Thank you for the opportunity to appear in front of the Committee. I am Douglas Alexander. I have been in post for a few weeks as the Secretary of State for Scotland. I will ask my official and ministerial colleague to introduce themselves.

Thank you for the opportunity to appear relatively early in my tenure. Let me set out the priorities as I see them for the Scotland Office. The first is working with Departments across Whitehall to maximise opportunities in key economic sectors such as defence, energy, life sciences, financial services, and food and drink. The second is managing the risks of economic shocks across Scottish industry. This includes working closely with colleagues in the Department for Business and Trade and DESNZ on the risks associated with, for example, the closure of the Grangemouth oil refinery. The third is ensuring that fiscal and energy policies best support skills in existing and future supply chains in the North sea and guarantees UK energy security. The Scotland Office will work with other Departments to ensure that policies affecting renewables, oil and gas, and the North sea are pragmatic, protect Scottish workers and UK consumers, and guarantee UK energy security. It is also ensuring the effective and timely delivery of UK Government local growth programmes in Scotland and, finally, continuing to deliver the Brand Scotland programme. Those are the key priorities that I have set for myself since coming into office.

First, let me pay tribute to my predecessor, Ian Murray, and the work that he and Kirsty did during the first 14 or 15 months of this UK Government. On arriving in the Department I said I was keen to build on the priorities that had been set by the outgoing Secretary of State. In relation to Brand Scotland, in my previous work as trade policy and economic security Minister and also as a Minister in the Cabinet Office, I saw the value of being able to effectively champion and promote key sectors of the Scottish economy internationally. I began the week of the reshuffle onboard HMS Prince of Wales, the flagship of the Royal Navy, making the case for Scottish and UK exports and businesses. I then travelled to South Korea where again we were making the case for the opportunities in trade. In relation to Brand Scotland, I have a significant understanding of the importance of being seen to be beating the drum and making the case for Scottish business around the world.

There is a formal process, which I am sure Fiona can speak to, for annual reports and the standard work that is undertaken. We have a governance structure involving non-executive directors and others, but in that sense I have been very much reading myself into the brief in the last few weeks. That has afforded me the opportunity as the incoming Secretary of State to take a view as to where we need to focus. It is inherent in the nature of the Department’s work that as well as having key priorities—many that were set out for us in the manifesto that we were elected on back in July of 2024—we need to have the capacity to be reactive. My favourite definition of strategy is from the Prussian military strategist von Clausewitz who said it is the pursuit of a single idea through changing circumstances. That is very much a guide as to how we approach matters under my leadership in the Scotland Office. We have certain key priorities that we are working to but we recognise that sometimes day by day, week by week or month by month we can be confronted by new challenges and also new opportunities.

The most salient example of that probably is I understand I am the first Secretary of State for Scotland to have travelled abroad with the Prime Minister to make the case for Scottish business and Scottish jobs. Shortly on taking office I travelled with the Prime Minister and more than 100 businesses and vice-chancellors—including the vice-chancellor of the University of Aberdeen, the Scotch Whisky Association, the Port of Leith Distillery and a number of other Scottish businesses—to India, met personally with Prime Minister Modi and made the case for the implementation and the utilisation of the truly landmark trade deal that we secured last year that will be a huge opportunity for Scotch whisky. India is basically the largest whisky market in the world by volume, but historically we have had very high levels of tariffs. To my great regret, when I was Secretary of State the last time I failed to get the tariffs lowered on Scotch whisky. We saw tariff levels of about 150% in recent decades in India, despite being a huge brown spirit market. The deal that we struck with the Indian Trade Minister, Piyush Goyal, and the Indian Government last year means that we will see those tariffs fall first from 150% to 75%, then down towards 40%. It is a transformative opportunity for the Scotch whisky industry, but trade deals rely on being utilised. They cannot simply be documents that lie on the shelf. Literally within a month of being appointed I was on a plane with the Prime Minister, making sure that Scotland’s interests were being reflected not only in the deal that we had done but in the utilisation and implementation of that deal. That is emblematic. This is not my first rodeo—he said, trying to make himself sound younger than he is—having served in a range of Government Departments over the years. I first served in the Department of Trade and Industry, the predecessor to DBT, back in 2001. I was then in the Cabinet Office. I was then in the Foreign Office as south and south-east Asia Minister, trade and investment Minister. I then moved to the Europe brief and covered Europe. I then moved to Transport as well as to Scotland, and then to International Development. Latterly I started in July 2024 as economic security and trade policy Minister. I was then given additional responsibilities in the Cabinet Office for intergovernmental relations in February. I cite that not to bore you with my CV but simply to say that I hope to be able to put those networks and relationships and, frankly, experience of how other Government Departments think about Scotland at the service of the Scotland Office. One of my observations is that we are in the business of solving problems and seizing opportunities and that often involves the formal responsibilities of being the voice for Scotland in the Cabinet room and also the network of relationships on which any Government operates. It is being able to pick up the phone and have informal conversations, knowing officials and Ministers across Government, and I am very keen to put that at the service of Scotland.

I was too polite to make the observation.

I tend to find that Ministers once assuming office are entirely in favour of ministerial continuity and I adhere to that maxim, definitely.

