Chamber and committees

As I said, there are a number of areas of spend in portfolios across Government that will impact on rural areas. An example of that is the spend on, and support for, the enterprise agencies, particularly South of Scotland Enterprise and Highlands and Islands Enterprise. The investment in those agencies is at the highest level that it has been since 2010-11. There is also funding for VisitScotland.

The funding for the three enterprise agencies and VisitScotland has been protected. That will be vital because the enterprise agencies provide advice, support and targeted funding opportunities across their areas, which helps small businesses to grow and develop, thereby creating jobs and, ultimately, sustaining our rural communities. Alongside supporting some of our more traditional rural businesses that are based in food and drink, tourism and the creative industries, they are promoting the growth of new, innovative rural growth industries, such as renewable energy and the space sector. They also have a critical role in helping us to achieve our net zero ambitions.

There are also significant contributions from other national programmes. An example is the green jobs fund, given the importance that the growth in the environment-related sector will have in rural areas. There is also the five-year place-based investment programme. Even though that is not directly within my portfolio, rural communities can be expected to benefit from that support.

You asked about where the decrease in funding from the UK Government has had an impact. You can see that impact in the replacement of EU funds. We were promised that they would be replaced in full, but that has not transpired. The European maritime and fisheries fund is an example that I have used previously. Just over £14 million has been identified to replace that fund, but our entitlement should have been in the region of £62 million. We also expect a shortfall of around £95 million in funding for agriculture up to 2025. If we had received what we were promised and the funds had been invested in fully, that would have enabled us to go further in our proposals.

Exactly.

I note that we are not subject to subsidy control. We are able to operate effectively under the trading co-operation agreement that is in place at the moment. Again, because of its very nature and the fact that we need those interventions, the situation with agriculture is very specific and separate to other subsidy control or state aid regimes. However, that is not to say that it is not monitored. As I said previously, we have the WTO agreement on agriculture. It is therefore simply not necessary for it to be caught by the bill. That is where it is frustrating, because, with that information so far not having been shared with us, it is hard to understand the rationale for its inclusion. We see no reason why it should be included when it is covered by those other schemes.

There has been collaboration on the common frameworks. As I said, it is now up to the legislators to approve what has been set out. There has been collaboration there, which is why it is disappointing when we see pieces of legislation such as the 2020 act and the Subsidy Control Bill, because they undermine the process in which are all engaged in good faith.

As I said, I believe that the process for engaging on the frameworks that have been published has already been set out. However, it will be up to the committee to determine how it undertakes that scrutiny. Obviously, I am willing to engage in that process with the committee. I want to be open and transparent and to work with you as much as possible. If you want to have a discussion about some of the frameworks that will be coming forward and how we will undertake that process—although some of that is for the committee to determine—I am more than open to engaging in that process with you.

The evidence that we have has shown that there has been a dramatic drop. You will have heard a lot of that evidence articulated in the debate on labour shortages that took place yesterday. My rural affairs and islands role includes responsibility for the food and drink industry, which has been heavily affected by Brexit. You can see that there has been a massive shift and a drop in population in relation to the industry’s labour needs. There is no doubt that there have been dramatic changes there.

We have had to consider specific things that we can do within our own powers. Yesterday, I announced some of the rural visa pilots that we will consider. It is very frustrating that our labour needs and population needs tend to be ignored by the UK Government. A number of approaches have been made by me and by colleagues across Government to UK ministers in the Home Office, which have largely been ignored. I think that more than 19 attempts were made at the last count, whether by letter or otherwise, to address some of the issues that we are facing at the moment. There is a refusal to engage with us on some of the issues, unfortunately.

They feel that the impacts are massive. I undertake extensive engagement with stakeholders across the piece, and labour is the issue that has been raised first and foremost above any others. A lot of businesses have been at crisis levels.

There is a fortnightly meeting with the food sector resilience group, at which we engage with our food and drink stakeholders. I understand, from hearing about some of the issues that have been experienced, that 63 per cent of seafood processors have experienced shortages and that some of them are up to 15 per cent down. I have heard story after story about various businesses losing out on multimillion-pound contracts purely because they were not able to fulfil the orders required of them, as they did not have the staff available to them.

There was also the announcement on Christmas eve about the seasonal agricultural workers scheme. Disappointingly, it will be tapered off over the course of the next few years, and that has been met with anger by many of our stakeholders and by NFU Scotland, who are seriously concerned about the impact of labour shortages on the sector.

Those are the issues that we continue to raise time after time with the UK Government, as shortages are at critical levels. I would be happy to check the figures on social care and tourism with colleagues who are responsible for those areas and to come back to the committee with further information as to the impacts there. As acute as the shortages are across the sectors for which I am responsible, there are acute shortages across the piece, which disproportionately impact our rural communities.

That is not the case at all. We are looking at a number of employment initiatives. Of course we want to encourage people to work in these different sectors. The food and drink industry is such an exciting sector and there is so much that we can do to promote it as a career that our young people can engage with and get involved in.

A number of initiatives are working on that, and we are also looking at some initiatives to try to tackle depopulation. However, there is no getting away from the fact that, although we can do these things, they are medium to long-term interventions but the immediate critical issue is helping businesses to survive. That is what we need to address.

I do not agree with that assertion at all. I hope that I have been able to explain in my previous responses to you, and in my responses to some of Jim Fairlie’s questions, why we have set out what we have in the budget. There is no point in us allocating money, or looking to protect moneys, in the budget that we know for a fact that we will not be able to spend because of some of the issues that I have outlined, whether in relation to financial transactions or the capital schemes for funding equipment. There is no doubt that, if we did that, and there were huge underspends in budgets and areas that we had not been able to progress as a result, you would be criticising me in my future appearances at committee.

I have set out the realistic level of spend that we can hope to achieve over the coming financial year, while firmly setting us on the path for transformation. Again, I come back to the work of the implementation board in ensuring that we co-develop the approach with our stakeholders and with industry. That is where the national test programme comes in. That work, as it progresses from spring onwards, will be vital, because we need to take the whole industry with us. I hope that some of the measures that we have set out in that regard will enable that to happen.

You are absolutely right that housing is critical. I hear about it a lot; it is continually raised with me. When I responded to Beatrice Wishart, I spoke about how the islands bonds cannot be seen as a blunt instrument that will automatically solve all the problems that are experienced on the islands, because there are so many other vital issues, including housing and wider connectivity.

I have regular engagement through the islands strategic group, which discusses such issues. I also have regular engagement with colleagues across the Government. For example, Shona Robison, the Cabinet Secretary for Social Justice, Housing and Local Government, attended our latest strategic meeting to discuss the Government’s plans for housing. Although the spend in that area does not necessarily fall within my portfolio, an action plan for rural and island housing is being developed and it will look to tackle and address some of the critical problems. The issue is raised repeatedly and we are committed to tackling it.

I was going to say that the funding that Marine Scotland has received has been appropriately spent. Again, however, I note that a lot has changed, even just over the past year. We declared a climate emergency and a biodiversity emergency, and we face similar challenges in the marine environment to the challenges that we face on land. As I outlined, the extra £10 million in resource will really help Marine Scotland to face up to some of those challenges, as well as in the drive for offshore renewables, which I mentioned earlier. We need to ensure that we enable that work, which is currently at the planning and consenting stage, to be done, and that we have in place the resources to scale it up.

We also had the Bute house agreement with the Scottish Green Party, which led us to look at our priorities, reprioritise some areas and put in place some ambitious commitments. That is why the extra investment in Marine Scotland is so important.