Rhaiddo, penovell ddegwyd, y ddweud â'i ddweud y 27 mheithio a'r honnw yn 2014 yma o ran unig iawn i fynd i GymruAC. Rydw i ddweud, rai'n gweithio rwyntlwyr sydd ddweud â'i ddweud am bandiewr ac i ddweudr o'r eisteddeol yn gaeliaeth Yn Llywydd, ac rydw i'n credu i'n credu'r mynd fywyd hynny, ac rydw i'n credu'r wath yn rhanweithio i'r eisteddau cymaintig yn ddechrau'r mynd arno, ac rydw i'n credu'n ceisio i'r o'r ffordd o'r sileonol, o'r mofial cofnodau a'r ystafell honno i'r pwylltu euchydigol. Rwy'n gael i'r ddweud o ddull i'r Gŵr Macalpan, feisio bod yn gwneud i'r ddweud ei ddweud o'r ddweud. Rydyn ni'n rhaid i'r broddyn ni i'n gael i'r 11 o'r ffordd o'r ddweud i gael i'r ddweud. Ymgyrchai'n ystafell yma ar y gwaith, mae'n fod yn ystafell yma ar y gwir. Gweld i'n ei fod i gweithio i fynd i ni, mae gennym i gyfnodd y llwyddiadau yn gweithio ar gyfer 2015-16. Ac rydym yn gweithio i gweithio i ddisgu cyfnodd i amddangos John Swinney, ysgrifennyddiaeth gallu gyffredinol, cyfnodd, diolch, ac yn gweithio i gweithio i gweithio. Dyna'r gweithio i gweithio i gyfnodd John Mason, ysgrifennyddiaeth y Llywodraeth, ac Mary McCallan, director of energy and climate change at the Scottish Government. Welcome to you all. Before we get into questions, Mr Swinney, do you want to say something by way of an opening statement? Thank you very much, convener, and I welcome the opportunity to discuss the 2015-16 draft budget with the committee this morning. Our approach is founded in the Government's economic strategy, with the objective of delivering opportunities for all of Scotland to flourish through increasing Scotland's economic growth performance. The finance, employment and sustainable growth portfolio will continue to encourage entrepreneurship, innovation and internationalisation, and to offer the most competitive business rates regime in the United Kingdom through the small business bonus scheme as part of the budget proposals. Scotland's businesses are key to the long-term success of the Scottish economy. We will continue to support our enterprise agencies who will provide targeted support to encourage growth and improvement. The committee's focus for 2015-16 budget scrutiny is focused, in one respect, on exports. The Scottish Government has set an ambitious goal of increasing exports by 50 per cent by 2017. In support of this target, the Government through Scottish Enterprise and SDI will launch two new international trade initiatives early in 2015, the High Growth Market Unit, which aims to accelerate international sales in China, India and the Middle East through enhanced support for companies with the potential and the desire to sell into these harder-to-enter or high-opportunity markets. Secondly, through the Scots exporter initiative, which will focus on encouraging and helping non-exporters to start exporting and helping early-stage and occasional exporters to grow overseas sales. This will be open to all companies. A range of products and services will be made available to help them to prepare for and achieve export sales. We also need to develop the skills base and increase the number of companies that are exporting and SDIs working effectively with companies to raise their ambition levels and to achieve their full potential in relation to export activities. Since 2011, over 6,400 Scottish companies have benefited from export events and services through initiatives such as the smart exporter. One of the other crucial areas of focus will be on connectivity. Air connectivity is important for Scotland's global competitiveness in order to secure economic recovery and sustainable economic growth, and our economic strategy highlights the opportunities and the importance of international air connectivity to support the effort. That is what we are taking forward in partnership between VisitScotland, Scottish Enterprise, Hans-Anne's Enterprise and Transport Scotland. Alongside the work on exports, the committee has also highlighted areas of interest in relation to the low-carbon economy and energy and fuel poverty. The Government has a comprehensive range of interventions in relation to the low-carbon economy, including investing £2.2 million over 2014-15 and 2016 in the offshore wind accelerator programme, supporting local renewable energy projects and the deployment of wave and tidal array projects through the renewable energy investment fund, and putting in place a local energy innovation challenge fund worth up to £20 million to test communities' capacities to stabilise and reduce energy costs by reducing dependence on centralised generation and capacity. We believe that a more comprehensive and fairer service for those who are vulnerable to fuel poverty can be provided with a properly planned and funded Government service working with delivery partners, which is our approach through the Home Energy Efficiency programmes for Scotland. Between 2009-10 and 2012-13, the Scottish Government invested £220 million on a range of fuel poverty and energy efficiency programmes. That is a brief summary, convener, of some of the priorities in the Government's budget, but I look forward to answering questions from the committee. Thank you, cabinet secretary, for that introduction. We've got about 90 minutes or so for this session and what I propose is trying to cover the three main topics. In turn, starting with energy and fuel poverty, then enterprise and exports and then finally tourism and trying to group the discussion, if we can, around those broad topics. I remind members, if they would, to keep their questions short and to the point as possible. Similarly, answers that are short and to the point would be helpful in getting through the subjects in the time available. Can I start off on the energy and fuel poverty part of your brief, cabinet secretary? That was an issue that we took some evidence on two weeks ago from Energy Action Scotland and WWF Scotland. The Scottish Government has a statutory target to eradicate fuel poverty, as far as reasonably practicable by November 2016. Is the Scottish Government still committed to that target? Yes, we are, convener. Have you made any assessment of what is the likely cost of that target being met? I think that that's a difficult number to estimate, convener, because it will involve a variety of different interventions, some of which will be supported by the Government's public expenditure programme, but some will also be supported by the commitments and the participation that energy companies make to that whole proposition. What I think is the case is that strong progress has been made, given the sustained investment that the Government has made and the sustained contribution that has been made by energy companies into the bargain. We put similar questions to Energy Action Scotland and WWF about whether they believed that the budget allocation for the coming year would be sufficient. Bearing in mind that this was the last full year before the date that the target would need to be met as to whether the budget allocation would be sufficient, they were quite clear that they did not feel the sums allocated by the Scottish Government would allow that target to be met. Why do you think that they are wrong? I think that it just depends on the way that you look at this whole issue. As I understand it, the type of sum of money that was being talked about by Energy Action Scotland and WWF was of the order of £200 million per annum, if my recollection is correct. I saw the number earlier on this morning, but it is escaping me just now. When you look at the variety of different interventions that are taken forward by the Government and what could be a reasonable expectation of what would also be contributed through some of the commitments that are required by the energy companies, I think that it is essential that both of those elements are taken together. I think that it would be reasonable to conclude that the combination of the Home Energy Efficiency programme for Scotland investment, the Warm Homes Fund and the Green Homes cashback would deliver investment well in excess of £200 million. For £1314 million, I think that a reasonable estimate of that would probably be about £260 million. I think that looking at all of those different sources of funds in the round, I think that they probably contribute the type of sums of money that organisations such as Energy Action Scotland and WWF were suggesting were of the order of what was required to deliver on that objective. Yes. When we asked Mr Kerr from Energy Action Scotland about this when he gave evidence, he was clear that that would not be the case. His concern was that the Scottish Government was relying on money coming in, for example, from the eco scheme. He said that a lot of the eco spend money was going on boiler replacement in houses connected to the gas grid, so not actually tackling fuel poverty in areas where it was most extreme. His concern therefore was that relying on that eco money as part of the sum that was required meant that we would not be coming close to addressing the target. Mr Kerr is an experienced commentator and advisor on those questions, and it is important to listen and to reflect on the points that he has advanced. What we are confident about is that we have put in place a much better dialogue than has ever been in existence before between the Scottish Government and relevant interested parties and the energy companies to make sure that we are operating in a seamless fashion, that we have a combined proposition that is aimed at tackling fuel poverty. That is why I kind of vest my answers on that