Thank you for your three questions. Let me try to deal with them each in turn. First on GB Energy, I had the opportunity to meet with GB Energy leadership in Aberdeen on Thursday. I would respectfully and politely observe that we promised to set up a publicly owned energy company, the first in 70 years, and our Government have done it, unlike some other Governments that have not done it. In that sense the work is getting under way for GB Energy. On the jobs, the intention was never to create jobs for 1,000 civil servants working in a large office in Aberdeen. The potential to be harnessed was to ensure that in Aberdeen and across the north-east—and indeed across Scotland and the UK—we use £8.5 billion of taxpayer money to build the supply chain, to secure a strategic investment for the taxpayer and to deliver economic security. If we have learned anything since February 2022 when we saw the invasion of Ukraine it is that ultimately we need to effect that transition, not only for the environment but also for economic security. In that sense I can assure you the work is under way with GB Energy. When we made a promise to establish a publicly owned energy company, unlike some other Governments we deliver. Secondly, on energy prices, that was a commitment that was made for the Parliament and in that sense that work is under way. A critical element in being able to deliver energy security and in time see bills come down is to be able to have a better transition than has been effected by our predecessors. The number of jobs that were lost in the North sea over the last decade is about 70,000. Whether it is the North sea or Grangemouth, one of the dispiriting aspects of coming to office and seeing what had been left by our predecessors was the absence of any meaningful plan. I pay generous tribute to the Select Committee report on the transition. I read it on the plane to Aberdeen last Thursday morning and it no doubt significantly improved the quality of my observations and questions when I met with major oil and gas producers and renewables producers in Aberdeen on Thursday. We will, of course, in time reply formally to the Select Committee report but we were grateful for the observations contained therein. What does a pragmatic approach actually look like? We were able to announce the confirmation of UK Government money—as I recollect, £17 million—for the energy transition zone in Aberdeen. I met personally with Sir Ian Wood, a long-standing acquaintance and friend, and was hugely encouraged by what he told me about the scale of ambition for the energy transition zone. With the commitment of those many millions of pounds by the UK Government we were giving very tangible expression to the pragmatic transition.

Yes. As I say, the ambition was never to judge the effectiveness of UK Government spend by—with respect to the civil servant sitting on the panel—the number of civil servants that we employ or the number of bureaucrats who are working on public policy. The opportunity was to scale hundreds, and indeed thousands, of jobs across the country as part of the transition.

Respectfully, the First Minister claims a lot and is pursuing what I regard as a core vote strategy with independence supporters.

If you would let me answer the question. You are perfectly entitled to ask questions; I am perfectly entitled to answer them. We made our choice as Scots in 2014. I know that was a matter of disappointment for some on the Committee, but we made a clear and categoric choice by 10 percentage points, by 55% to 45%. At the time there was a great deal of coverage as to this being a once in a lifetime or once in a generation choice by those arguing for independence, but Scotland made our choice and we made our choice very clearly and categorically in 2014—

As I say, the constitutional apparatus that was in place in 2014 remains in place, so in that sense we have been very clear as to the basis on which Scotland made its choice. On what John Swinney is claiming will happen after May, respectfully I would rather play the game than engage in the post-match analysis before a ball has been kicked. In that sense when you say it is rhetoric, the reality is the First Minister is very understandably pursuing votes ahead of the May election. He is perfectly entitled to deploy what strategy he chooses to try to secure those votes. I would simply observe that if after 20 years you are not willing to run on your record, it rather suggests the record is not very good.

As I say, it is my political judgment that this is a smokescreen. When you say that the Scottish Government are happy to run on their comparative record, if, respectfully, you or indeed the Scottish Government think this is as good as it gets, I welcome the chance for the court of Scottish public opinion to reach its judgment on one in six of us still being on waiting lists, on a chronic inability to build—

The mandate on which we were elected as a UK Government was very clear that we are not countenancing the break-up of the United Kingdom or a further referendum. Secondly, one of the differences between now and 2014 is that 2014 actually happened. We had our choice, we made our choice. I know that is a matter of disappointment to some who argue in favour of independence, but the reality was that by fair, open and democratic means a judgment was reached by the Scottish people that our best future was to stay within the United Kingdom.

First, I am not anticipating a defeat for the party of which I am a member and we are working for a victory. Secondly, I will be at St Giles on Sunday. I was first in St Giles the Sunday after the referendum when there was a national service of reconciliation, a service of national reconciliation that very regrettably both Nicola Sturgeon and Alex Salmond refused to attend. I worry that when you say circumstances have changed you reflect a long-standing position in your party, which is not actually to accept the result of 2014 as being a conclusive, determinative judgment by the Scottish people. The argument that you are now seeking to state, which is everything has changed, is an argument that we have heard at various points in 2014. We heard it on Brexit, we heard it on Boris Johnson; we have heard it on a whole range of issues. Your party is perfectly entitled to argue for independence and I am sure you will continue to do so. That is not my party’s position. My party’s position is that we should be focusing on the delivery of a £10 billion order to the Clyde. We should be focused on a record devolution settlement. Respectfully, we disagree on the best constitutional future for Scotland. I believe in a two Parliament, two Government solution. I am a committed devolutionist. I accept that John Swinney takes a different point of view but it is for him to defend or explain his politics and I will defend and explain mine.

I find the othering implicit in your question not only inaccurate but offensive, because one of the points that was established in 2014 is that the flag does not belong to one political party. Patriotism does not belong to one political party. I would argue the reason that my side of the referendum argument prevailed was because in an argument in Scotland about Scotland’s future, led by Scots, a majority of us decided our best future was to stay within the United Kingdom. You are perfectly entitled and your party are perfectly entitled between now and the elections in May to make your case. As I say, if that is not the case about the state of the health service or the state of education or the state of criminal justice, or indeed the state of our ferries, that is a judgment for you, but others will reach a different judgment as to why you are making the case you are making.

Look at the salience of independence relative to, for example, the state of the health service that your party has left after 20 years in power.

