Chamber and committees

Thank you so much for that interesting presentation, Professor Helm. I have big questions to ask, so I apologise.

You were very clear about the importance of focusing on climate change, but said that what we are doing will essentially not be sufficient. What does the right course of action look like? What should we be investing in?

On the flipside of that coin, if you look at the countries that invest most in renewables, you see that China tops the league table. I wonder whether we need to consider what the future energy economy will look like as the world is moving away from fossil fuels. Yes, renewables are expensive today, but their costs will come down. There is a risk that, if we do not invest in the future energy economy, we will get stuck with a very 20century model, while China will have already invested in and built the 21century energy economy, and it will all be solar and much cheaper. Renewables are expensive now, but they will get cheaper and we have to see this through.

What should we be doing? Should we be looking at what other countries are doing and what the future electricity and energy economy will look like? Are those sensible questions?

I feel that I need to correct Dr. Gill—the question is not how big the lake is, but how big the loch is. [Laughter.]

I have two questions: one about heat and the other about electricity. First of all, on heat, I really appreciate your putting all this in the context of peak oil being in 1999 and the long-term prospects for gas production, because I think that that is actually important.

However, do we have a plan in that respect? The chart that you showed us indicated that heat in buildings accounts for almost half of our energy requirements. Much of that conversation is about air-source heat pumps; however, when I look at my constituency, I have to say that, if that is going to be the route, it is going to be very expensive for people to heat their homes. I do not see what the alternatives are. We are for ever saying, “Oh, we should develop a plan for heat networks.” There is legislation on the books, but I do not feel that there is any plan in that respect or any clear upgrade options for people. Do you think that we have a good enough plan for to get us away from using gas for heating, if that is the aim of the game?

How much would you expect that to be? By the way, the numbers that I was posing were just from quick google searches, so please correct me if any of them were wrong. Do you think that the prices could fall to French or US levels, or are we going to have more expensive electricity than those countries?

That is really interesting and is something that the committee should look at.

Professor Helm made a point about being realistic about competitors. To be clear, I take the view that we should be looking to transition because the planet is stuffed if we do not. However, we must ensure that we are competitive. Your numbers showed that the cost of generation was £74 per megawatt hour last year, which is £10 below the aggregate CFD cost of about £84 per megawatt hour and means that generation is being subsidised to the tune of £10 per megawatt hour. It is also about 20 per cent higher than the cost of around £60 per megawatt hour in France and is almost double the wholesale cost of around $40 per megawatt hour of electricity in the USA.

Are we building an expensive system and are you saying that those costs will reduce over time? You are saying that there is a lot of up-front cost, but will we see those costs coming down or are we building a system that is generating expensive electricity? How do we square those circles?

I hope that everyone was impressed with how slick that was.

I am pleased to serve on the committee again, as I did in the previous session of the Parliament when I was latterly, albeit briefly, committee convener. I am happy to share any insights from the prior committee’s work, but it is up to members whether they choose to heed that or whether we choose to do our own thing in the new session. I look forward to our work.

I think that the letter sets out that the Government has changed its position; it does not really set out why it has done so. It will be useful to hear the minister set that out this afternoon. If no explanation is forthcoming, it might be useful to get a response in writing.

The Government raised a number of things in advance of this meeting. Although there is a broad explanation of the dialogue, some particular points arise. We will have an opportunity to debate the subject this afternoon, but if there are still questions after that, it may be that we will wish to write to the Government about them.

One issue that we encounter with LCMs is that, very often, the two Governments decide that they are happy, but there are still potential questions for Parliament, given its role in oversight and scrutiny. Maybe we should have a look at the answers that are forthcoming and then decide via an exchange of email whether further correspondence after this afternoon’s debate would be in order. That is my suggestion.

In line with my entry in the register of members’ interests, I note that I am a company director and the sole shareholder of a company that has retail interests. It is a non-trading, holding company, which holds intellectual property for retail businesses. I am also a member of two trade unions—Community and the Union of Shop, Distributive and Allied Workers—and of the Federation of Small Businesses.

The decision as set out makes a lot of sense. However, it is important to put a couple of things on record. First, we do not always get that much notice about LCMs, and there are various reasons for that. It is important that the committee takes the opportunity to scrutinise LCMs, even if we do not have time to take as much evidence as we would want.

There is a difference between practice and the requirements of the standing orders. The standing orders do not prescribe precisely the nature of the evidence. Sometimes, it is worth being fleet of foot so that we can at least undertake scrutiny, even if it is not as full as we might like, given the time afforded to us by the timing of the LCM.

The other thing for the committee to note on this LCM in particular is that, when it comes to the economy, the way in which the Scotland Act 1998 is framed and understood by the Scottish Government means that there is a degree of overlap as to whether such matters are devolved or reserved. Therefore, there is a high likelihood that we will have further LCMs that may straddle that understanding. I hope that my language is sufficiently diplomatic, especially given that the issue clearly touches on matters such as the security of supply chains and national security.

Those are just points to note. As I say, I am content, and I understand the approach that has been taken. However, such things—not being provided with the notice that many of us would like—have a habit of flaring up.

In terms of my background, there were two components to my career prior to entering the Parliament. I started my career working as a management consultant, primarily focusing on the financial services sector, which gave me an insight into that. For the eight years prior to entering the Parliament, I ran my family’s retail business. That background gave me two distinct and quite interesting alternative views of the economy; both elements had a strong private sector focus.

Regarding the committee’s focus, I think that the overarching view of committee members at the end of the previous session was that there had maybe been some missed opportunities and that there was an opportunity for the committee to look at more structural issues in the economy.

The technology point has already been raised. There was a frustration that, given the importance of artificial intelligence and other technologies and the changes that they bring, there had been insufficient focus on those areas by the committee.

There were some broad labour points—not just about skills but, given the ageing population, about thinking about the nature of the workforce and types of work.

There are some broad infrastructure points. I do not think that the Parliament necessarily focuses in the right ways on infrastructure, which is absolutely the connective tissue of the economy.

Likewise, we need to look at really important and stark points around security and resilience, particularly when we consider the economy. An overarching point is about how we are getting investment into the economy.

Finally, the big piece is energy in the round. The energy transition is upon us, and the world is changing how it supplies and generates energy. Scotland is absolutely at the fulcrum of that change with its heritage and strength in the oil and gas sector and its transition to renewables. The committee should think about how we interact with and discuss that issue, and we must ensure that we are led by the evidence.