combination of different areas of expenditure that are emerging, because we have put in such efforts to try to ensure that our dialogue with the energy companies is such that we are encouraging them to spend and to support interventions that directly address the necessity to tackle fuel poverty. Obviously, we will be happy to reflect further on the advice that Mr Kerr has offered to see if there is any way in which we can further strengthen the focus and effectiveness of that expenditure. I have all the members who want to go in. There is one more question that I want to ask on this. The fuel poverty target is a statutory target. What will happen if it is not met by November 2016? I dare say that there will be some significant parliamentary scrutiny around such an issue if that unfortunately happens. Legally, given that it is a legal target, what is the consequence? The legal consequence is that the Government will have to explain itself to Parliament. Just to continue on the fuel poverty scene and the energy action Scotland evidence that we heard, Norman Kerr stated that a full-cost analysis is necessary to determine whether the current budget to eradicate fuel poverty is fit for the purpose. Does the Scottish Government have any intention to carry out such a... Essentially, what we have done in the process of the budget is identify the resources that we consider are required to work in concert, as I have explained to the convener, with the streams of expenditure that are emerging from other sources, and to work in a collaborative way to ensure that those monies are used effectively together. I think that the question of... I think that a lot of time could be deployed trying to put together the type of comprehensive assessment that Mr Kerr is talking about when, in fact, we know from the available data the significant challenge that we face in eradicating fuel poverty. The importance of ensuring that we have clear alignment between the different streams of expenditure is, in my view, a vital priority in trying to advance the practical activity that is required to tackle the issue. There is no intention to carry out an analysis report on that? We certainly have no plans to prepare that type of analysis. What we are concentrating on is delivering the practical steps and interventions to tackle fuel poverty, where we are able to do so. A lot of work has been done around fuel and energy efficiency in the social rented sector, but the private rented sector is falling way behind. What is the Scottish Government going to do to further improve the efficiencies in the private sector? It would seem that we have reached a flat where there is nothing else being done and they are not improving on that. Should we have legislated in the recent housing act, for example? I would not accept the premise that we have flatlined on that point, because there are very significant levels of investment available to support householders in the private sector to tackle issues of energy and efficiency and fuel poverty. If I look back over the years in which we have wrestled with those questions, sometimes the feedback from energy companies, for example, has been of the difficulty in engaging householders in some of those questions. One of the points that I accepted a number of years ago by the Green Party was the importance of local, comprehensive local schemes. Area-based schemes have been taken forward to try to capture exactly the type of individuals and householders that Ms Wiggal talks about. In that respect, the area-based schemes that we have maintained, which has not been maintained south of the border, which we believe is an important tool in trying to undertake that activity. In the period since 2008, more than 600,000 homes in Scotland have received the energy efficiency measures according to the information that we have available to us. It is a pretty comprehensive start that has been made in assisting individuals, and that is of the ones that we are aware of. That is beyond what other individuals and householders will be taking forward under their own steam as part of their wider home improvement work. The private sector as a whole has been some improvement in energy efficiency, but where is the private rented sector? In particular, there seems to be an issue where landlords perhaps are not taking up the options that are out there to them. I have not seen specific data on that point, but I will certainly explore that point. If it is the case that there is a particular weakness in the private rented sector in taking those steps that would assist in addressing the difficulties that individuals who are experiencing fuel poverty are suffering, we can refine the focus of our intervention to try to address that once we have considered that point. If I have another question on district heating, which is another area where it would appear that perhaps we are not performing as well as we should be and that companies are not taking up this opportunity, because the target, I believe, is 40,000 homes by 2020 should be benefiting from district heating. We are currently at 10,000 homes, so WWF has said that it is important that it is complemented by real substantive efforts on a regulatory framework that could both protect the consumer through the provision of district heating and incentivise and create a market. So, what more can the Scottish Government be doing to help this market to increase because we just do not seem to be moving forward enough on that? There are a couple of things that are relevant in the budget. The low-carbon economy budget has increased by 17.3 per cent from £6.4 million to £7.5 million, and there are two particular initiatives in there that we think will assist in this area of activity. One is the commitment of an additional £4 million for the district heating and loan scheme, which will exist over the period 2014 to 2016. Obviously, we do not have budget information beyond 2016, but it is recognised in the point that something that Dougal makes about the importance of tackling this issue up to 2020, there is a necessity to ensure that there is a sustainable budget line to address this over those years. In the current financial year, we have also enhanced our home renewables loan scheme with an additional £4 million, which is designed to support householders to take up different opportunities to embark on the renewable heat incentive scheme. There are a number of different areas in which we are taking practical steps to support district heating activity, and we will continue to sustain those initiatives in the years to come. I am sure that you will be gratified to know that Norman Kerr, when he gave evidence to the committee, was very complimentary, but the Scottish Government report and drew a comparison with other nations of the UK and indicated strongly that Scotland's general approach to fuel poverty was a much better approach. I wonder if you agree with the sentiment that they expressed that, to the extent to which Scottish Government funding is designed to be complementary to UK initiatives and funding streams, the uncertainty that seemed to prevail with the UK funding streams made it very difficult for the Scottish Government to design complementary schemes, particularly in the rural areas. I think that one of the committee members mentioned that off-gas grid measures are particularly difficult to implement and present significant challenges, and the UK Eco, for instance, does not do well in rural areas where those kinds of off-gas grid and hard-to-treat property issues prevail. The point of principle that I would make here is that I think that people would be surprised if the Scottish Government, under the current constitutional arrangements, did not try to act in a complementary fashion to what the UK Government is proposing. If we were to act in a duplicating fashion, then it would take an awful lot of explanation as to why we are using scarce public resources in a fashion that is complementary to what the UK approach was designed to do. I think that one of the challenges is that this has been an area of charitable evolution within the UK Government. We have essentially had to await details of the final design of the eco scheme. Of course, to go back to my answers to the convener a moment ago, our ambitions of what we want to achieve require an element of effectiveness from our expenditure but also effectiveness from the UK Government expenditure and the investment of the power companies into the bargain. We have to see all that joined up. As I said in my other answers, we have put a lot of effort into trying to ensure that that is joined up and effective in that respect. Certainly, designing initiatives that are complementary and that work in a fashion that is supportive of each other and that assists the wider policy objective of tackling fuel poverty, that is exactly the hallmarks of how the Scottish Government would go about exercising its responsibilities in that respect. Another point that Norman Kerr made, which raised some eyebrows in the committee, was that some of the Scottish Government funding, the HEAPS funding, expressed disappointment that a fair number of local authorities—I think that he was not keen to mention them by name and single them out—had spent none of the first years allocation and were struggling to implement schemes and spend the money so that the Scottish Government had made that money available. However, councils perhaps were not ready to implement schemes that action on the ground had not been taken and the money had not been spent. However, he complimented the Scottish Government on showing a degree of flexibility and allowing them to carry over that funding to following years. Would you agree with Norman Kerr's analysis? I wonder whether there is more that can be done to assist councils to or encourage them to get that money out of their tackling fuel poverty. I am certainly advised by local authorities that they will fully spend their budget allocation for 2013-14. That would be my expectation. 