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You have characterised the situation very well. On the timescales, HS2 is only just getting started, so it is not impacting things today, but does it have an impact on strategic thinking for the future? Yes, of course it does. High-speed rail is hugely important, and there are international examples where it is well embedded in transport infrastructure. Yes, we should be in a position to exploit and develop it more.

Speed is an issue, but capacity is probably more of an issue. The line was going to help in that regard. If it was going to be done seriously, the work would have started from both ends at once. It would have started from Scotland and London and met in the middle. Clearly, however, that is not what it is all about; it is about getting commuters into London, rather than considering the whole country.

That is an issue, but it is more of a long-term issue, which affects strategic thinking. In the immediate term, there are other things that we can do and that we are doing to address the issue.

Much of that will come down to the specific opportunities that present themselves. I am not closely involved in the discussions with transport colleagues who are working across this, but where opportunities present themselves we will look at where railhead facilities can be developed to allow more products to go on to rail, rather than road. Much of that will be where there are volume products and there are specific opportunities to take X hundred trucks off the road by facilitating a rail connection or something. That work is on-going.

I am directly involved in a piece of work that directly supports that on direct port shipments from Scotland. I have convened a group of port operators, airports and others to understand what volume of traffic leaves Scotland by truck for ports in the south of England and how we can address opportunities to get more of that on ships leaving Scottish ports. There are commercial realities there and it is about understanding those and what other things we can do to move the locus of calculation to make it easier for people to use Scottish ports. I hope that that work will yield some significant results.

I am from a manufacturing background, so it is something on which I am hugely focused. We have done a lot of work off the back of the success of PPE manufacturing—it was great to hear that work being referenced several times in your earlier evidence sessions—to formalise the process and see where else we can apply it.

There are two parts to the issue, the first of which is procurement. I have responsibility for procurement, and the Scottish Government is reaching out across the whole of that £13 billion spend to public sector bodies, including local government, Transport Scotland and the NHS, to stress its importance. The SHIP work in the health service is a key part of that, and, increasingly, it is drawing through opportunities.

The other side of the issue is the enterprise agencies. They are hugely seized of and focused on the importance of the supply chain, and are working hard on it. The agencies were a critical part of the work that we did on PPE.

It is about joining everything up. For example, we might see that, although the public sector is spending £100 million on specific commodities or in a particular sector, most of that money is going abroad. We need to look at which businesses in Scotland might be capable of stepping in to meet those needs, and what they need to allow them to bid for a contract.

Is it to do with having the right skills and qualifications or the right standards in place? Is it a question of capacity or investment in equipment or premises? Is it logistics? Which factors are preventing a Scottish company from bidding? The enterprise agencies and Skills Development Scotland can then wheel in and say, “We can help you with this or that.” It is about getting suppliers—not just one supplier, but a series of them in a sector—to a place in which they can bid for those contracts, and creating the capacity and capability to bid for those contracts.

It is important that we join all that up in an intelligent way, and in order to do that, we have to drill down to understand where we are trying to operate. We currently have in train programmes for PPE, and we are looking at reshoring our generic medicines manufacturing. We also have programmes for heat pump manufacture; there are a couple of opportunities in that regard in Scotland, but we need more. A lot of that also involves looking at the sub-suppliers who supply the heat pump manufacturers in Scotland. How do we get more of that content in Scotland? We are also looking at electrolysers for hydrogen, which will be a huge area in the future.

As I mentioned earlier, we are looking at timber frame construction, from forestry all the way through sawmills to manufacturing facilities and construction sites in Scotland. Along with the construction sector, we are also looking at how much of that will involve off-site manufacture and modular build.

We are currently running about seven or eight programmes, and on top of that we have all the ScotWind stuff. I should clarify that the contract for ScotWind requires that, if the developer does not follow through on the supply chain development plans and use local content, there are penalties as a consequence. Contrary to what was suggested earlier, that provision has teeth.

I can talk about the subject for hours because I am passionate about it—it is hugely important and there is a huge amount going on. However, I will stop there, given the time.

There is green cement—there you go. It can be done, but it involves huge capital investment in the plant. We are talking to Scotland’s only cement manufacturing plant about its plans in that regard. Green cement is very much on the radar, and it is part of the mix in construction. As I said, timber—for example, products such as MASSLAM timber solutions that can, structurally, do the job of cement—will be an important part of that.

Our approach involves looking at a whole range of different aspects. The Construction Scotland Innovation Centre in Blantyre is doing a super job in leading on that stuff, with input from Heriot-Watt University and others. It is a key strand in the Scottish construction leadership forum, so we are absolutely on that.

As I said, significant private sector investment will be required to deliver on that, but the sector understands that that is the direction of travel. We want to make it as easy as possible for people to decide to invest in green cement, for example, in Scotland as opposed to elsewhere.

Food supply is another great example. Again, a lot of different things are happening there. In conversations with local authority purchasing departments and others, it often comes down to the fact that, while there is a keenness to buy locally, the capacity is not in place to do so, because of the volumes that we are talking about. As I said, we need to get local suppliers to a position where they are able to supply at scale to meet the procurement requirements. We are doing a lot of work to join all that up as best we can.

The food miles part of that is an important criterion, so we need to think about how we address that and factor it into the procurement decisions. Also, there are moves afoot internationally on carbon accounting and other measures at EU level and elsewhere. We need to take those factors into account but, again, that will impact on the cement discussion that we just had.

