Chamber and committees

As I mentioned earlier, mainstreaming is really important. Policies cannot be developed in silos. We must take account of the impact on everyone so that we do not place a disproportionate burden on any part of our communities.

Earlier in the meeting, we discussed the Climate Change Committee’s report and the challenges that it lays out. The solutions to many of those challenges are quite radical, so we must think about how we bring people in Scotland with us in relation to some of the measures that might have to be taken. Patrick Harvie is working on decarbonising heat in buildings, because one of the biggest pillars of the net zero journey relates to how we decarbonise Scotland’s buildings and tackle those emissions. Clearly, the public sector cannot pay for that alone. We estimate that it will cost more than £30 billion to decarbonise our heat in buildings.

The Government has brought forward a very ambitious £1.8 billion of investment over this session of Parliament towards that cost. That is a substantial budget but, when we put it in the context of the £30 billion that will be needed to achieve that decarbonisation by 2030, give or take, we can see that the public and private sector have got to play a role as well, so that is a big challenge. With regard to the just transition, we have to ensure that those who are least able to pay are not left with a disproportionate burden, so we have to support people in that context.

Clearly, my officials and I are working to ensure that the various policy teams across Government are now working on the just transition, so there is a lot of work going on to co-ordinate the work for the plans that we mentioned earlier. The outlines for those plans will be published next spring. That is happening, and my team and I are obviously instigating that. I also sit on many of the various sub-committees. The main sub-committee is the climate change sub-committee, which I sit on as the minister for just transition. I am there to bring the just transition dimension to that. As we discussed, some of those policies are required to achieve our targets, and I am also there to represent the just transition dimension of that debate.

As well as being the minister for just transition, I am the minister for employment and fair work, all of which has a just transition element to it. As we tackle inequalities, we have to make sure that people have good jobs—not just green jobs but good green jobs. Therefore, I am also feeding in the just transition dimension to the economic dimension of the Government’s work, which is about making sure that people are well paid.

The plans are not written yet, so I cannot pre-empt everything that they will say, but, for example, each of those plans will have to contain a skills pillar. Skills are vital for all these areas as we go forward, because we need to ensure that people are upskilled and reskilled. That will be in every plan. Obviously, that is crucial with regard to milestones and actions taken to ensure that we are meeting the skills needs.

The Government is committed to delivering the £500 million fund over 10 years, with £20 million being allocated in the first year. However, many of the projects that have come forward are multiyear projects, so we have committed up to £50 million for the next four years; some of those projects will account for that extra money. The Scottish Government will introduce its budget in the next few weeks, including next year’s funding for the just transition fund. We are committed to that and have no plans to change it.

There are challenges, because the money is capital funding and I am sure that many projects will require revenue funding, but we can only do what we can do. We have a capital budget, and we are using financial transactions. There are always challenges, because there is not enough resource to achieve what people want to achieve, and the UK Government, the Scottish Government, the private sector and the public sector all have to play their roles.

I know that the Scottish National Investment Bank is funding some just transition and decarbonisation projects, but I do not have details in front of me. It is playing a role and it has a big responsibility with regard to supporting the net zero transition. It is important to say that, across the board, our enterprise companies and the Scottish National Investment Bank are signed up to prioritisation of the transition to net zero, so they are playing a role. They are also playing a role in peatland restoration and other issues.

SE is making substantial investments in projects that are involved with decarbonising certain sectors. I do not have a list of the investments in front of me, because they are not part of my responsibilities, but I know that SE is playing that role and that it will have to do more of that in the future.

Catriona Laing might be able to add to that.

Zero Waste Scotland and Scottish Enterprise—in fact, the enterprise companies generally—are running schemes to help SMEs to take advantage of net zero opportunities. Zero Waste Scotland runs a loan scheme for SMEs. Scottish Enterprise and Business Gateway are now giving advice to small businesses about steps that they can take for net zero as well.

A lot more must be done on that. I have a vision for the situation that we must create. I talk about just transition plans for sectors of the economy and place-based just transition plans for Grangemouth. In 2024, we will look at regional just transition plans for regions of Scotland.

We would also like every business and organisation in Scotland to have a just transition plan, so we need to work with the business community. Let us take the example of a car mechanic business that works with petrol and diesel vehicles. We have to find a way to support such a business to have its own just transition plan, so that, as petrol and diesel cars are phased out in a few years’ time, the business will survive and people will still be in work. We have to work with the business community to—

The Just Transition Commission is unique. It has been encouraging to hear from other countries that they are impressed by the fact that we have such a commission. We have also had a lot of good feedback from within Scotland about the people who are on the commission.

Its role is to give independent advice to Government, but we have a relationship. I have met the new commission only once formally in the past few months, but we will be having much more intense engagement going forward. The commission has invited us to ask it for advice and whether there is anything that it can help us with. Obviously, it is considering some of the big challenges and is keen to know what our priorities are so that it can give us the right advice. That will intensify our engagement.

We have of course accepted the recommendations from the commission’s two reports. We will respond to the second report and we have accepted all the recommendations of the first one.

It is a good relationship. The commission will hold our feet to the fire—that is why it is there—but it will also play a constructive role in giving advice. From the commission’s reports, and from our discussion today, it is clear that there are no easy or quick solutions to some of the issues that we are speaking about. Also, we are doing this for the first time. I think that the commission recognises that, and I hope that we all recognise it as we go forward.

The commission will play a very valuable role.

That is a good question, and it is on something that we have wrestled with. We want to get the fund under way, because we do not have time: we cannot wait several years for perfect plans for the future, especially when we are in an evolving situation. We therefore chose the route of no-regret decisions—that is, all decisions will contribute in their own way, because they are all good projects. There are large projects, smaller projects, community projects, strategic projects, science projects, skills projects and so on, so there is a good basket of things that are required for the just transition in the years ahead.

We intend to use the next two or three years to develop a more strategic approach. What we are funding just now fits in with that direction of travel, whether in relation to hydrogen or plugging the skills gaps that will need to be addressed in the years ahead. We are confident that all the projects are good and robust projects that will contribute to the just transition.

However, we know that we have to work on the fund for the north-east and Moray in relation to the strategic robustness that is required to ensure that it is transformational. We have to ensure that when we look back in 10 years, we will see that we have invested £500 million of public money in transformation, which is a big challenge. I hope that some of the projects will be transformational, and that when we will look back, they will have benefited not only the north-east of Scotland but the rest of the country.

I thought that you were going to give me a warning there. [Laughter.]