60 million of area-based expenditure has been allocated to all 32 local authorities on 4 June. That includes significant investment for the more remote parts of Scotland with which Mr Mackenzie will be very familiar. I cannot see any reason why there would be any justification for local authorities being unable to spend the resources that have been allocated to them. It is clearly in the interests of householders and constituents in local authority areas. I am assured by the information that I have been given that local authorities have spent their full allocation for 2013-14, but we will maintain our dialogue with local government to make sure that that continues during this financial year. On the heaps, some of the evidence that we received was that not all local authorities areas have energy efficiency officers, and it would seem that the authorities who have energy efficiency officers perform better. I think that the key question that we have to answer is how is information disseminated and how is activity taken forward to make sure that energy efficiency measures are taken forward? In my constituency, for example, there is an energy-saving social enterprise being created and supported by some climate challenge money from the Government based in the town of Coupar Angus. It is a locally-based initiative. It is embedded in the community. It is essentially providing advice in a very, very accessible fashion. If I may say so, more accessible than normally would be provided by Perth and Kinross Council. It is right in the heart of the town. I do not think that we should make a judgment that the only way we can deliver this type of activity is if we have a local authority employee that leads the process. Part of the Government's agenda—excuse me—on public service reform is to motivate the participation of a wide range of different providers, including third sector organisations, who Mrs MacDougall will know for her own experience, are fabulously well connected with local communities to try to encourage participation. I would caution against believing that we have to have a designated local authority officer in place. I would certainly say that there has to be very clear and effective delivery and encouragement mechanisms in place in localities. If that happens to be delivered by a third sector organisation, I think that as long as it is effective, we should be content with that. The issue around those locally-based organisations is that perhaps they are not covering the whole local authority. They may well not be covering the entire local authority, but what I am saying is that just simply the existence of one energy efficiency officer for a local authority does not give us satisfactory information or reassurance that all that can be done is being done to try to promote and encourage energy efficiency and to give practical advice to individuals. We have to make sure that that is the key question that has to be answered. Is it practical and impossible for members of the public? If I think about my own circumstances, I put off getting cavity wall installation in my house because it was just too hard to do, too difficult, blah blah blah. I went along to an energy efficiency fair one day, met one local charity with one phone call, the assessment was done at my house, and then the work was done. It was a great deal easier than I thought it was going to be, but I even overcame my own obstructive laziness on these questions. But it is about is the information available to people, is it provided in a fashion that is accessible to people, and therefore I think that it is more likely that people will make the commitment to undertake these steps. On Friday morning, I was in Abbeymore at Energy Action Scotland's annual conference, and I took part in a debate. Obviously, the hall was full of experts from across the country. I think that it is fair to say that they are very supportive of WWF's call that retrofitting energy efficiency measures become a national infrastructure priority, and they were pointing out that there are 3,500 jobs in the short term, perhaps 9,000 jobs in this industry by 2027, if we are serious about modern apprenticeships in this area, becoming really expert at treating the hard-to-cheat houses that we have. Does the Scottish Government support such a call that this is seen as a national infrastructure priority? I think that I would support that, because over the years that we have discussed those issues, I would be the first to concede that the hard-to-reach properties, the retrofitting work, is by far the greater challenge than applying state-of-the-art energy efficiency measures to new-build properties. It is a completely different proposition. I am very sympathetic to that point. It is also the way in which Alison Johnstone expressed it, because it demonstrates that there is an economic benefit to be had. There is also a skills and development opportunity for young people through the modern apprenticeship activities. By expressing it in that fashion, it relates to other areas of the Government's activity in which we can identify how other elements of public expenditure on modern apprenticeships, for example, can be used to support a wider programme of housing improvement, which will bring energy efficiency benefits but will also bring economic benefits in the short term into the bargain. That is very heartening. There was a representative from the Western Isles Council, and he pointed out that fuel poverty can reach as high as 71 per cent of homes. There are specific challenges in particular areas, and they were calling for more attention to be given to those areas as a matter of urgency. One of the points that the convener made to me earlier on that Mr Kerr had made is something that we need to be very mindful of. The degree to which the ever-hard-to-reach, if I can use that terminology, of perhaps the most acute example of some of the aspects of fuel poverty will be likely to be in the Western Isles. We have to be mindful and test as to whether or not the wider steps that we are taking to tackle fuel poverty are reaching the ever-hard-to-reach areas in as effective a way as we possibly can. Mr McKenzie also made the point about the off-gas grid challenge, which is a particularly acute challenge in many areas of rural Scotland. It is a particular priority. In the report that we received last night, for 2015-16, the draft budget funding for the warm homes fund has yet to be confirmed. Do we know when we will have more information? I expect that to be done fairly short. I cannot give the committee a precise date as to when that will be, but the decisions that will be taken will be mindful of the need to complement wider programmes that are taking forward as part of the fuel poverty measures. The decisions will be undertaken and communicated in adequate time to ensure that money can be wisely spent in the course of 2015-16. We received the funding for climate change mitigation measures last night at 4.30. I am just wondering if it would be a tall possible in future years to have that information earlier. I realise that officers are waiting on other information in order to get this together, but I am just wondering if that is a possibility. We are certainly endeavoured to do that. I was not aware that there was a problem with time, so certainly when I cleared the information to come, it is only within the last who is trying to think when I cleared that information to come. I think it may have just been on Monday, but I would have to check that. I do not realise that there is a problem, but I will endeavour to get that. We have got the level 4 information to committees much earlier than habitually has been the case, but the climate change mitigation profile of the budget is essentially what we are. We have a commitment to the finance committee to present the budget largely in the format of the blue book. I quite appreciate that other committees have a slightly different way that they want to look at this information, and we then have to recalibrate and recalculate that alongside the level 4 information. I will certainly endeavour to ensure that that is provided to the committee. The fossil fuel levy budget line has been significantly reduced and reprofiled, but I am just wondering if we have any information on what the plans are for this budget. Can we expect to see an increase in later years and, I suppose specifically, where is the £20 million of previously committed funding being reallocated to? Where I make a discussion of the wider management of the budget issues, I will go through a process with all portfolios, including my own. I will explain whether previous plans are appropriate and capable of being delivered. We set out 12 months ago the draft plans for 2015-16, and I have tested during the budget process whether those plans are still capable of being delivered and whether they are the most appropriate uses of the resources or whether there are other areas of activity that might have a higher call on those resources. On the renewable energy investment fund particularly, my assessment of the likely pipeline of projects was such that it would not be—I