Chamber and committees

Does the member agree that it is slightly ironic that, even if Petroineos ultimately decides to move to an import facility, it would still be dealing in the same market? That makes me question what is going on, because the market itself is not going anywhere. I even question the talk about spring 2025.

To be completely accurate, the committee approached Ineos rather than Petroineos. I just want to make that distinction.

I am pleased to speak in this important debate and I thank Stephen Kerr for his reflective comments. Let us hope that the debate continues to bring more light than heat.

I am a ferocious protector of my constituency of Falkirk East, including Grangemouth. The Grangemouth community is quite remarkable in its resilience and deserves praise for the pragmatic way in which it has sought to play its part in shaping our future. This can only be a worrying time for the workers, too, so I commend the efforts thus far of the unions that are involved. Grangemouth is, indeed, the beating heart of both an industrial past and a greener future.

Those who describe the refinery as a national strategic asset are right; those who have concerns about energy security are absolutely right; and those who say that we must do all that we can to retain it as an oil refinery are not wrong, but my focus must be on doing all that we can to ensure that the entire industrial cluster around Grangemouth continues to thrive—now and in the future.

What do my asks look like? I was pleased that Graham Stuart MP—the UK Government Minister of State for Energy Security and Net Zero—indicated his willingness to look at all options for the refinery. We wait to hear what more support his Government will offer, and the Minister for Energy and the Environment might be able to give more insight today on discussions thus far. I know that the UK Government will offer financial support to strategically important industrial and commercial ventures that are making a loss. I draw attention to the UK Government grant of up to £500 million for the Port Talbot site that is run by Tata Steel UK.

Given the situation that we find ourselves in, if we carry on working in this collaborative way, which I am personally heartened by—and I agree with what has been said about both Governments working on this and impact assessments—I think that we can frame an opportunity here. After all, we have known for some time about the considerable complexities of putting meat on the bones of a just transition. Does the member agree?

Budgets are about choices. This year, for completely understandable reasons, certain budget pots, such as health, have been afforded more protection than others. The price that we pay is less support, over the next year, for business. I would be concerned if that was to become a trend.

I note that if we are serious about more positive health outcomes, we need more well-paid jobs. Public Health Scotland itself states that on its website, and multiple long-term studies have proven that causal relationship. That means that we need to take a balanced approach to funding decisions. There is currently a perfectly justifiable focus on making positive social security choices. However, the Scottish Fiscal Commission estimates that spending in that policy area in 2024-25 will exceed the block grant adjustment by more than £1 billion. I note, again, that a really positive impact on absolute and relative poverty in the longer run will be achieved only if we grow significantly the number of well-paid jobs in the economy.

I make those points to emphasise that, in order to serve both the health and the economic security of the Scottish people, we need a longer-term, balanced and strategic consideration of the budgetary process. For that reason, I agree with the call from multiple agencies and the Scottish Fiscal Commission for a multiyear approach.

My second substantive point regards uncertainty. As Nobel prize-winning Professor Deirdre McCloskey put it,

“The economy, like science or art, is more like an organism growing uncertainly toward the light than a steel machine repeating exactly today and tomorrow what it did yesterday.”

We need to avoid thinking that we know precisely what the future will bring. Our assumptions, such as they are, must use the best evidence available, and we must remain curious in the face of uncertainty and plan as best we can.

In that context, I note this morning’s letter from the Finance and Public Administration Committee to the Scottish Government on the approach that is being taken to the National Care Service (Scotland) Bill and its accompanying financial memorandum. I recognise that considerable work has been done to address some of the concerns that the committee has expressed. However, I note that the longer timescales for delivery lead to considerably more uncertainty over funding, evolving assumptions and ultimate delivery.

There is a broader context, which all too often is not considered by some members. As I have put on the record previously, I regret that the narrowness of devolution leads to a narrowness of thought. I have spoken often about the fundamental characteristics of the UK economy that affect budgets at both UK and Scotland level. I was, therefore, particularly interested in part of this month’s report of the Bank of England’s monetary policy committee, which includes an analysis of UK economic performance.

Economic growth reflects a combination of labour supply and productivity. Prior to 2007—members will recall that there was a Labour Government in power at that time—the major component of UK economic growth was productivity growth. However, the bank’s analysis shows that that growth came to a shuddering halt in 2007 and has never recovered, basically because of a failure of overall investment and a collapse in total factor productivity, which speaks to a failure to create effective conditions for an innovation-driven economy.

What growth there has been at UK level since 2010, when the Tories came back into power, has largely been from an increased labour supply as a result of population growth. We know that Scotland is vulnerable in that respect as a result of our demographic challenges. It is little wonder, then, that Professor Sir Anton Muscatelli has commented that

“We need to re-boot productivity growth.”

He went on to say that that will involve the need to

“address skilled labour shortages through skilled immigration”—

a critical issue that has not been addressed by the straitjacket of the Tory Brexiteers, with the same mood music from the born-again Brexiteers in the Labour Party.

If we are to reboot our economy and have a secure basis for funding the many desirable priorities that we have, that will be extraordinarily difficult to achieve in Scotland under the current constraints of devolution. We lack the necessary borrowing powers to tackle underinvestment—

Will the member take an intervention?

According to Offshore Energies UK, backing home-grown energy will strengthen supply chains, boost capability and unlock economic growth. However, UK-wide, many businesses are holding off from confirming final investment decisions because of policy uncertainty from the current UK Government. That and the latest U-turn from the Labour Party in abandoning its policy on £28 billion investment in green energy, including £1 billion for Grangemouth in my constituency, places Scotland’s ambitions at risk. Will the minister, on behalf of the Scottish Government, emphasise to the UK Government, whichever party it is comprised of, the importance of certainty in policy to unlocking that vital funding?

To ask the Scottish Government, with regard to cross-Government co-ordination of net zero policy, what discussions it has had with the United Kingdom Government regarding what is required to unlock the full potential of Scotland’s green economy. (S6O-03070)

Michael Marra makes a fair point. I would always want to see more investment in that arena because we are in a highly competitive marketplace. However, the point that I am making is about the wider UK economy. I remind members that we live in that straitjacket, specifically in respect of productivity and our inability to control immigration. I look forward to Michael Marra commenting on that in further remarks.

We lack the necessary borrowing powers to tackle underinvestment and to partner and encourage private sector investment at scale. Critically, we lack the necessary policy powers to encourage skilled immigration. That is not sustainable.

There is one thing that we can do to set a more positive culture. As the economic historian Joel Mokyr put it:

“Economic change in all periods depends, more than most economists think, on what people believe”.

We need to be more supportive of innovators and entrepreneurs, and more focused on the development of excellence in our skills system. Frankly, we need a revolution in attitudes to match a revolution in investment and labour supply issues.

We have had some discussions with the Government around the nature of risk. I made an observation on that when we were going through the Gender Recognition Reform (Scotland) Bill. According to the evidence that I saw, risk assessment concerned the probability of a risk occurring but not the impact, if it occurred. Can you reassure me that the risk assessment has been done with the academic rigour that you would want to see?

I raised with the Government the possibility of the situation that we found ourselves in with Isla Bryson, before it occurred, and I said that, although the probability of such a risk occurring was low, the impact, should such a situation arise, would be extraordinarily high. I cannot say that I was happy to be proven right.

It is a matter of disaggregating probability and impact. Can the minister reassure us that that technical approach is being followed and is embedded among all service providers?