If you look at the polling ranking, it is significantly lower than issues around cost of living, criminal justice and a range of other issues. We can have an argument about the psephology but equally it is clear that when that question was put to the Scottish people there was a clear and overwhelming majority for staying as part of the United Kingdom. As I say, I reflected on this when realising I was heading to St Giles on Sunday. It is a matter of regret to me that politicians of significant standing, like Alex Salmond and Nicola Sturgeon, chose in the years after that decisive choice not to bring us together as Scots but instead to deploy their political skills to keep us divided. I personally think after 20 years of arguing about independence Scotland has very little to show for it and that is why I think we need a new direction next May.

We have been engaging with the Scottish Government and other devolved governments on a draft MOU since July this year. The devolved governments are presently considering this draft and engagement has been positive. The intention is to have something agreed and published soon. I am afraid that is very careful Whitehall language for we cannot put a definitive date on it, partly because we are talking to colleagues in other Governments, but I can assure you that when I was doing the last job on intergovernmental relations in the Cabinet Office I was very clear that was an undertaking in the manifesto and we had to drive that forward. That is why the draft MOU has been with the devolved governments since July.

Obviously we are very mindful of the imminent elections in the spring. I can assure you that is part of my thinking and I will make sure that is in the consciousness of the Cabinet Office as well.

You are absolutely right to recognise that on occasion the nature of the demands of the legislative scrutiny and parliamentary timetables means that short notice consideration is sometimes unavoidable. I feel that we have had a pretty effective record on LCMs to date of securing those consents, and that stands in a great deal of contrast to our predecessors. I am looking for exactly the number of Bills that we have had. I think it is 12.

Notwithstanding the fact that we are proud of that record, it is worth recognising there are occasions where, at the request of different Governments, last minute changes are required. For example, on the Bus Services Act the Scottish Government made a late-stage request to extend non-zero emission bus provisions to also cover local bus services in Scotland. In that sense you seek to accommodate that as part of the process, but optimally you work in a timetable that means everyone has more time.

First, thank you for the question. Let me deal with the question in two ways. First, on the process of engagement, I spoke to colleagues in my own party in a highlands and islands conference at the weekend and was able to share with them some of the information on what contact the UK Government had. Given the sensitivity of the issues and the concerns that you have described, it is very important to get on the record the manner of the engagement that has happened prior to the announcement. With the forbearance of the Chair, on 15 September there was an initial in-confidence call with the Scottish Government’s officials about potential plans to consider Cameron barracks as alternative asylum accommodation. On 26 September, a letter came into the Home Office from the Scottish Cabinet Minister, Shirley-Anne Somerville, covering a number of topics, including reference to the potential use of Cameron barracks. On 9 October, video meetings were held with senior representatives from Police Scotland—the highlands division—NHS Scotland, COSLA and the Scottish Government. On 10 October, a Teams meeting was held with the chief executive of Highland council. On 17 October, Teams meetings were held with senior representatives of the Scottish Fire and Rescue Service. On 27 October, the first operational working group meeting was held with representatives of the above organisations, minus Scottish Government colleagues who have now been added. On 27 October—which was the day that I think you have described—Cameron barracks, along with Crowborough in East Sussex, was named in the media and, therefore, confirmed publicly by the Home Office as being accurate. In that sense, I recognise that the legal obligation that we have as a UK Government to provide appropriate accommodation to asylum seekers is one that is a matter of significant public sensitivity, but I do not think it is fair to suggest that there has not been engagement by the Home Office colleagues who lead on this matter for the UK Government with a range of local organisations including the Scottish Government. This has been reported to me. When I heard that Shirley-Anne Somerville had claimed she had heard about it while on the radio I was perplexed, given that she had already written a letter to the Home Office on 26 September about Cameron barracks. I think this is an issue where good faith is absolutely critical. I am not for a second questioning your good faith but I think we have a responsibility to act in a careful, deliberative and responsible way. Much of the work that is under way at the moment engaging between the Home Office and each of those local organisations is attempting and designed to address exactly the concerns that you have described. We were in a situation—to come to the policy—where more than 400 asylum hotels were opened across the UK under our predecessors because essentially the processing of asylum applications simply ceased, and as a consequence the numbers bloomed. We have done two things to try to address that. First we have made a judgment that we need to increase the number of people working on processing and the rate of processing, essentially to reduce the backlog. At the same time we have said hotel accommodation is not the appropriate accommodation and we will look at former military premises, and in that case we have looked in East Sussex and to Cameron barracks. Some incendiary language has been used on asylum seekers in the highlands. My understanding is that prior to the announcement of Cameron barracks there have not been asylum seekers in the highlands in significant numbers in a way that there are in Glasgow, for example. Also, there is a very proud history of Inverness hosting former interpreters and others who were supportive of UK armed forces in Afghanistan, who were housed there temporarily previously. In that sense I recognise that this is a process, not an event. I am grateful for those organisations now working with the Home Office, but I think it is important, given the sensitivity of the politics, not to be in a position where people are alleging there was no contact when in fact very clearly there was a range of contact with a range of organisations.

There are now fewer hotels than there were. The peak under our predecessors was about 400 asylum hotels and that is now down to about 200. We have returned about 35,000 people with no right to be in the United Kingdom, but essentially the processing under our predecessors simply collapsed. In that sense of course we need to work our way through the backlog, but that has involved additional resource being committed to that task. Recognition of the individuals themselves and their right for the applications to be processed, and also public concerns, is an issue that is getting a huge focus from Shabana Mahmood.

Yes.

I do not have the exact number of hotels in Scotland, but as I say, the bulk of the asylum seekers presently in Scotland are housed in Glasgow in a range of accommodation.

Sure.