was not confident that the £20 million would be required to be delivered given the pipeline of projects that it demands. The basic factor that we have wrestled with here is that there has been a lot of market uncertainty about renewable energy developments created by the electricity market reform process that has been taken forward within the United Kingdom. That has undoubtedly slowed up emerging developments that I would have expected to see coming forward. My judgment was based on the available pipeline information that we would probably be unable to spend at £20 million, so it has been reallocated to other priorities within the budget. However, the fossil fuel levy generated £103 million for the Scottish budget. We have an obligation to spend £103 million on projects that would qualify under the renewable energy investment fund. We will do that, but we will do it over a longer time frame than was originally envisaged. I certainly give the commitment to the committee today that the obligation that I accepted around the fossil fuel levy resources of £103 million has been spent on relevant commitments in that environment will be spent over a longer time frame. The submission that we have had from the existing homes align Scotland talks about vagueness in the draft budget about how additional funds will be levered in. Given the funding that is coming from the Scottish Government at the moment, £79 million, and given just how far off we are at the moment from the 2016 target being reached, on your current plans in the budget, we haven't got a cat and hell chance of making that target, have we? Why isn't there a more significant response from that from government? I apologise, but I'll be drawing whatever works which I'll draw. I think that it's maybe just a bit fruity for a Wednesday morning, even from Mr Baker. Let's just take apart the fruity sentences. Mr Baker suggested that there wasn't sufficient definition in what we expected to be leveraged in. I've already told the committee that, in 2013-14, we assessed that about £170 million was deployed by energy companies under eco into energy efficiency in Scotland. Adding to the commitments that the Scottish Government has made, that makes a total investment of over £260 million. Mr Baker is very carefree with public expenditure and wider expenditure, but £260 million is one hectare of an amount of public expenditure and private investment in fuel poverty measures. Given that the existing Homes Alliance has said that we're calling for the fuel poverty measure to be increased from £79 million to £125 million, and I've said that £260 million was spent in 2013-14, I think that the Government is living up to what's required in this area. The Homes Alliance has talked about vagueness in your statement in terms of funding and leavering and I think I've made my point to convene him. Have a fruitly. I just thought I would pick up, it seems to me almost in what you've been saying about energy market reform, the uncertainty leading to a slowdown, and we hope it's only a slowdown in renewable energy projects and investment, that that almost seemed to be analogous to the points I was trying to make, but I just wonder how that and also other unfortunate market signals that the UK Government has sent, things like solar PV, feeding tar has been reduced drastically in a very short period of time and the provocation and the inordinate length of time that it took to bring forward the domestic renewable heat incentive. Insofar as Scottish Government funding is designed to be complementary and that some there's a crossover between renewable energy and fuel poverty, some community projects using profits from renewable energy to mitigate fuel poverty in their areas and so on and so forth, this kind of theme of the difficulty of designing funding streams from the Scottish Government that work well given the uncertainties stemming arising from UK Government, that must create difficulties. I think that the renewable energy project's point is a valid comparison here. Any dispassionate observer, and I'm trying to be as dispassionate as I can be this morning, would say that there has been a hiatus in investment created by the discussion around electricity market reform. It's taken longer than was envisaged. It is involved a great deal of uncertainty for the marketplace. I think about my own conversations. I have had conversations with inward investors, for example, who were very close to making decisions about possible investments in renewable energy within Scotland, but 12 months later their interest was much less significant and much less timely because they felt that they had less clarity about electricity market reform than when we were having our conversation in 2012. There is clearly a challenge here and obviously a challenge where we want to make sure that our money is used in a complementary fashion because members will be sufficiently familiar with the approach to public expenditure management that I have taken. I am not interested in duplicating expenditure, but I am interested in making sure that expenditure is used wisely in a focused way to deliver better outcomes for people. If we are not sure what else is coming into the mix from the UK Government, it is often difficult for us to plan effectively. The decision that I have made on the reef expenditure for 2015-16 is that, in the current context, my judgment is that I don't think that £35 million would be required, so therefore we can use those resources in other areas of the budget. Given what we have heard about Western Isles fuel poverty, we know from recent reports that fuel poverty is at very high levels in Shetland, again in Orkney and across other parts of the Highlands and Islands. Do you share my concern at the extra 2p charging on electricity bills for consumers across the Highlands and Islands? Surely that exacerbates the already difficult situation. Clearly, energy costs are a very significant issue for all households, but they are an acute issue for people in the Highlands and Islands, and they have an ever more acute problem for those who are living in fuel poverty. I understand and sympathise with the concern that Mr MacKenzie raised. I think that we have had a good kick of the ball in relation to fuel poverty and energy. I think that we should move on to enterprise and exports part of the portfolio. I will bring in Dennis Robertson. Good morning, cabinet secretary. Scotland has enjoyed a very healthy period of investment in Scotland—in fact, record investment in Scotland at the moment. In opening remarks, you have set targets for our exports and the internationalisation programme. That presents opportunities and challenges. What are the challenges in reaching the targets for the export market? There are a number of challenges that will exist there. I think that one of them will be about ensuring that we motivate and support and enlist a sufficiently broad range of companies in Scotland to participate in the achievement of the export challenge. That is one. Secondly, the access to markets will be hard to reach and will require a great deal of support to enter those markets. Obviously, there are a range of resources at our disposal in international markets to assist that process. Thirdly, the wider economic conditions can be a factor in relation to the achievement of those export challenges. The weakness of the Eurozone, which represents a very significant export market for Scottish companies, is an issue with which we have to consider in meeting the export challenge. I could go across a range of other factors, but those are some of the key issues that we have to address. We have to make sure that the support that we put in place is tailored and focused in a fashion that supports companies in achieving those objectives. We recently were in Perth. We heard some very positive aspects about how account management firms were being assisted through Scottish Enterprise and a lot of good news about the SDI, but in one area there was some concern. That is the area of agencies that perhaps fall out with account management criteria, especially in the small and medium-sized enterprise area. From your opening remarks, I noted that you were going to encourage a lot of those small and medium-sized companies who maybe have not been exporting, but have the potential to. What assistance can we give them to enter into that market? There are a couple of points that I think are relevant. The first is that on the account management issue, I think that I have made this point to the committee before, but it is a point that I am never tired of making. The account management structure is not just available for big companies. It is available for companies of all sizes, so I can think of and have visited two-person companies who are account managed by Scottish Enterprise or HIE. They should be because the crucial criteria that they touch is that they are high-growth companies with potential. I am constantly testing and challenging Scottish Enterprise that the account management decisions that are made are focused on the companies with growth potential in our economy, not just the big companies in Scotland. I am not going to sit here and say that that is absolutely always delivered and that it is a source of constant challenge that I am taking forward with Scottish Enterprise. The second point is that I am actively considering, and I am not yet in a position to make any definitive commitments about this, how we meet some of the challenge that Mr Robertson has highlighted of reaching a wider cross-section of the company base who