Chamber and committees

My last question concerns affordable housing, which I brought up before. I picked up on something in the wording of the Government’s response. In the light of the commentary made about capex—I strongly agree with that commentary, because it is a significant challenge—and FTs, the response says:

“We remain focused on delivering 110,000 affordable homes”.

Previously, the wording that was used was that “we remain committed” to delivering 110,000 affordable homes. Is that change an indicator of anything—given the significant challenges around capex and FTs that we discussed earlier?

I absolutely agree and I, too, will reflect on that in my speech.

Another barrier that I have previously highlighted is around enabling the site to be modified to become a biorefinery and to produce the likes of sustainable aviation fuel. I note that Graham Simpson pressed Graham Stuart hard on that at a previous visit to the Economy and Fair Work Committee. I agree with Mr Simpson that it cannot be right that none of the eight potential sites that have been considered thus far is in Scotland. Any measures will require a pause before starting the work to convert the refinery to an import facility. I call on Petroineos to extend its timescales to allow us all to reach a positive outcome. Petroineos has a moral duty to Grangemouth and the vital cluster that surrounds it.

I know that the Scottish Government and its partner agencies are undertaking considerable work. Indeed, as has already been mentioned, by mapping current supply chains not only do we get a proper impact assessment for today, but we gain a deeper understanding of what economic policy measures can be taken for tomorrow. Proactively enabling supply chains is a fundamental part of enabling a just transition.

Skills are also an important part of developing our target operating model and, although I realise that skills belong in another brief, maybe the minister could give more information on work that is under way in both those areas.

Finally, when I was on the Economy and Fair Work Committee we raised questions about the purpose, governance and membership of the Grangemouth future industry board. I am interested in hearing more from the minister on how she sees that vital body developing.

Grangemouth is absolutely fundamental, so I want to put on the record my disappointment about the about-turn by the potential next Prime Minister, Keir Starmer, in the latest announcement about dropping the £28 billion energy fund, which had included vital promises for Scotland. Those promises included £1 billion to modernise Grangemouth and the suggestion that there could be around 50,000 clean power jobs. Obviously, that will have an immediate impact, but the vital mood music suggesting that the UK is serious about attracting global investment is severely lacking.

To that end, I encourage a clear proposition from the Scottish Government about our ambitions. I am sure that the minister will have reflections on that.

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?

Will the member take an intervention?

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—

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?

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)