We certainly with earnest endeavour sought to do so and, you are right, I led the Internal Market Act review. Let us start with the policy and then come to the process. How do you balance—as someone deeply committed to devolution—the policy space for decision making under a devolved framework of power, with the reality that we have deeply integrated supply chains in the United Kingdom? While we are as a country looking to raise the trend rate of growth we want to avoid unnecessary barriers that potentially significantly disadvantage Scotland. If you look at the proportion of our business that is cross-border and involves exports of goods and services to the rest of the United Kingdom, it is one of the many reasons why I oppose independence. Putting up new barriers between the largest market that we operate within, which is the UK internal market, does not seem to me to be in our interests or to our advantage. The question is: how do you find the appropriate balance between policy space and unnecessary barriers? The legislation was introduced after the decision to leave the European Union, and the need to establish a framework that protected and supported the internal market within the United Kingdom, and avoided a situation whereby Brexit led to a further series of unnecessary trade barriers going up. If I look at the way that our predecessors implemented the Act, I was concerned that recourse to the courts risked being a first resort rather than a last resort. The Bill contained what I saw as a very sensible way forward, which is the common frameworks process. Essentially one of the main elements of the Internal Market Act review that I undertook was to say let us foreground the common frameworks approach, which means that on a collaborative, horizontal basis with devolved Governments the UK Government can find collaborative, sensible and constructive ways forward. That had, to an extent, fallen into abeyance in the face of a somewhat performative series of disputes. One of the curious features of Scottish politics over the last 20 years has been the symbiotic relationship between the Scottish Tories and the Scottish nationalists, both seeking to wave flags at each other, a Union Jack or a saltire. I am much more interested in getting to positive outcomes for Scottish businesses, industry and for a range of other stakeholders. In that sense, foregrounding of the common frameworks was the first approach. Secondly, we listened carefully to the Welsh Government, the Scottish Government and others who argued that environmental and health impacts could be considered in exclusions. That was a substantive change, in addition to the foregrounding of the common frameworks. Do I broadly believe that we reached the right balance? I do. I draw a lot of comfort from the responses of Scottish business who have been pretty clear that they want to avoid unnecessary barriers going up.

It is inherent in the nature of parliamentary democracy that even if you legislate you are vulnerable to subsequent Parliaments legislating in a different way, so I am not sure that provides a greater degree of assurance. Secondly, I think there was an urgency for Scottish businesses. I was very mindful of Scotland’s interest in this as a relatively smaller market compared to the rest of the UK. There are many English-based businesses for which Scotland is not a key market. There are a lot of Scottish businesses for which the rest of the UK is a key market. There was an urgency to getting this right and actually we ran a more comprehensive, faster review than was anticipated by statute. Respectfully to the Scottish Government, they wanted the Act abolished and I sensed during the process that very little other than the abolition of the Act would have satisfied the position that the Scottish Government adopted. They are entitled to that point of view but we respectfully took a different position. There are also interdependencies with Northern Ireland, which we were very sensitive to on upholding not only the Good Friday agreement but all the subsequent work that has been undertaken in Northern Ireland. In that sense we reached a view that to legislate and to open up the Act would raise a number of key issues in Northern Ireland that we wanted to leave undisturbed, and at the same time would miss the urgency of giving businesses the security and stability that they required to be able to undertake cross-border trade.

John is a good friend as well as a colleague and I will leave him to opine on China. On the conduct of the Scottish Government, in my capacity as Secretary of State for Scotland I was in Greenwich doing a defence roundtable a couple of weeks ago, and if you listen to Scottish business, they were deeply perplexed by the First Minister’s statement on the middle east and Gaza. They said, six or seven weeks on at that point, they were simply unable to get civil servants to give them information on what that announcement meant and that was imperilling their ability to secure investment from global companies—the capital investments that we are looking for in Scotland. There are some powerful lessons that need to be learned from that episode. Secondly, there is the example of the welding facility on the Clyde where, notwithstanding the Scottish Government claiming to have changed their policy, we were in a position where we were vulnerable to seeing opportunities for young Scots being missed, despite the UK Government having helped secure 15 years’ work with BAE Systems—2,000 jobs guaranteed for 15 years. These are highly paid, unionised jobs, secured in part because of the strength of the relationship between Norway and the United Kingdom. You mentioned John Healey; he was doing a press conference in Norway at 8.30 this morning.

I am coming to your point. On the welding centre, we stepped in because the Scottish Government were not willing to recognise that in the very dangerous Euro-Atlantic security environment and the global situations that we find ourselves in, the responsible course is to support our industries to be able to defend ourselves. Whether it is about the statement that the First Minister made in September, that specific instance, or the continued opposition to nuclear weapons—for Britian to unilaterally disarm I genuinely think would be welcomed by Vladimir Putin—I find myself as usual in agreement with the Defence Secretary.

There is a lot of work under way at the moment on the common frameworks that I was describing. We were in a position prior to the review where there had not been the level of engagement by the Scottish Government in particular. My sense was they were waiting to see what had emerged. I checked via my officials earlier this morning at the Cabinet Office and there is work under way on taking forward the common framework. My intention was to make sure that the Governments could work collaboratively on the common frameworks, business would be undisturbed and able to get on with their jobs, and we would avoid a long delay in legislation. Respectfully, on your previous question, had we chosen a legislative group to either abolish or amend the Act we would have been in a longer timetable than we are in the common framework.

As I say, we were in a position where the Scottish Government were not co-operating on the common frameworks programme. The UK is not the only actor on this stage. In that sense we require and genuinely hope to have the engagement of the Welsh Government, the Northern Irish Executive, and indeed the Scottish Government in being able to accelerate and take forward the programme, but there is agency in others as well as the UK Government in that regard.

