and Stuart McMillan is right to say that we must work successfully with voluntary organisations. Under the leadership of Malcolm Roughead and Mike Cantlay, VisitScotland is seen as a can-do organisation. We have had a number of meetings around Scotland in the short time I have been minister, in places such as Glentress, Peebles, Fife and the Highlands. I have opened visitor centres and seen the joint work that VisitScotland is doing with local authorities to share overheads. I have discussed the opportunities for Scotland with many volunteers at many events and we are keen to ensure that work with the voluntary sector can continue. In the year of homecoming, 2014, we will ensure that a wide range of events involving the voluntary sector take place. We are happy to work with all MSPs to make suggestions on what we can usefully do, because we are all part of team Scotland.

I have a second point about tourism that also affects the sailing and boating sector in Scotland. Patrick Harvie might not be happy with what I say, but approximately 30 per cent of people who berth in Scotland come from down south and fly up to take part in activities.

Have they not heard of the train?

I am sure some may take the train. The sailing and boating sector in Scotland has been fairly resilient even though economic conditions are extremely tough. In parts of the sector, demand has increased each year for the past three or four years. I am keen to stress that point in respect of future development. At a recent meeting of the cross-party group on recreational boating and marine tourism, the point was made that a reduction in the number of flights in and out of Scotland will have an adverse effect not just on the sailing and boating sector but on the number of golfers coming to Scotland—the home of golf—ahead of the Ryder cup in 2014.

I did not know that Mr McMillan is keen on aquatic and nautical pursuits, but he makes a good point that this is one of a range of areas in which people are pursuing their sport or interest. It leads to the development of marinas, for example, off the west coast in particular. I am aware of many such developments, which provide people with an opportunity to take part in sport, as well as creating jobs and economic development. I am keen to work with Stuart McMillan to take advantage of any opportunities to further enhance sailing and yachting activities—I say that as a bit of a land-lubber.

The other part of Stuart McMillan’s question relates to golf, which is one of the key reasons why many people come to Scotland. I was very impressed when I visited Fife and engaged with Fife Council and enterprise people about how they market Fife as the home to 41 golf courses—that figure might be slightly wrong. They market Fife quite aggressively, and rightly so, as a marvellous place to play golf.

I see particular opportunities in improving business tourism, which is worth so much to Scotland these days, especially—but not solely—in Glasgow and Edinburgh. In a recent venture, VisitScotland supported activity in Perth and, throughout the country, there are opportunities for businesses to run conferences, exhibitions, seminars and other events. It strikes me that if, as happens in Glasgow, large numbers of people come to a conference from all over the world, it is sensible for us to ensure that they are encouraged to have a pre or post-conference break in a different part of Scotland. It is also sensible for us to work together, largely with the commercial organisations running the conferences, to ensure that, when they e-mail the delegates to say, “Here’s the information about your conference on 21 September,” probably back in June or earlier, those delegates get the opportunity to consider a holiday in Fife, the Orkneys, Nairn, Peebles or elsewhere. There are commercial opportunities there that could significantly enhance an area of tourism in which Scotland is doing extremely well and Glasgow is doing stupendously well.

12:15

My question on energy is about the Beauly to Denny project, which was very much an issue in the previous parliamentary session. When will you make a decision on the final consents for the transmission line?

I should preface my remarks by saying that the matter is subject to consultation and therefore I cannot make any substantive comment. The period of consultation with the local authority in relation to the visual impact mitigation study was to be 30 days. I extended that period to 45 days to allow those being consulted full opportunity to consider the issues. After that 45-day period is over, it would be correct to seek permission from the Parliamentary Bureau for a statement to be made to Parliament about the decision, which is one for me to take.

I said that Angus MacDonald could come back in on energy.

Thanks, convener. I will be as brief as I can.

It is good to see that you are relishing your new remit. I am aware that, as minister, you cannot comment on specific energy applications. However, there is an issue that not only affects my constituency but has an impact on three other east coast constituencies and on Scotland as a whole. You will be aware of the Forth Energy application. Could we have some clarification on the Government’s position on large-scale biomass plants, in particular 100MW or larger, that would source their material from North America, South America and Russia should they receive ministerial approval?

I have to be extremely careful about what I say on any matter that may come to me for a decision. I approach such decisions in the correct way, which is to consider each in accordance with its merits and the facts. Therefore it would perhaps be inappropriate for me to make ex parte remarks about an area in which I have a clear legal role to play. I apologise to Angus MacDonald, who has quite reasonably asked the question but, to ensure that I do not step out or be perceived to step out from the correct approach, which I must follow in these matters, by making any comment, it would be better for me to park that question for the moment. However, I am sure that we will revisit the matter in the fullness of time.