are interested in exporting an international business activity. I am pleased to hear the feedback about account management. It is the feedback that I get around the country. Where a company is account managed, it generally feels well-served and well-supported. There is a question that flows from that. Are all the right companies getting account managed support and assistance? That is a question that I am now considering very actively, because if we want to achieve our export challenges—it is not just an export challenge, I think that we have also got an innovation challenge—I want to make sure that we properly enlist the companies who are prepared to make a commitment to that endeavour. If the companies are prepared to make a commitment to that endeavour, then the Government and our agencies should be prepared to support them in that process. I am looking at how we most effectively do that, and I am discussing that with the enterprise agencies. I am keen to make sure that, if there is a company in Scotland that is prepared to work with us in meeting the internationalisation challenges that we face as a country, I want to see that company getting its support. I will share further information with the committee in due course as I come to conclusions on the meeting of that particular challenge. Having followed the evidence that the committee took in Perth, I can see exactly where that point was coming from and it is one that I have been considering for some time. We have seen a very positive example of co-operation and collaboration within Arran, and a lot of small, medium-sized companies coming together, especially within the food and drink sector, to fill a container, which then goes to some of the five-star hotels in Dubai, for instance. Do you see that example of co-operation and collaboration being able to be used as a template to encourage other small and medium-sized firms to fill the freight containers to go to the market? That is one of the problems for some of the smaller firms. They do not have the sufficient capacity to fill freight containers. I think that that is a fabulous practical example. The geography of Arran lends itself to this, where you have a range of innovative companies and various other geographies. I am also struck by what I see from the Orkney Islands, where geography binds people together very effectively. They find a solution based on their geography and their addresses. I think that that is a marvellous practical example. I will certainly evangelise about that in my wider communication around the country. The other observation that I would make about exporting relates to some smaller companies. One of the points that strikes me about the new start business community in Scotland today is that most of those companies start off and think that their market is a global market from day one. Why do they feel that? Because connectivity is so readily accessible for them in terms of all the applications and software that we all have available to us. If I think back to the world that I occupied now about 25 years ago, when I worked in the field of business development in Glasgow, when you worked with new start businesses 25 years ago, the first thing that they did was produce a brochure. Once they conquered the Glasgow market, they might conquer the Renfrew market or something like that. Many companies now start off thinking that I am in Edinburgh and Glasgow and that I am connected to the world through broadband, so the world is my oyster. As in the thought process of start-up companies, they are thinking increasingly about global reach in their activities. I think that that is a really welcome process, but we have to get more and more companies involved in the process and actively engaged in what can be taken forward Looking at that global reach aspect, connectivity is incredibly important. I am quite sure that we all know the position of the Scottish Government with regard to APD and how that perhaps is another barrier within the market. In terms of having the appropriate skilled personnel in areas such as China and the Asian market, one of the criticisms that we are hearing about from SDI is that they have generalists in a lot of the offices that have been opened. Are we looking at ensuring that we have the appropriate skilled people within the markets that you are hoping to conquer? The key issue about having observed the SDI operation in a number of different jurisdictions around the world is that the fundamental requirement of SDI personnel is to be able to confidently and effectively support companies in gaining access to the market. I would not say that I thought that the greater priority was for them to be an industry expert. I think that we have plenty of ideas. If I take, for example, one of my trips that I made to Japan, for example, I was accompanied on that trip by the SDI person in Scotland and a Scottish Enterprise person also who were experts in life sciences and renewable energy. We were shepherded around different business visits in Japan by our local people on the ground who struck me as being fabulously well-connected and aware of the market, sensitive to the market, gave me very, very accurate and useful briefings about how I should approach the access to the market. If we got into a conversation about some sophisticated level of life science activity or renewable activity, I had my industry experts at my side from Scotland who were able to assist me in communicating that message. Crucially, the bit that our team on the ground could deliver was quality and informed access to the market. I think that that is the most important consideration and requirement that we should have on those individuals. The infrastructure and connectivity aspect. Is there enough spend within the infrastructure getting goods to market? For instance, there is a lot of criticism that we do not have the real connecting to shipping, for instance, and to some of our airports in terms of getting freight out. Is there enough capital spend going into that to ensure that we join up those areas? Members can make a judgment about the Government's capital spend programme, but if I look at the infrastructure of Scotland, I can see that there are clearly very significant improvements being made. The other week there, I was visiting the Clyde Gateway organisation in the east end of Glasgow and listening to the implications for that part of Glasgow of the Government's decision in partnership with local government to fund the M74 completion project in the east end of Glasgow. It has led to an opening up of tremendous economic opportunities for the east end of Glasgow. Clearly, our infrastructure spend can have that economic impact and it is designed to support a wider range of propositions around the country. I think that where I would accept the limitations in what we have on offer is about the service connectivity. Members will be aware of the signing just in the last couple of weeks of a memorandum of understanding between the Government, the Fourth Port Authority and DFDS, the freight ferry operators from the south. That has been necessary to support the continuation of a very important freight connection between Scotland and continental Europe. That is our only scheduled freight connection, as other vessels make the journey on a chartered basis, but as a service connection. I would concede that that is a limitation for us. Obviously, the fact that we have had to get into that discussion with DFDS and the Fourth Port Authority is an indication of the importance that we attach to connections of that type. Would we like to have more, most definitely? We would like to have more. I think that that is an area that we perhaps need to explore, because it will be another factor that companies have to wrestle with if it is a complicated and challenging exercise in getting goods to market. If I may just follow on that particular point. I promise that I would not mention Spaceport today and I will not, although I do think that we need to get it. Of course I have. One of the things that does concern me on that, and I know that it is much in the future, is that we do not seem to have a team together as New King Cornwall does. I would ask Cabinet Secretary to encourage to visit Scotland, Scottish Enterprise and other agencies to get together on that. Just on the air connectivity particularly, I do not know whether you can share anything with us regarding what you think might happen in terms of APD. Clearly, that has a major impact not just on tourism but on business tourism in terms of bringing experience with some people from China to Scotland. Associating with that is also the argument that Dennis Robinson just mentioned about consolidation internally, which would help. The fact that you mentioned low-carbon emissions that is currently at Scottish Exports are consolidated in some cases and are taken down on my road to go out in the belly of jumbo jets from Heathrow. What discussions have you had and how has that impacted your budget thinking? First of all, on APD, members will be familiar that I am aware that I am a member of the Smith commission and I have signed a trappist vow of silence on issues being discussed in the Smith commission, so if the committee will forgive me, I will not inadvertently incur the wrath of Lord Smith of Kelvin by discussing what has been discussed around that table, but I am sure that we have plenty of opportunities to discuss that in the period to come. On the issue of connectivity, we are operating a very collaborative approach in relation to trying to secure improved air