The decisions on the design and structure of the fund took place prior to my appointment as Secretary of State. My understanding was that there was contact with officials at that time but that preceded my arrival in the Department. On the established formula that was used, there is a commonality in the approach on agriculture and fisheries. Kirsty, you might want to say something, given there was some interest and concern in the approach that was taken on agriculture. I will make a couple of other observations. First, it is open under devolution for the Scottish Government to choose to allocate what resources they choose to Scottish fishing communities; £5.2 billion was the additional contribution made by the UK Government in the last settlement, the largest contribution ever made in 25 years of devolution. Secondly, very dispiritingly—indeed, I felt deep anger on behalf of my constituents—it emerged last week that there was a £1 billion underspend by the Scottish Government. It is important to recognise that this is a responsibility where the Scottish Government themselves were asking for this fund to be discrete to Scotland. Kirsty, do you want to explain about agriculture?

Excuse me, I am not blaming Scotland.

The request was made by the Scottish Government to have a discrete Scottish fund and there is an established formula that once those funds are established, funds are allocated.

I have huge respect and admiration for Torcuil. He is a good friend as well as a very esteemed colleague. Torcuil is perfectly entitled to make the case he chooses on behalf of the Western Isles. He brooks no quarter in advancing what he judges is the right approach. It will not be the first time that Torcuil has said something that I am then challenged on and am not entirely able to agree with, but be assured we are good mates, I have a lot of time for him, and he is doing an effective job representing the Western Isles.

It is allocated under the Barnett formula, which is the established formula for how devolved areas of expenditure are allocated. As Kirsty says, it reflects the general approach that is taken across the UK.

I think there is a risk you are adding two and two together and getting about 27 and not four. Respectfully, what would have been churlish would have been—given the very explicit request of the Scottish Government that there should be a devolved fund in Scotland and that they should operate that fund—if that had been rejected. In that sense I will allow the Committee to reach its judgment about the substance of our answers, but you can be assured that the fund was reflective of a request that was made directly to the UK Government by the Scottish Government.

The character of the visit is determinative of the funding. The key difference in the visit that took place to Scotland in the summer is that in previous visits it followed a formal UK Government request and invitation to the visiting President of the United States that triggered the established funding principles. The most recent visit undertaken by the President was not at the formal invitation of the UK Government, albeit we were very happy to welcome him to the beauty of Ayrshire and Aberdeenshire. In that sense there was a precedent reflecting the character of the fact it was a private visit rather than a visit where a formal invitation was extended by the UK Government.

To echo the points that Kirsty made earlier, not only are they responsible for policing in Scotland but they are in a position where the UK Government have provided very significant additional resources—£5.2 billion in the latest settlement—and it emerged last week that they have underspent their budget by £1 billion. I think we are perfectly entitled to ask where that money has gone, and we should at least have that in mind when they repeatedly ask the UK Government for extra resources. I think the important question that many people in Scotland will be asking is, frankly, “Where has the money gone, John?” Is the money being spent effectively? Why are we not in a position where the Government are spending the money that it is given in circumstances where I think most of us in our constituencies would agree there is an aching need for additional resources in our health service, schools, social care system and a whole range of other public services, including the police?

I have many responsibilities as the Secretary of State for Scotland but speaking on behalf of the White House is not one of them. They are entitled to their own characterisation of the President’s visit and it is perfectly reasonable that they do so. As I say, the basis on which the response was offered by the UK Government was that, unusually for a visit from the President—although he was very welcome—it was not on the basis of a formal invitation extended by the UK Government.

Well, the conversations continue. We are in an enviable position as a UK Government in having secured the first trade deal of any country in the world with the United States. Secondly, it is right to recognise that the former human rights lawyer, the Prime Minister of the country, Kier Starmer, has formed a somewhat improbable but deep and strong relationship with the President of the United States, and that stands us in good stead. I think many of us observed that initial meeting in the White House between Prime Minister Starmer and President Trump and felt a sense of relief that we had grown-ups who were engaging directly with the US Government. On the basis of that strong relationship we went to work. I have some experience of this, having been the trade policy Minister in the DBT up until my appointment as Secretary of State for Scotland. The timeline after that initial meeting was to raise our interests directly with the United States, including whisky critically. I will come back to that point in due course. We were seeking to see whether before what was called world tariff day we could get a phase 1 deal across the line. We did not manage that ahead of world tariff day but then we went straight back to work with negotiators on the ground frequently—direct contact from Jonathan Reynolds, the Secretary of State for Business and Trade, and direct engagement with No. 10—and we secured that deal in May. That was a phase 1 deal, anticipating further conversations on phase 2. Conversations are live and continuing on phase 2. I said only on Friday when I had a very useful meeting—I was scheduled to have a half-hour meeting with the American ambassador and it ended up stretching to an hour, where we talked about whisky and about the continuing negotiations—that we will have negotiators on the ground in Washington within the next two weeks, and possibly back here in London. We are working very hard to get this deal over the line for Scotch whisky, given the 10% tariff that has been imposed, but I think it is important to challenge some of the misinformation that has been put out there. In response to the comments that I made on Friday morning and the meeting that I had in Queen Elizabeth House with the US ambassador, the First Minister said, “Whisky was not featuring on any of the demands of the UK Government when I started the job back in April.” I can assure this Committee categorically that is not true. I think Scotland is ill served by misinformation on how the UK Government are engaging. First of all, we were having those conversations and you can ask Mark Kent of the Scotch Whisky Association, with whom I was in dialogue as the trade policy Minister and with whom No. 10 were directly engaged, and others, to confirm that we were very mindful of whisky, at an early stage before the state visit, after the state visit and during the state visit. Secondly, it somewhat stretches credulity for the First Minister to assert that whisky was not featuring in any of the demands of the UK when within a couple of months of April—or indeed three months because it was in July—we did a landmark deal with India where Scotch whisky is among the biggest beneficiaries. I can absolutely assure your constituents in West Dunbartonshire that whisky has been high on our agenda, continuously on our agenda, and respectfully the mandate and the legal authority for negotiating trade deals rests with the UK Government. The First Minister is perfectly entitled to promote Scottish exports and I actively welcome his engagement in that endeavour, but Donald Trump does not give gifts; he does deals. The counterparty for those deals being done is the UK Government. While the First Minister had his picture taken with President Trump, he went on to say on Friday that he had offered the President a zero for zero deal in the Oval Office. That may well be the case but it did not deliver the result. What will deliver the result I believe and hope in the coming weeks or months—and I can assure you that effort continues—will be the quiet, diligent, detailed work that allows us to say in what is a broader series of equities and negotiations, “How can we get whisky over the line?” I can assure you that work is being done by the British Government and it ill serves the office of First Minister to suggest that somehow it did not feature in any of the demands of the UK when I stand before this Committee and can confirm that it categorically was and continues to be so.

