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Yes, that is part of it. If you look back at the process for negotiating trade deals, you will see that, in a paper that we published in 2016 or shortly thereafter, we highlighted how we saw the Scottish Government and other devolved Administrations being involved in defining, negotiating and implementing those trade deals. The UK Government has been very unhelpful with regard to working with us on those aspects, and the opportunities for scrutinising those deals are very, very limited. As you have said, the deals could evolve and change, and how they would then be implemented is something that would have to be taken forward. Through this process, UK Government ministers are giving themselves powers in that area that impinge on devolved aspects.

Yes, the Procurement Bill will to some extent supersede this bill. Officials can talk about that in a minute, but the fact is that, at this stage, we have the same concerns about both of them. We are not comfortable with either.

Thank you, convener. I am grateful for the opportunity to speak to the draft order, which relates to the audit of the Scottish Futures Trust. SFT is an non-departmental public body that acts as a centre for expertise on infrastructure. It works across the public and private sectors in Scotland to improve the efficiency and effectiveness of infrastructure investment.

SFT was established in 2008 as a public corporation and company and, as such, it was audited by commercial audit firms. In 2011, SFT was classified as a non-departmental public body by the Office for National Statistics. The majority of NDPBs are audited by the Auditor General for Scotland, and the Scottish Government and SFT have agreed that SFT should follow suit. The order will give the Auditor General the power to appoint an auditor to SFT in future.

The change is not a reflection on SFT’s previous audit arrangements and it has no bearing on its functions. SFT has always been audited by reputable commercial auditors. SFT’s annual accounts to date are available on its website and they have been laid at the Scottish Parliament each year. This is an administrative change to bring SFT’s audit arrangements into line with those of other NDPBs.

In practical terms, we do not expect the change to have a significant impact for SFT. Audit Scotland could undertake the audit itself or it could contract the audit to an external audit firm such as the firms that were previously used by SFT.

I am joined by Rebecca Winterstein from the infrastructure and investment division and remotely by Ninian Christie from the Scottish Government legal directorate. They will be happy to join me in answering any questions that the committee has.

That is a good question. A number of bodies had to go through the process and we have been working our way through it. As a private company, the SFT will have had contractual arrangements with commercial auditors for a number of years and it will have had to work through them. That was not the whole period; it was the latter period. In effect, this is just an exercise to bring things into line.

I do not know about looking retrospectively at previous accounts. I will ask officials to comment on the technicalities on that, but I think that there will be a discussion with Audit Scotland on the best arrangements. It is quite likely that it will look to continue using a commercial audit firm, as has happened in the past. However, that will be a matter for Audit Scotland. Rebecca, do you want to comment on the retrospective aspect?

Those accounts will have been published, so they are available to be looked at anyway.

At the moment, the SFT is paying for the commercial audit. On which part of the public sector will pay for it going forward, I assume that it will still be the SFT, but we can clarify that if it would be helpful.

Thank you for the opportunity to speak to you this morning about the legislative consent memorandum for the UK Infrastructure Bank Bill. The bill was lodged at Westminster on 11 May, and the legislative consent memorandum was lodged at the Scottish Parliament on 2 September.

The Scottish Government fully supports the aims of the UK Infrastructure Bank, which are broadly aligned with ours. Investment in infrastructure will be critical to meeting our commitment to a just transition to net zero and it plays an important role in supporting regional and local economic growth. The purpose of the UK Infrastructure Bank Bill is to put the bank on a statutory footing by placing its objectives in legislation. It is intended to create transparency, accountability and governance.

The UK Infrastructure Bank has already made its first investments. It has been operating on a non-statutory basis since it was established in July 2021. We welcome the £22 billion of financing capacity and the advisory services that are being made available to local authorities.

Although our aims are currently aligned, the policy landscape in Scotland differs from that of the rest of the UK, with our infrastructure investment plan, our global capital investment plan and our national strategy for economic transformation providing the framework for our policy priorities. Additionally, Scotland’s climate change plan sets a target date for net zero emissions of all greenhouse gases by 2045, which is five years before the UK Government target. The timeframes and nature of Scotland’s transition to net zero will therefore be different from those of other parts of the UK, and delivery will follow a different approach. We have therefore been seeking assurance that Scotland’s interests will be suitably reflected in the design and delivery of UK Infrastructure Bank activity.