connectivity routes. We had to put that in place because I think that I would accept that the Scottish combined collaborative proposition was not as focused as it should be, and we have put that together. It is a collaboration involving Scottish Enterprise, HIE, Transport Scotland and Visit Scotland. If we look at the fruits of that, it has been very successful in 2014. We have six new routes that have opened up in 2014. Edinburgh, Chicago, Edinburgh, Philadelphia, Edinburgh, Doha, Glasgow to Dile of Man, which I can see is not that far away, but it is still a market. Edinburgh, Arbyd, Arbyd and Glasgow Halifax. Interestingly, the Middle East carriers are reporting an increase in the volume of high-yield Scottish food and drink that is being carried out in the belly of those aircraft, particularly to the Middle East, which is obviously crucial in the Middle East hubs in terms of reaching Asian and Australasian markets. As I look at the issue of six extra routes, five of them are long-haul routes, I think that it is pretty good going for 2014 and opens up some new opportunities for Scotland. I think that the point of connecting all of that with the export of goods from Scotland is important. Obviously, the frequency of those flights is really crucial in securing the export of food and drink products, which will be crucial to get to those markets. Again, that is a cross-government effort. The rule of affairs secretary, Richard Lochhead, is very actively involved in the export activity and the promotion of food and drink around the world. I do my bit on the international stage. The First Minister has had extensive involvement in this area over recent years. A number of us are involved in trying to seize the opportunities to promote Scottish products to a wide range of different markets. There is no doubt that Scotland has had success, but one looks at what I was down in London just a few weeks ago. I am talking to people who were involved in the transport industry. Despite the protestations of the chief executive that he threw this morning on GMS, the infrastructure and the cost of building another runway that he threw will impact Scotland's tourism and export, potentially, either through cost or lack of appropriate infrastructure, never mind carbon emissions. That is something that has to be factored into our discussion. We talked about SDI earlier on. SDI and Scottish Enterprise, in general, and the enterprise agencies have been doing a good job. I wonder whether, given the emphasis on exports, the SDI budget represents about 10 per cent of the SE budget. I would like to ask Mr Mason a question in a minute about the Scottish Enterprise budget or finances. Should we be ensuring that Scottish Enterprise spend more of their budget, not necessarily creating specialists, but increasing the allocations and increasing the 10 per cent of the Scottish Enterprise budget? Obviously, a judgment has got to be made here within the wider finances. I am very happy to answer questions on the SE budget. Mr Mason may have to help me out, but I will happily answer them into the bargain. The Government has to make a judgment about the balance of its public expenditure across the whole gambat of expenditure. That ultimately will determine how much money is available globally for Scottish Enterprise and HIE budgets. I take those decisions across the Government and apply them in my portfolio. Within that, a reasonable balance has got to be struck between what we spend on external promotion and market activity through SDI and what is deployed supporting the company base in Scotland. I caution against viewing the SDI budget as the sum total of what we spend on trying to establish our export presence. What account managers are doing with individual companies in Scotland will be invaluable in persuading those companies to take the steps to get involved in international activity when they can then get access to the international network that we put forward through SDI. Obviously, there are judgments to be made about the right quantum of resources to be available, but that is how I would consider whether we use those resources and how we use them effectively to try to encourage Scottish companies to be involved in international markets. Yesterday, I convened the cross-party group on Social Enterprise, and one of the questions that was raised was internationalisation of social enterprises. I was surprised by the desire by social enterprises who now tend to see themselves different from the third sector, which is very important as it is highlighted in the budget in terms of supporting welfare reform and activities. However, how do you perceive the role in the overall enterprise of social enterprises? Should we be looking at a different budget because of their enterprise activities and, hopefully, their international activities? Mr Brodie has a great deal of focus on the social enterprise field in Scotland, so he has had to endure many of my speeches on the issues of social enterprise. One of the points that I made at the Social Enterprise award is just the other week there in Parliament. I am not sure whether Mr Brodie was there, but the point that I made was that I welcomed the fact that Scottish Enterprise was a sponsor of the Social Enterprise awards and was involved in the judging of social enterprises for those awards. I want social enterprises to have access to as much business development advice as the wider company base of Scotland—they are businesses. They are businesses of a different character, but they are businesses that are entitled to business development advice. I would be reluctant to create separate budget lines for social enterprise business support because I generally take the view that business development should be the 40 of Scottish Enterprise and HIE, but we should not have that fragmented. I made it quite clear in the past that I was against, for example, a business development role being given to creative Scotland because I felt that that would—I was perfectly happy for artistic organisations and artistic companies to have account management business development support from Scottish Enterprise, but I wanted that to come from a very strong business development base. For that reason, I would not be keen on a separate budget line, but what I would be keen on is making sure that I have made this point and that it is fulfilled by Scottish Enterprise—again, it is a social challenge by me—to the organisation to ensure that Scottish Enterprise is giving business development advice and support to social enterprises within Scotland, because I view social enterprises as fundamental to broadening the economic and industrial base of Scotland. I appreciate the cabinet secretary's great support for social enterprises. There is no question that the Government's economic strategy is well thought out, well founded and addressed, and I think that it is associated with that. It is obviously the financial stewardship that has existed over the past few years, but it would be unusual for me not to have one element of carping. We have just talked about social enterprise in Scottish Enterprise. Scottish Enterprise has a net worth of £514 million according to its account. I wonder whether you are happy that Scottish Enterprise follows the Government's economic strategy, because it has just written off £1.3 million to a social network site on support, and it has just offered £2.7 million in RSAs to a London-centric one-stop shop for accountancy and insurance. Is there proper engagement in following that strategy? Is the short answer to that question? There is absolutely no doubt in my mind, and I think that if the chairman of Scottish Enterprise was here, he would say to you very clearly that he understands his mandate. If I look at my letter of direction that I send annually to Scottish Enterprise and HIE, one could not read that letter and think anything other than that organisations are being directed to follow the Government's economic strategy. That is just a given for me. Individual investment decisions are clearly not taken by Government, they are taken by Scottish Enterprise, and I expect them to be taken within the context of the Government's economic strategy. I do not seek to interfere in the individual operational decisions that Scottish Enterprise takes in that respect, other than to say that the organisation must have a compelling basis for justifying that investment, which I know are issues that the committee has raised with them and have tested the organisation on. I am conscious of the time and I have three more members that I need to get in and start with Richard Baker. Cabinet Secretary, you will be aware of the importance of the oil and gas sector, not only to its contribution to our economy but in terms of exports as well. I want to ask just a couple of questions on the submission that we have had to the draft budget from oil and gas UK. They say that members have a view that the landscape for export support is cluttered and that they can be unclear which department or agency to go to. Is that a comment that you recognise or think is fair, or what do you think needs to be done to ensure that those businesses that will be growing their export activities know exactly where to go to get the help that they need? I think that it is pretty clear that any company that wishes support can engage with Scottish Enterprise who are connected directly to Scottish Development International who act on behalf of all of Scotland. The necessary support and opportunities can be made available to companies to enable that to happen. Within