Seòmar agus comataidhean

I was interested in what you and Gary Gillespie said about exports and evidence of impacts that is still to emerge. Perhaps inadvertently, Gary gave a very good explanation and reminder of why proximity in relation to trade is vital. I understand that we will see the global impacts of the geopolitics that is going on unfold, but in relation to proximity impacts and our trade with Europe, do you have a sense, in numerical terms, of the additional costs that have been incurred as a result of Brexit? How will those additional costs impact on the development of resilience in supply chains? Brexit is on-going and is important in relation to proximity. Do you have any further reflections on that?

I want to pick up on another issue that we touched on earlier: that of risk relative to innovation, which is one of your guiding mantras. It almost seems counterintuitive that, at present, when geopolitics is in a state of flux, there is a requirement for more innovation, including with regard to net zero.

How confident are you that you have landed it just right in the current climate? As you alluded to, if you only ever invested in Government bonds, you would always get a guaranteed return. There is a sweet spot, which I regard as quite challenging, given the nature of how the bank is set up and structured. Not everybody necessarily understands how that translates into risk appetite, and it is not all that common for parliamentarians to understand risk appetite. Do you have any further reflections, in the light of the current state of geopolitics?

It has been very brave to do a 10-year macro strategy. I regard it as a framework strategy, and have read the 118 pages of analysis underneath it. In relation to other important areas, the section on our financial services and fintech sector, which are of personal interest to me, includes Scotland’s leading position in responsible and ethical finance. I am on the record as being fairly active in that area and in highlighting where lax governance has allowed extensive corruption in the UK. Very conservative figures put that at £290 billion—or 15 per cent of UK gross domestic product—every year, which is utterly shocking. My concern is the potential impact that that could have on Scotland’s brand, which is viewed as being trustworthy, for Scots who do business around the world and for the country itself. Have you managed to consider that specifically, and have you looked at how we might heighten Scotland’s brand profile to avoid issues around global corruption in relation to the City of London. Can you reflect on that?

Good morning, and thank you very much for attending today’s meeting.

I want to pick up on an earlier point about subsidies—Willie Watt referred to it, but then moved on. In your submission, you comment on the new UK subsidy control regime and note that, at this point in time, there is not really any clarity in that regard. Having followed up on that myself, I understand that there are some principles that may ultimately rely on legal challenges leading to precedent. That seems to be a very clumsy way of doing things.

I have two questions. First, have you had any further insights of which the committee might not be aware? Secondly, what impact might that approach have on your investments?

You have looked at other countries and set out that evidence in your report, but, as you have highlighted, part of the complexity relates to the fiscal transfer process, which is particularly complex for the Scottish Parliament. Did you consider other states where similar fiscal transfer models exist?

That will be in the Official Report.

You have done a great job with your report, Callum Blackburn, particularly in restricting it to only 90 pages, such is the complexity of the issue. There is a backdrop to it, of course. The UK Parliament Public Accounts Committee’s report makes it clear that the UK Government has a plan, without answering the key question of how it will fund the transition to net zero, including how it will deliver policy on replacing income from taxes such as fuel duty. It does not even provide a general direction of travel on levies and taxation, which would kind of nail it.

Few could disagree with the principles that you set out in your report, but it immediately struck me that there must be areas in which, if you adhere to one principle, you will be moving against another. Are there any particular areas that you would want to bring out that have not been brought out thus far? You have given some examples already, but it would be useful to have more examples, because I would not in any way want to underestimate the complexity of what we have to do.

Like everyone else, I could ask a multitude of questions, but we would be here all day.

For the record, I point out that the Scottish Government is recommending refusal of the LCM.

Okay. As I have been invited to do so, I will.

You allude to some of the potential limitations introduced by the United Kingdom Internal Market Act 2020 and the Subsidy Control Bill. The Scottish Parliament has refused to pass a legislative consent motion on that bill, and the Economy and Fair Work Committee, of which I am also a member, has written about it in quite stringent terms. Are there any other areas that you want to highlight in that respect? I suppose that there is a timing element to consider, given that, as you have pointed out, initiatives that the Scottish Government might attempt to introduce—and which might be trying to do the right things for the right reasons within a very restricted framework—could fall foul of that bill. You have provided some commentary in your report, but you have not chosen to give any specific examples. Are there any such examples that you would like to highlight now?