The bill as introduced would allow HM Treasury by regulations made by statutory instrument to amend the UK Infrastructure Bank’s functions or the meaning of “infrastructure”. We appreciate that building in flexibility will allow the UK Infrastructure Bank to be responsive to changing priorities over the longer term without a requirement to update legislation. However, it also creates a future risk of divergence from Scottish Government priorities.

There is a clear overlap between the strategic objectives of the UK Infrastructure Bank and those of the Scottish National Investment Bank, particularly with regard to tackling climate change and supporting regional economic growth. In order to ensure that investments deliver maximum impact, we believe that it is imperative that the two banks are able to work together to identify and support appropriate infrastructure projects in Scotland. It is also crucial that Scottish interests are appropriately represented and that there is an awareness of our economic context.

We are therefore seeking an administrative mechanism such as a memorandum of understanding between the UK Infrastructure Bank and the Scottish National Investment Bank in order to support continued alignment in the approach over the long term. We have also asked for confirmation that there will be no funding implications with respect to the Scottish budget.

Scottish ministers are clear that the UK Infrastructure Bank Bill has merit, but some of the clauses continue to cause constitutional concern. The Cabinet Secretary for Finance and the Economy wrote to the Economic Secretary to the Treasury, John Glen, on 9 June offering in-principle support for a legislative consent motion, but that letter made it clear that legislative consent was contingent on the assurances that I have outlined being provided.

We remain in discussions with the UK Government about the assurances that we have requested. I am hopeful that we may be able to secure those, but we are still to receive a formal response. For now, therefore, I cannot recommend consent to the UK Infrastructure Bank Bill as it stands.

Thank you very much, convener.

The Trade (Australia and New Zealand) Bill is very narrowly focused. Although we have some wider and significant concerns about aspects of the free trade agreements with Australia and New Zealand, particularly with regard to agriculture, the focus of the bill itself is only on the implementation of the Government procurement chapters of those deals.

Amendments are needed to procurement legislation to extend duties of equal treatment to bidders from Australia and New Zealand and to make some minor amendments to procedural rules, and the UK Government has opted to confer a power on ministers to make those amendments. As with the power in the Procurement Bill that we have just discussed, the power is drafted too broadly and will be conferred concurrently on UK ministers as well as Scottish ministers with no requirement on UK ministers to secure the consent of Scottish ministers before exercising it in devolved areas. That is clearly unacceptable.

As I have said, the bill itself is relatively narrow in its focus on the procurement chapters of the two agreements, but it would be remiss of me not to say a few words about the agreements more broadly. The Scottish Government has had no direct role in negotiations, and we are very concerned by the impact of both agreements. Those concerns are particularly acute with regard to agri-food. The potential for imports to increase is huge: Australia currently exports 5,000 tonnes of beef to the UK each year, but the agreement will allow 35,000 tonnes in the first year, with the figure increasing each year after. Of course, Australian producers do not have to adhere to the same animal welfare and environmental standards that Scottish farmers do.

It is a similar story with the New Zealand agreement, as a result of which access to the UK beef market will rise to 60,000 tonnes by year 15. There are almost no benefits in this deal for Scotland’s food and drink sector. All that it achieves is exposure of the Scottish agricultural market to the most export-oriented food producers in the world.

To what end? UK Government analysis shows that the deal with New Zealand will deliver a 0.03 per cent benefit to UK gross domestic product over 15 years, with the Australia deal contributing 0.08 per cent. At the same time, the UK-EU Trade and Co-operation Agreement will lead to a contraction of UK GDP by 4.9 per cent over the same period. Of course, the economic self-harm of leaving the EU should come as no surprise. It is notable and worth highlighting that the EU has secured the same market access to New Zealand for its own exporters as the UK, but at a much lower cost to its domestic producers.

Being outside the EU and tied to a UK Government that is hell-bent on reaching trade agreements at almost any price so that it can pretend that Brexit is working is an invidious position to be in, but it is the position in which we find ourselves, and we must try to protect Scottish interests as best we can. The impact of these agreements will be felt throughout Scotland—

The cross-border co-operation on procurement is worth exploring. In effect at the moment, on either side of the border, organisations will put in place framework agreements with suppliers to enable them to make use of more advantageous procurement conditions. Organisations on either side of the border will leverage those agreements with the supply base to best effect. That situation already happens. Agreements are created by Scottish bodies with the supply base that organisations south of the border will leverage, and likewise in the opposite direction. Part of the concern that we have is that one effect of the bill as introduced would be to close off that co-operation because of the way in which the bill is drafted. It is a concern that it makes that process harder than it is at the moment. Do you want to comment on that, Alasdair?