a Scottish context, I do not think that there is any lack of clarity at all. You mentioned support that industries need to sustain their activity in the North Sea, to increase exports. One of the issues that UK oil and gas also highlights is the scarcity of skilled labour. In terms of adjusting skills gap, the further education sector has a key role to play to ensure that you wear Aberdeen College, the work that it does in schemes to train up workers in the oil and gas industry. Given the importance of providing those skilled workers for the industry to maintain activity in North Sea and to increase exports, is not a real-terms company FE budget risking undermining that work? We hope that those businesses will carry out. No, I have to wrestle with a real-terms reduction in the Government's budget. Regrettably, there will be real-terms reductions in budgets within Government. The FE budget is going from £522 million to £526 million. It is going up in cash terms, except that there is erosion in real terms. However, the Government's budget is being eroded in real terms. If we are giving a commitment to, for example, give a real-terms increase to the health service that will have in a budget that is reducing in real terms, there will be implications across the board. We have an extensive discussion around the funding of further education in recent years. I support entirely the steps that the education secretary has taken to reform the college sector. I think that anybody observing the college sector, and certainly I hear lots of commentary about this now, believes that the reform programme has been necessary and successful, and has improved and strengthened the college sector. I think that there are two final observations that I would make. One is that I believe that it is absolutely essential that the college sector is focused on supporting individuals in the world of work, so that the connections with industry are critical to ensuring that the college sector is properly attuned to the requirements of the labour market. Finally, the investment that we have made in the energy skills academy in the north-east of Scotland, which was an initiative that came out of the four educational institutions in the north-east of Scotland, has been particularly helpful in that respect. I think that it has also been a trailblazer for the regional college model that is now the norm across the rest of Scotland. It is really just to say that it believes that the industry has a role to play in actually fulfilling that gap of the skills sector. I believe that Serene Wood made that point in his report. Yes, I think that the industry has a role to play, and the industry working together with Government will have a very strong combined beneficial effect in addressing those issues. One of the points that I would reinforce to the committee today, which is central to the whole area of skills, is that there is sufficient industry engagement in designing what skills development we are required to undertake. Serene Wood's report was a main point to the Scottish Government on skills in the younger workforce. It was also a point that Serene Wood made in his report to the United Kingdom Government on oil and gas, and it is a point that certainly leads to a great deal of frustration on my part that industry is not always as close to influencing the decisions about what our educational institutions are concentrating on, because to get that focus right to support individuals in the world of work is, in my view, crucial in this area of policy. I was pleased to hear that you talked about closing the gap between large enterprises and small and medium enterprises in terms of the support that they got from Scottish Enterprise and the Account Manage Network. I wanted to talk about regional disparities in LADs when Scottish Enterprise was in front of the committee in Perth. I highlighted to them that the total account manage exporters in Dumfries and Galloway—my region—is 1.8 per cent, which compares to 20 per cent for total account manage exporters in Edinburgh and the Lothians. Now you would not expect Dumfries and Galloway to be on a par with Edinburgh and the Lothians, but it is the lowest and it is substantially behind other rural areas. Do you share my concerns that there were too many regional disparities across Scotland in the level of support that they get? I think that the statistics that Joe McAlpine raises are accurate. What I have in front of me is that the number of growth exporters in Dumfries and Galloway is 18. The percentage of total AC growth exporters is 1.8 per cent, but the percentage of total growth companies in the area represents 51 per cent. I quite understand that the 1.8 figure causes a degree of concern, but I looked at it in the context of the total growth companies in the area. It is slightly more comprehensible. Having said that, I come back to the point that I made earlier on, which is about ensuring that we are talking to the right growth companies. One of the issues that I repeatedly raised with Scottish Enterprises is to make sure that we are actually canvassing the company base of Scotland effectively to see where the growth potential will exist. In Dumfries and Galloway, there may be relatively small enterprises who have fabulous growth potential, who would benefit from Scottish Enterprise's growth support. In my opinion, according to the Government's strategy, those characteristics are entitled to receive that support as any other company in any other part of the country. So, I think that ensuring that that focus is properly taken forward with Scottish Enterprise is an important part of the work that is taken forward. The other thing that I would add to that is that I followed the question that Joe McAlpine has made of Scottish Enterprise on this question. I meet a couple of times a year with the South of Scotland Alliance, which is a combination of the local authorities, the Scottish Borders Council and the Ffuson Galloway Council and Scottish Enterprise and some other public bodies. In the course of those discussions over the past few years, I have picked up a sense that they would like to feel on the receiving end of more attention from Scottish Enterprise. I think that there is a sense that in the South of Scotland there is not a dedicated economic development agency as there is in the Highlands and Islands, and that is a product of history. What came out of that was my invitation to the South of Scotland Alliance to formulate a proposition for better and more effective engagement with Scottish Enterprise on a shared agenda to improve economic performance in the South of Scotland. That has now emerged. I have received that, and that will be the source of on-going discussion with the South of Scotland Alliance to ensure that we deliver properly and fully the range of economic development assistance that is required in the South of Scotland. I welcome that. That is very encouraging. There is a sense that the reorganisation a number of years ago of Scottish Enterprise has worked in other places has not worked in the South of Scotland and certainly in the South West of Scotland. It is seen as not working. The development plan also mentions your on-going commitment to NPF3. NPF3 had a number of conversations with the planning minister about it. The development plan is based on city regions. The South West of Scotland is the only part of Scotland that does not fall into a city region. Therefore, it is outwith that policy framework. One could say that, for example, the borders are part of Edinburgh city region, another part of the South of Scotland, but the South West is not. Do you see that as a problem? I think that there are a couple of very significant points in here. The first is that the conversations that I have had through the South of Scotland Alliance, and it has been a very helpful conversation, has got us to a position where some of the inherent concerns that the general public has raised are able now to be addressed by the formulation of this joint proposition, which has emerged. I can give the assurance that this will attract my personal attention to make sure that those issues are properly addressed for the second reason, which is that, in the Government's economic strategy and in our national performance framework, we have commitments around regional equity. The meaning of regional equity is that no part of Scotland should be left out of the process of economic development and economic renewal. I have to make sure that that has felt as strongly in the South of Scotland, and particularly in Dumfries and Galloway on the issues raised by Joe McAlpine, as it has felt in central Edinburgh. Making sure that we have appropriate interventions in place around the country is essential to realise that. I do not have NPF-3 in front of me, but from my recollection, there will be a number of strategic developments in the south-west of Scotland. I would be very surprised if Cairn Rhyon etc. were not involved in that. I would be a bit surprised if the Crichton campus was not. You are talking about the 14 national developments across Scotland as part of NPF-3. Will there not be any in the south of Scotland? I would be surprised if Cairn Rhyon does not attract a certain amount of significance in NPF-3, but I better go and check my knowledge of that before. Cairn Rhyon did, but it has been taken off. I asked for the Crichton campus to be included, but it did not meet the criteria. I am totally welcome what you are saying and the personal interest that you are taking in it, but is there not an inevitable contradiction