Immense, and again you do not need to take my word for it. Ask the Scotch Whisky Association and it will confirm that given it is the largest whisky market by volume, there are huge opportunities. Probably the single statistic that I can give you that is most illustrative of this is when I was travelling with the Prime Minister in India and we were meeting Prime Minister Modi and others, it emerged that—given it is the largest whisky market by volume—presently Scotch whisky accounts for precisely 3% of that market. Imagine the growth potential for Scotch whisky in a market of that size, incidentally in a country that will be one of the three giants of the 21st century, not simply in population but in economic scale. India is a nascent economic superpower in the making with a burgeoning and growing middle class. There are huge opportunities for Scotch whisky in that market and they are opportunities we are determined to seize.

Given that I was in the Department for Business and Trade as a Minister when we published the industrial strategy, unsurprisingly my answer is yes. It is inherent in the IS-8 that there will always be industries or particular companies that say, “Do we have the prominence that we deserve?” I hope in the answer I was able to give to Douglas, you will feel assured on the basis of the evidence that the significance and importance of the Scotch Whisky Association has been uppermost in our mind since coming to office in July 2024. I pay generous tribute to Jonathan Reynolds as the Secretary of State at the time for his tireless work for Scotch whisky in the India deal. I am due to meet Mark from the Scotch Whisky Association next week—he was with us on the trip to India with the Prime Minister. This is not only a world-class industry but a world-class group of advocates for the industry and they will never miss the opportunity to say, “Are we getting our fair share of Government time, resource or more in the future?” In that sense, we can genuinely allay the concerns, but it tells you more about the effectiveness of their advocacy than the comprehensiveness of our strategy.

I am always open to how we can ensure that Scotland’s voice is heard effectively. I recollect phoning one of those stakeholders from my constituency in East Lothian on a Friday evening and listening to the claim that somehow Scotland’s voice was not being heard on the industrial strategy unless a particular organisation or sector was represented. There did seem to be a certain irony that she was having that conversation with a Scottish Minister, in their constituency in Scotland, saying, “Is Scotland being listened to loudly enough on the industrial strategy?” The structure of the advisory committee is not a delegate body. It is not that we want delegates who speak for a single issue or single nation—it is an advisory body to Ministers. Given my own presence in the Department for Business and Trade, you can rest assured that Scotland was uppermost in my mind during the conception of the industrial strategy. Blair McDougall—who is a Minister who has now come into the Department for Business and Trade and who was in Glasgow on Monday for International Trade Week—has a deep understanding of Scotland, not just its politics and economics. I have a very high degree of confidence in his ability within the Department to ensure that Scotland’s voice is being heard. I should have reflected this in my earlier remarks. As well as seeing myself as being Scotland’s voice around the Cabinet table, there is the work that Kirsty is doing and the work that Zubir Ahmed is doing in the Department of Health, where there are lots of lessons the Scottish Government could be learning about getting new technology into place, if you look at the NHS in other areas. If you look at the work that Blair McDougall is doing now on the industrial strategy in the Department for Business and Trade, or at what Martin McCluskey and Michael Shanks are doing on the clean energy mission, there is a wide level of representation of Scottish constituency MPs now serving in this Government. That provides an additional network of influence and opportunity for Scotland that I am keen to harness while in office.

Thank you for that observation. I was in two different pubs in my constituency last Friday, but that might be misinterpreted. I visited the Longniddry Inn to hear directly about some of the concerns that you described, and then subsequently The Law hotel, North Berwick where, thankfully, we have seen a significant inward investment to the town in recent months. I am very alive to the exact issues you have described, partly because of the East Lothian coastal strip, which is very strong in hospitality and tourism. I am grateful to you for raising them.

The other point I will add is that it is critical for rural Scotland, but also the contribution that tourism has made to Glasgow and, critically, Edinburgh has been transformative. Tourism and hospitality is central not just to our thinking about rural Scotland and some of the fragile economies and challenges that are distinctive to the rural economy, but central to our thinking on city regions. The year-round festival tourism model that has been established in Edinburgh has been a critical element of Edinburgh’s success in recent years.

The deals are in flight at the moment, so I will defer to Kirsty on some of the work that she has been doing over the last year on this.

Chair, with your permission given Kirsteen mentioned the Edinburgh and South East Scotland city region deal, I should probably keep myself safe. I was a member of the court of the University of Edinburgh in the years immediately preceding my election. As Edinburgh was also a beneficiary of that deal, I should put that on the record.

The focus of the Department in the last few weeks since I have arrived—and Kirsty has been doing great work on this—is, first, get Pride in Place up and running because that is a significant additional contribution from the UK Government to make sure the place-based support is available and, secondly, continue with other Government Departments to work to support the city deals that are in flight at the moment and obviously, as this Committee has reflected, make sure that we have effective evaluation of the impact of those city deals. There is a dynamic and correlation between having effective assessment of the impact and judgments of the future.

