Chamber and committees

I invite SDS to respond my last question, which I appreciate was a slightly cheeky one. I wanted to wind up the session with a bit of fun.

Chris, you are on silent.

I welcome the programme for government outlined by the First Minister and, in particular, the actions to ensure that Scotland has the opportunity to become a modern, normal, independent nation as soon as conditions allow. Fundamentally, it is about having the freedom to make policy choices based on the needs of the Scottish people. There are huge opportunities to be grasped. I will focus on how best to support the Government’s ambitions in two areas: investment in transitioning to a green economy and the need to overcome barriers to progress.

The commitment to transitioning to a net zero economy is very welcome and hugely ambitious, but the Government cannot do that alone. Businesses must change what they do and massively increase investment. According to October 2019 data from the World Bank, significant investment in infrastructure for the next 15 years alone will be required, costing about $90 trillion by 2030.

We cannot move away from our reliance on fossil fuels by simply stopping the use of fossil fuels. We need to invest heavily in new businesses, such as those that are built around hydrogen technologies. Bringing to reality the power-to-X concept, which I recently discussed with lead researchers at the University of St Andrews, is a case in point, and it is particularly important for my Falkirk East constituency, which includes Grangemouth.

The United Nations has claimed that, if our investment patterns do not change, we are on course for a 3.5°C rise in global temperatures, which will be devastating for our planet. It points to, for example, the need for pension funds and investors to move quickly and at scale to decarbonise their portfolios. For us, that must include consideration of how we leverage pension investments in support of the Government’s ambitions.

Where better to start than at home? Back in April, I was disappointed to read in Business Insider that our parliamentary pension fund had not, at that time, fully divested itself of fossil fuel investments. Having looked at the 32 Scottish local authority pension funds, I note that almost £50 billion in total is currently being invested by 11 regional funds. Strathclyde Pension Fund and Lothian Pension Fund are the largest and most developed in terms of climate investment practice.

All funds acknowledge the need to address net zero ambitions to some degree. There is, however, some distance to travel, so I was pleased to note in the Scottish Government’s response to the just transition commission that it plans to develop guidelines for voluntary disclosure. My personal view is that that should be required as soon as possible, given the issues with comply or explain reporting, which is more often explained in terms of corporate governance.

There is however two-fold good news. First, internationally, the World Bank among others has identified that transitioning to a green economy can unlock new economic opportunities and jobs. The bank claims that an investment of £1 is likely on average to yield £4 in benefits. Secondly, because of Scotland’s existing progress with renewable energy and our other natural advantages, we are ideally placed to exploit the new opportunities that will create many more jobs in the future.

Economically, however, all is not sweetness and light, thanks to the current UK Government. As we look towards the future, we find that a toxic combination of Brexit and the Internal Market Act 2020 creates barriers to progress. As recent research by the Fraser of Allander Institute and others has pointed out in relation to the 2020 act,

“The effect is to circumvent not only the Barnett Formula but the devolved governments themselves.”

Part of the UK Government’s response to Brexit has been to set up funds that are aimed at addressing lost EU structural funds, but whereas our Scottish Government was in the past able to assess needs and set appropriate priorities, the UK Government’s replacement funds currently bypass the Scottish Government and set up a competitive bidding process for local authorities. What is interesting is that the lead department managing that competition will be England’s Ministry of Housing, Communities and Local Government.

I wonder whether what Liz Smith meant by her earlier comment about good news was that it will not be an English minister bypassing our elected Scottish Parliament?

Liz Smith declines to intervene. That speaks volumes.

I am not aware that such a ministry has any expertise to assess Scottish needs. The lesson here must be that until we achieve Scottish independence, we will always be at the mercy of the whims of a Tory Government in Westminster that fundamentally does not have Scotland’s interests at heart.

The member who opened for the Tories declined my opportunity to deny that the Secretary of State for Housing, Communities and Local Government for England would lead the overruling of the democratic Scottish Parliament in assigning structural funds. Perhaps Mr Fraser might want to deny that, instead.

I take it from that that you, on behalf of your members and your member organisations, will be reflecting on that matter, given the often long-term nature of property.

Given that diversity makes an economic contribution, what are the SPF’s reflections on supporting women to lead the businesses that it represents?

I assume from that that you might look at the membership of your policy team. When I checked today, I found that your policy team has three women and 23 men, which means that women make up less than 12 per cent.

In your submission, you call for

“greater capitalisation of the Scottish National Investment Bank”.

I agree with that view. You also comment on the need for a “National Infrastructure Agency”. I also agree with that view. In that light, would you support increased borrowing powers for the Scottish Government to enable those much grander ideas to be taken forward? I am a bit concerned that, throughout our discussion, we have tended to focus on small taxes, such as LBTT, rather than on the shifts that will really make a difference to economic growth.

I think there is just one more response. Adam, did you want to contribute before we finish off this thread?

I thank Joanne Walker very much for her submission, which I enjoyed greatly. However, in the interests of time, I will confine my questions to Mr Robertson. I should declare that I have an interest in some buy-to-let property and that I am an ambassador for the all-party parliamentary group on fair business banking, which is based at Westminster.

I want to gently challenge you, Mr Robertson, in relation to the discussion that came up earlier about your comment that

“our well-respected property legal system is being undermined by changes to the landlord-tenant relationship”,

which you say

“could create a barrier to much needed future investment.”

In light of the considerable uncertainty in the trading environment, surely as big a factor is access to finance for businesses and the risk appetite of lenders, be they private equity or banks. Do you accept that that is the case?

I will move on to another area that we have not yet touched on. I am interested in your organisation’s reflections on the desire for home working, or at least a version of hybrid working, that has arisen—indeed, we can see it in our meeting today. How will that cause and necessitate change for the people who you represent?

That seems fine.