when you go for the critical mass that a growth strategy brings? You back growth companies in growth areas and that encourages more finance, whereas in an area that is suffering that does not have that growth, does not have the connectivity, does not attract as much of the support of your whole support is based on the critical mass of growth. The support is not based on the critical mass of growth, the support is based on where we believe in the company base that there is growth potential. I want to reassure the committee about the fact that that judgment is not just made about companies in city regions, it is made about companies of length and breadth of Scotland. That has to include the south of Scotland as much as it has to include any other part of Scotland for the simple reason that the commitments that we have given and the tasks that we have set ourselves on the question of regional equity are crucial to be fulfilled. It is not acceptable for us to have growth in Scotland that excludes significant parts of our country. That is at odds with the Government's economic strategy, it is at odds with the national performance framework. We have an obligation to look at those issues and to put in place the necessary mechanisms to address them. That work is under way through the work of the strategic forum that I chair that brings together the enterprise agencies with the funding council who will be heavily involved in the current and campus issues to ensure that that is properly reflected in the economic priorities that we take forward. I am conscious that we are running a little short of time, but two members want to come in on tourism, which is an area that we have not touched on at all yet. I will start with Mark Opieggi. One of the areas that came up in evidence with Visit Scotland was the importance of investment in business tourism and bringing conferences to Scotland. There is also a very strong thread of events-related work. You referred earlier to the impact of creating the new air routes on food exports and so on. To what extent is there evidence from the business related work, from the export promotion, that those events and conferences and that strand of Visit Scotland's work is generating new business for Scotland as well? I think that this is an area of great interest that has delivered significant returns. We have had in place the conference bid fund, which was of a fairly modest investment of £3 million. It has been instrumental in bringing into the country £107 million worth of activity. You put in three and get 107 black-out, which is a pretty good rate. I could do with a few more rates of return like that. We recognise that to be a very significant factor in what we take forward. Again, that has been responded to by the private sector. The SSE hydro in Glasgow, if I just single that out, is one particular venue. It now has the capacity to put on all sorts of performance, not least from the Deputy First Minister in a couple of weeks' time, but from other international stars into the bargain, which gives people a reason to travel substantial distances to come to see particular performances and the spillover effect into accommodation and spending is very significant. The Scottish Enterprise has been heavily involved in supporting the development of that venture, but it has taken private sector capital and leadership, and it is a great asset for us to have in Scotland. The conference market is one of very significant potential. We will be wanting to sustain our presence in that area. It is a very competitive market, but we have a very competitive proposition. The more these events happen, the more frequently there is a fruit fall that is coming into Scotland in this week, the more the justification is there for direct air connections and other transport connections that can be beneficial in that respect. I see that as a crucial tool in expanding our tourism presence. In terms of the knock-on effect, it is one thing to spend £3 million, get £107 million back in conferences, and that is a great return. It would be an even better return if that was then leading to people coming from around the world, coming to Scotland and making business links here, and then starting to trade with Scotland. For example, I believe that that is a major feature of the work around the Rider Cup. In your work, either abroad on trade missions or with Scottish Enterprise, is that something that we are starting to see coming through? Yes. This year has been an absolutely bumper year for people having a reason to come to Scotland, which can give us a platform for business development conversations. Principally around the Commonwealth Games and the Rider Cup, these were two huge events. Scottish Enterprise deployed very significant resources and people. This is lots of staff working all the hours that God sent to weekends and all the rest of it to make sure that I do part of a number of different events with Scottish Enterprise aimed at business development purposes. From that will come a whole range of leads that will be followed up in due course. I would not want, in any way, members to think that our approach to the pipeline of business development connections is anything other than a sustained contact network that is pursued to secure those business benefits for Scotland. If it happens to be that somebody comes here because of the Edinburgh Book Festival or the Commonwealth Games or the Rider Cup or whatever it happens to be, it will be followed up in a fashion to secure business connections. Lastly, Visit Scotland described themselves as pleased with the budget that they had. I think that is stakeholder for ecstatic given how not-forward people are when they come to talk about those things. In particular, there was a point that they have £5 million more to spend on marketing than they had expected. Is that something that you would recognise and what is the thinking behind that in terms of maintaining their funding at that level? At the end of the opening ceremony for the Junior Rider Cup in Blue Gallery Golf Club, the chairman of Visit Scotland was there. I just observed to him that the weather forecast was fabulous for the Rider Cup. That would mean that Scotland would look wonderful to the international audience on television for that. It looked wonderful during the Commonwealth Games. It looked wonderful on many, many live broadcasts that I saw from the referendum campaign, so there really would be no need for him to have any extra money for his marketing campaign. He did not take that terribly well, given his protestations to me over some time. In a case well-marshalled, I have to say, by the Board of Visits Scotland, of the case for them to have additional marketing support. I will tell him that Mr Biagis' interpretation is that he should be ecstatic about his £5 million. I am not sure that he will necessarily be ecstatic. I will just assume that he is ecstatic then when he next comes to knock my door for more money. However, my impression—it is not my impression—is that the evidence of the Visit Scotland marketing activity is that it delivers a very significant economic return to Scotland, so it is money well-spent. The quality of the marketing campaigns that are undertaken, the surprise yourself campaign, I thought was a beautiful, beautiful presentation of Scotland. I took a decision in a tight spending round to allocate more resources than I had planned to allocate to Visit Scotland to try to give the organisation the opportunity to build on what has been a fabulous year of promotion of Scotland. An awful lot of it, we did not have to pay for it through the Visit Scotland marketing budget, but we had to pay for it from various other budgets. Nonetheless, Scotland looked great in 2014 to a world audience. We need to continue to sustain that, and that is the purpose of that. I am very confident that we have great confidence in the marketing activities of Visit Scotland to use that money wisely and effectively. How important is the promotion of brand Scotland in the potential of opening up the export market globally? For a whole variety of reasons, Cull Mealth Games' Ryder Cup referendum Scotland has been in the news like we have never been in the news across the world. Television audiences for the Ryder Cup of 500 million homes is really quite extraordinary. Frankly, the country could not have looked more magnificent than it did for those in an event, as was the case during the referendum and the Cull Mealth Games. The impression that the wider world will have achieved to Scotland over the course of 2014 will have been a good, strong and profound one. We cannot just say, well, that is the job done. We do not need to continue to reinforce that. The tools of markets are an intensely competitive market, so therefore we need to continue to fuel that. In the business development market, the presence of SDI is very strong in promoting the reasons why Scotland should be a destination for investment. That is across a whole variety of reasons. It is not just about the topography and the geography and the scenery of Scotland. It is also about the economic strength, the skill base, the educational capability and the inventiveness of the Scottish population. Those are values upon which we trade very strongly. I think that that concludes our session, just slightly over time. On the committee's behalf, I thank the cabinet secretary and your colleagues for coming along. It is very helpful, and we will now need to consider our budget report. On that point, we will have a short suspension and go into private session.