It is right to recognise the Ayrshire deal is behind its planned spending schedule. That is why Kirsty has taken a direct interest in it and will talk to the Scottish Government to see what we can do.

Yes, let me try and then I would be quite keen to bring Fiona in given she has joined us from DESNZ and is across a lot of these issues, to our great benefit. First, Michael may hide behind pillars when he sees you, but he is also incredibly complimentary about your pullovers, as I remember. Given the serious subjects of your first question, I did not wish to echo my ministerial colleague, but you are looking very fine and warm today. Secondly, you quote the history of the establishment of the sovereign wealth fund by Norway. It is worth remembering that the late great John Smith as Energy Minister established the British National Oil Corporation. I see Margaret Thatcher’s approach to taxation in the North sea as a warning rather than as a model to be replicated. It is a matter of great regret that we did not see more effective use of those resources during those years. On a couple of contextual points, you mentioned the challenges of the EFI colleges locally providing the right skills. Even in the first few weeks in office, I am hearing this right across Scotland, that we do not have an effective pipeline of the skills that are required for the jobs, not just of today but also of tomorrow. It is a matter of deep regret to me that the Scottish Government have cut the EFI college budget by 20% in circumstances where there is an underspend of £1 billion and they have had a record settlement of £5.2 billion additional resources. There is a heavy responsibility on the Scottish Government to make sure that we are equipping Scotland’s young people with the skills and aptitudes that they need to be able to harness onshore value for renewables. Secondly, on the offshore deployment, I recommend to you the article that my former parliamentary colleague, Brian Wilson, wrote in The Scotsman a couple of weeks ago, which was a truly devastating critique of the Scotland options and the loss of value to the Scottish taxpayer and the Scottish Exchequer of a badly designed option process that has lost hundreds of millions of pounds of potential value according to the evidence that he adduced in the piece. In that sense, there are really powerful lessons that need to be learned. Thirdly, one of the other aspects of the Scotland process was for all of the windy rhetoric about the Saudi Arabia of oil, there was not a clear enough appreciation of your exact point of how do we generate onshore value rather than simply watch the resources—not just of Scotland but the whole of the United Kingdom—avoiding or not securing those potential opportunities. On your point on community benefits, one of my other former colleagues from the same era as Brian Wilson, Calum MacDonald, has of course set up a wind farm on Lewis. He makes a very powerful case whenever he sees me—I hide behind pillars whenever I see Calum coming towards me, because his argument is, as well as the limited voluntary community benefits that are being secured just now, ownership can be a really powerful and value generative benefit for communities. In that sense, DESNZ has a consultation under way at the moment on the voluntary scheme. I will ask Fiona to give you some clarity of how that process aligns with the legislation that we are looking at.

You are absolutely right: it is a shocking indictment of the last 20 years in Scotland that one in six of our young people find themselves in that position. We are certainly not aligned in our thinking relating to EFI colleges because we fundamentally think that Scotland deserves better than a 20% cut in EFI colleges in the context of one in six of our young people not having positive destinations. It is worth recognising that there is a divergence there. On how our Governments can work together effectively, of course we want to play our part in addressing those issues. Kirsty can talk to the skills and training work that is led by the Scottish Government and about how we are thinking about that in relation to the UK Government.

I will say yes to that. I was in the Cabinet yesterday and, without breaching Cabinet confidentiality, Pat—who is a very good friend and former colleague of mine in Edinburgh University Labour Club and knows Scotland back to front—was talking about the challenge that we face in youth unemployment and there are parallel challenges. One is the number of young people who are out of work and are on unemployment benefits. There is also a significant challenge in young people who are on sickness benefits. Those benefits are often sticky and once someone gets on to benefits at a relatively young age, it is a bigger challenge as the years pass for them to come off that benefit and get back into the workforce. On the work that we are doing at a UK-wide level and how we reform Jobcentre Plus, of course there is relevance to Scotland. We stand ready, as Scotland Office Ministers, to work, engage and partner with others to make sure that we are learning the right lessons from pilots that have been developed down here and also applying those lessons, where appropriate, as the UK Government in Scotland.

I should probably declare that I am a very good friend of Torsten Bell, the former director of the Resolution Foundation who is now doing important work for us in the Treasury and the Department for Work and Pensions that we have just been discussing. It is right to recognise that the Resolution Foundation has done important work, not just on youth unemployment but on poverty and inequality over a number of years. We are committed to abolishing or removing the age bands for adults and to creating a single adult minimum wage rate. We recognise that the 18-to-20 band brings particular challenges for what are often starter jobs for people at that age. Angus mentioned hospitality and tourism. One of the great strengths of hospitality and tourism is often, along with retail, they are the sectors of economy where most people get their first job. We need to be sensitive to that and consider all of that carefully. In the remit that was published in August this year, we asked the Low Pay Commission, as a Government, to take into account the effects of employment on younger workers, incentives for them to remain in training or education in the wider economy. It is with the Low Pay Commission at the moment.