A lot of things are happening internationally and we are moving forward to take advantage of them. I know that the committee took evidence from the food and drink sector, and I have officials following up on some of the examples that those witnesses gave of difficulties in accessing procurement for various reasons to determine how we learn from those examples and make our processes more effective at delivering what we all want.

There is quite a lot in that question. I will take the opportunity to give the committee an update. As members will know, the UK Government’s free port proposals came out more than a year ago. We looked at them at that point and decided that there were some fundamental gaps that meant that we could not sign up to them. As, I am sure, the committee will appreciate, we do not want to engage in a race to the bottom on environmental standards, labour standards and pay rates. We were seized of the requirement to ensure that a net zero component was central to any such initiative.

We discussed the issue with the UK Government over the course of 2021. In September, the UK Government came back to say that under no circumstances would it allow us to make the payment of the real living wage a requirement. It was also very lukewarm on the net zero requirements. As a consequence, discussions on the issue stopped. We then signalled that we were keen to move forward with our own proposals.

I can let the committee know that the UK Government came back to us to say that it wanted to reopen discussions. Those discussions are on-going. We had hoped to conclude them before the end of the year, which is when we said that we would publish our proposals. However, given that the discussions are on-going and could be reaching an end, we have decided that it is important that we follow that process through to its conclusion before taking the next steps.

We are hopeful that we will make progress on that and that a solution will come forward. At its core, that solution will include our requirements on net zero and fair work. That will be good for Scottish businesses, Scottish workers, the Scottish economy, communities and the environment.

The restrictions are another barrier. They make life difficult and they make business difficult. They make harder things that should not be that hard. They make things uncertain, as well, because of all the paperwork requirements. All kinds of clearances are required, and there are various rules and regulations that just put red tape in the way of businesses. The situation is hugely unhelpful. It clogs up supply chains and eats away at the agility of businesses and their capacity to respond as they should.

As you said, the increased restrictions have just come in, so it is too early to say what their specific impact has been. That is another example of the UK Government placing ideology above the needs of business.

I was talking about that before, and I have already said that significantly more people are attracted to Scotland from the rest of the UK than leave Scotland to go and live in the rest of the UK, so we have a positive migration level in that respect. On attractiveness, by that measure we can see that Scotland is significantly more attractive than the rest of the UK, and the gap is widening.

On inward investment, likewise; Scotland has, for the past seven years in a row, consistently outperformed every part of the UK apart from London. When it comes to research and development funding, the latest data also shows that Scotland outperforms London.

Furthermore, the data for last year—the year of Covid—shows that Scotland’s inward investment increased by 5 per cent while the UK’s inward investment was at minus 12 per cent and the EU’s was at minus 13 per cent. While inward investment across Europe was going down, it was going up in Scotland. Scotland is an attractive place for inward investment. Our inward investment plan is hugely focused on increasing Scotland’s attractiveness to inward investors. We have more work to do in that regard, but we are in a much better place than many parts of the rest of the UK, when it comes to attracting inward investment.

Absolutely—I accept that. As I have said, I am hugely engaged and I am very keen to talk to businesses to see how we can help them further.

The rest of the world is focused on a lot of things. This is about exploiting the opportunities that exist; Scotland is extremely well placed to take advantage of opportunities in many of the sectors of the future, including renewable energy, life sciences, the space sector, financial technology and financial services, manufacturing, and food and drink innovation.

As has already been highlighted in answers to questions, what is stopping Scotland is our not having access to the large EU market—exports and imports—because of the restrictions that are caused by Brexit, and our not having access to labour, through the ability to tailor immigration programs, to fuel our growth.

More broadly, I note that Scotland does not have control over the full suite of welfare levers, which would allow us to tailor the system to support people in order to tackle poverty and help to smooth their transition back into work. In many cases, the UK welfare system militates against that. I could go on and on.

The things that hold Scotland back include our not having those levers and not being a normal independent country that can take its own decisions, despite having a suite of advantages, such as that it has the most highly educated population at tertiary level in Europe. Despite all those advantages, Scotland is not able to maximise opportunities and is not as well off as Denmark, Norway, Sweden, Finland, Switzerland or other normal independent countries of Scotland’s size. Those countries have far fewer opportunities than we do, but they do much better than us. Scotland is held back because of the union; the sooner we are out of it, the better.

I can give you that commitment, convener. You are absolutely right. Resilience is important, and there are other aspects beyond what we have discussed today that are part of that broader resilience theme. I am an old manufacturing guy, so the need to do more manufacturing in Scotland is hugely close to my heart, and that kind of focus is essential in developing supply chains that support Scottish businesses and consumers where we can do so. That is hugely important.

The reality, though, is that businesses buy where it makes sense for them to do so, and all we can do is put in place measures that make such decisions easier for them. Interestingly, when we managed to switch production of PPE to Scotland, there was concern that everything would switch back to China again as soon as the markets opened up. However, that has not been the case, and we have managed to hold the position for a load of reasons including innovation—with, for example, Alpha Solway’s move to transparent masks opening up new markets—automation and other factors that have facilitated that. The focus is there, but this is all about making lots and lots of intelligent decisions locally in different supply chains and ensuring that they all add up to make a difference. The PPE example shows that we can do this, that we can do it quickly, that we can hold on to it and that we can use it as a platform for export if we make the right decisions in those settings.