That is understandable. Could you give us an idea of the timescale involved before a decision is likely to be taken?

I apologise, but I do not think that it would be correct for me to answer that.

Having run small and very large businesses myself, I would think that this has to be a very exciting time for you to lead the charge for Scotland Ltd, notwithstanding the economic pressures outwith Scotland. Exports in the food and drink industry will grow by 25 per cent in the next five years and there is the potential for manufacturing to support renewables. You mentioned golf. I had the pleasure of being at an EventScotland event last week when it said that a quarter of a million people visited Gleneagles in one week. I fully endorse what you said about business visits continuing on to pleasure visits. We also need to think about encouraging people to come back after one pleasure visit, for example, to the Ryder cup.

This is not really a question, but I ask you to stress as much as possible the need for us to have sufficient capacity and capital to benefit from exports and incoming visitors. We particularly need to invest further in our ports in the garden of Scotland, which is Ayrshire and Galloway, and the likes of Prestwick airport. As you rightly said, we must concentrate our minds on ensuring that we have the ability not just to promote but to deliver Scottish exports, as they will underpin Scotland’s economic future.

I thank Chic Brodie for that wide-ranging question. I agree with all the sentiments that he describes. He is correct that we focus on exports. We want more businesses to export. I pay tribute to the food and drink sector for the marvellous success that it has achieved, and to Richard Lochhead’s leadership on that. In particular, I mention the success of the source of renewable heat and occasional light that is whisky, which has been more successful this year than ever before in numerical terms and in its value to the economy. I believe that whisky exports to Brazil have increased by more than 50 per cent, so I suspect that there are some extremely happy people over there. That is extremely good news. In the summer, I visited the Scottish Leather Group, which turns over nearly £90 million and which turns hide from cows into the luxury leather upholstery that we see in most high-brand cars. It is exporting with huge success around the world. I am in a privileged position in that, perhaps more than anybody else, I can see the success that businesses in Scotland are achieving in exports.

The challenge for us, in working with Scottish Development International, HIE, Scottish Enterprise and local authorities and with the business world in Scotland plc, is to drive the export level higher. I am immensely optimistic that, in some of the key sectors that I have mentioned, there will be opportunity for marvellous careers for young people in Scotland. I am thinking about industries such as renewable energy but also oil and gas, given that there will be another five decades of extraction in the North Sea and off our northern coast, which is a good thing. There are tremendous opportunities for Scotland. We do not read about the success stories as often as I would like, but I will do my best to promote them in the next five years. I look forward to working with all members to that end.

I have two quick questions on energy, the first of which is on energy consumption. This committee, like its predecessor, has an interest in energy efficiency and reducing energy consumption. That issue now falls into three ministerial portfolios—yours, the climate change portfolio and the infrastructure and housing portfolio. Of course, there is also Mr Swinney setting the budget for public investment in reducing energy demand. How will the relationship work between the members of the ministerial team? Will one minister lead on that? What will your role be in that policy area?

The relationship will continue to work well. It is good that responsibility on the issue goes across ministerial directorates, because that shows how important it is for us all to achieve energy efficiency and, as far as possible, reduce our energy consumption. We promote the various ways in which that can be done. Acting together, we promote and support various schemes, most of which have been supported across the political spectrum. For example, there is the provision of replacement central heating systems. The original scheme was run by the Eaga Partnership, although I am showing my age there. There are also schemes to provide more insulation and more advice from the Carbon Trust. I chair a group on microrenewables that aims to produce the strategy that we promised in the “2020 Routemap for Renewable Energy in Scotland” will be produced by around the end of the year. We are working with the representative bodies for plumbers, electricians and others to ensure that their work is best supported to achieve practical results in microrenewables. That is one area of specific interest to me.

I spend a great amount of my time driving forward the renewable energy agenda. Yesterday, I was at a marvellous conference in Inverness about marine energy, particularly wave and tidal. There, I met some of the companies in Scotland that are already providing career opportunities and driving forward the agenda.