Let me offer the assurance that we are in touch with DWP. I was part of the Cabinet conversation with Pat yesterday on a range of related issues. I would also want to pay tribute to the work that you have done in bringing this issue of young people being denied those opportunities in Ayrshire to my attention. I do not want to suggest, Chair, that I am stalking your Committee members online, but I was very struck by the video that you recorded a couple of weeks ago outside Ayrshire College, and the fact that 46,000 people had viewed it within a few days of it going up on your Facebook page. That speaks to me to the fact that there is huge public concern about the cuts that we are witnessing in colleges in Scotland at the moment. This is respectfully in the context of a £1 billion underspend by the Scottish Government and £5.2 billion of extra money that has been committed by the UK Government to the Scottish Government. That figure of 831 young people not getting into Ayrshire College is a haunting figure that should challenge the Scottish Government, who have responsibility for the funding of Ayrshire College. If you cross the country to Rosyth, you saw the public coverage a couple of weeks ago about the fact that Babcock International, when establishing its programme for the two carriers, had to employ hundreds of foreign workers. I have great respect for their skills, but we have to ask why are we as a country in a position where our own young people are not being equipped by the EFI sector with the skills that are needed? If that was the experience with the building of two carriers in Rosyth, the Scottish Government have a responsibility—although it seems to have evaded that responsibility for the welding centre—to make sure we do not literally and figuratively once again miss the boat with the frigate orders at BAE Systems in the Clyde. The truth is that with 15 years guaranteed work and 2,000 highly skilled unionised jobs there, we are in a position where there will be a demand for exactly the kind of skills that a college like Ayrshire College should be providing at the moment. I applaud the tireless work that you are doing to put this on the agenda to the UK Government. I hope that it is also on the agenda of the Scottish Government, because seeing 20% cuts in the budget for EFI colleges against an underspend and a record devolutionary settlement makes me think that Scotland could do better.

For the 831 young people not getting jobs in Ayrshire College, respectfully, it is pretty doom and gloom right now. If your attitude is that that is the best we can do in Scotland, and we should be somehow applauding the conduct of the Scottish Government, respectfully I take a very different view. I think the Scottish Government could do better. If you are saying, “Should the situation be improved in England?” I take great comfort from the fact that we have a UK Government committed to exactly that endeavour. I only wish that we had a Scottish Government equally committed to that endeavour. Frankly, if the Scottish Government have not managed to sort EFI funding and training places after 20 years, I respectfully question whether they either have the interest or the capability to fix it, which is why, personally, I think we deserve a new direction.

I will try to keep it to our responsibility but also to recognise the severity and seriousness of what you describe. Again, without breaching Cabinet confidentiality, we were discussing yesterday the youth strategy, which is predominantly focused on England given a lot of the areas of youth policy are devolved in Scotland. Lisa Nandy’s work painted a very bleak picture of the challenges that our youngest generation are facing today as a consequence of covid, a sense of social isolation and a whole series of challenges that have been exacerbated and deepened by austerity. For example, if you look at the presence of youth workers or youth clubs compared with when I was young, they have simply vanished in many communities across the whole of the UK. It was in that context that Pat was talking about the importance of our offer to work for young people who are being failed by a system, are passported straight on to benefits—often in the context of mental health challenges—and then get stuck in the system. The point that he was making, which I think is a powerful and important one, was not only, as is often covered in the newspapers, that there is a cost to the Exchequer there but at least as significantly, if not way more significantly, that is not good for the young people themselves. Collectively, we need to do better. That means that it is right and reasonable for us to challenge the Scottish Government to say: why are we seeing a 20% cut in EFI colleges? It is also important that we ask how we make sure Jobcentre Plus and jobcentres across our communities are a resource that assists and bridges young people coming into the workplace. Again, I spoke at the beginning of the Committee about my longevity. I was part of a Government that implemented the new deal for the young unemployed and we basically, at that point, said there should be four options but no fifth option—you cannot lie in bed not accepting choices—and there was overwhelming public support for that. Any of us as parents, grandparents, aunts or uncles think what would we want for our own family member? We would not want them stuck with no real access to mental health services—consistently across Scotland the waiting times and waiting lists for CAMHS in particular are deeply troubling to the families, and we all have constituents like that at the moment—and without access to the kind of support that will actually support and assist those kids. I think you should think not just about parity of esteem on mental health, but access to services. We would not say to a stage 1 cancer patient, “Come back to us when you are stage 4.” In that sense, we have to do better for mental health. At the same time, that means there is a responsibility on the UK Government and DWP, but there is critically a responsibility on the Scottish Government when one in six of us are on a waiting list. We do not have adequate provision for mental health and we are also seeing a 20% cut in the EFI college budget.

As I recollect, I wrote to the Committee on 23 September and since you took evidence on this subject earlier in the year, phase 2 of the spending review has come into force. This includes an additional £2.9 billion per year on average through the operation of the Barnett formula that I have already referenced earlier in the Committee hearing. The financial certainty and stability that we are providing as the UK Government stands in contrast, we would argue, to the position that the Scottish Government have taken on the Barnett formula, which is actually seeking its abolition. The Treasury continues to work with the Scottish Government to deliver the Smith Commission recommendations, including the specific issue of VAT assignment, and there is not much I can add today to the letter that I sent on 23 September.

I would be very happy to write to you.

I can assure you that I am both alive to and grateful for the work of this Committee. I am conscious of the report and, as you can imagine, ahead of this Committee had the opportunity to make myself familiar with the terms and recommendations of the report. I can give you the undertaking that I will make sure that the work of the Committee is fully circulated within Government.

I am in a position where I answer the questions that you put to me.

I had a fair sense that I would be asked about things like EFI college funding, given the situation that we are in at the moment. I had a fair idea that we would probably talk about independence, because that tends to be what the SNP talks about a lot, but I am very happy to answer any questions that any Committee members put to me.

You will appreciate that for any Select Committee—and I have done a number of them over many years—I ask the Department to provide me with a detailed briefing across a whole range of issues. It will not come as a great surprise that my awareness of the Committee’s reports was quite high up my list of what I was going to make sure I had read. As I said, I read the Committee’s report on the North sea transition on the way to Aberdeen, and I have spent some time since then making sure that I am fully aware of your recommendations.