Although the responsibility is not carried by one minister alone—that is not necessarily a bad thing—I am confident. Patrick Harvie is right that we must ensure that all the directorates work together. He raises a serious matter. We must always ensure that we work closely together. No one is more conscious of that than the gentlemen on my left and right, David Wilson and John Mason—and me, actually. Therefore, Patrick Harvie should rest assured that we are determined that we will not fail through demarcation, lack of communication or a lack of the left hand knowing what the right is doing. That is perhaps where he, quite reasonably, is going with his question. I am sure that, if we err in that way, he will rightly be the first to pull me and my colleagues up.

I just wanted to get a sense of how you envisage the relationships working. I look forward to the work on microrenewables on which you are leading.

I have a question on energy production. The phrase that you use in your letter—“Transition to a Low Carbon Economy”—means more than just generating more renewable energy: it means using renewable energy instead of the high-carbon fossil fuel sources that we have used in the past. However, opencast coal extraction, as well as renewables, has expanded; the Government has supported new exploratory drilling; and the minister looks forward to 50 more years of oil and gas extraction. If a new, unconventional fossil fuel, such as shale gas extraction, comes on to the agenda in Scotland, is there an existing policy by which the Government will determine any future applications? If such a policy exists, does it—and if it does not exist, will it—include responsibility for the carbon emissions that would arise from that new extractive industry?

Patrick Harvie knows extremely well that the Government has high targets on the low-carbon economy. I will not repeat them here. He is right that we want more energy to be produced from renewable sources: a headline target is 100 per cent of the electricity that we consume by 2020. We have been accused of being too ambitious, but setting that target has already helped us to achieve great success. It has marked us out in the world. We have carved out a niche and attracted major companies in the world to these shores to invest in the ports that Mr Brodie mentioned earlier to ensure that they take part in the renewables revolution. It is a revolution, and I am not by instinct a natural revolutionary.

It is correct and environmentally sound that we should make the most of oil and gas as long as the world needs them and is in transition from a fossil fuel-driven economy to a non-fossil fuel-driven economy. No one knows how long that transition will take but, as long as it happens, we must make the most of, and not waste, the world’s resources. For example, if we extract only 30 per cent of the oil and gas from a North Sea oil field, we therefore waste 70 per cent of it. Surely it is in our interests to enhance the extraction of existing fields. It seems to me that that is a bit like the parable of the talents, in which one talent was buried in the ground and wasted. We do not want to waste resources; we must use them to best effect.

That seems to me economically advantageous to Scotland and the many thousands of young people who will get jobs—198,000 people in the oil and gas sector in Scotland. I met some of them at a conference in Aberdeen. I have rarely met young people with such a tremendously positive attitude to the environment and the planet, but they saw a career in the oil and gas industry. I make no bones about it: we want to ensure that we move to a renewables, low-carbon driven economy. The idea that we will shut down all our oil rigs and give P45s to people who work in the sector—if that is what is proposed—is certainly not on our agenda. We need to encourage the sector to develop enhanced oil extraction and to operate as safely and sustainably in future decades as it has done in past decades, so that we do not deter young people from seeking a career in it.

I hope that that answers that part of the question. I do not want not to answer the last part of the question, which was about—

Hydraulic fracturing—the technique that is used for shale gas extraction.

12:30

Yes. As Patrick Harvie knows, we have no industry in Scotland of that nature. Any proposals that such activities should be carried out in Scotland would, by definition, require to be carefully studied and analysed. They would have to be analysed from an environmental and economic point of view. We would use that process to consider any proposed developments in Scotland.

I am aware that environmental concerns have been expressed about shale gas extraction, particularly about its operation in the United States. We would take such matters very seriously indeed, but it would be wrong to prejudge matters. By definition, the Government should not prejudge any matter. It should look at the facts and be willing to hear evidence and listen to people involved. That is the approach that every single member, especially Mr Harvie, was advocating in the first evidence session. I assume, therefore, that he would advocate the same approach in this instance.

I am not aware of any applications before me as an energy minister, so for the moment it does not seem to be as pressing a matter as the others.

I am wondering whether parables are the new mind maps. Patrick Harvie is indicating that he has one final question.

I am grateful, convener. I accept that we are not looking for a prejudgment on any future application, but I asked specifically whether the carbon emissions arising from the use of shale gas would form part of the consideration—not just local environmental considerations but the carbon emissions at the end point of the extractive industry.

All I can say is that all relevant considerations will be looked at, for the reasons that I set out. We would consider that matter along with any others, should the occasion arise.

I thank the minister for his evidence and the members for their questions. That brings to an end the public part of the meeting.

12:33 Meeting continued in private until 13:07.