Chamber and committees

As I have said, I have already committed to maintaining the current level of payments. When we are going through such a huge period of change, with so many uncertainties for people, to be able to give that commitment about maintaining the same level of payments is critical. That is something that I have already committed to in relation to the pillar 1 payments. It is also a matter of trying to give certainty and future clarity when it comes to future rounds of AECS.

When it comes to further rural development, you will see the commitments that we have in the budget to increase the budget for that in some areas. For previous EU schemes such as the LEADER programme, which has been vital for our rural areas, we have had to supplement that funding with our own domestic funding to ensure that we are still investing in our rural communities. That is a commitment that we have made, and we will be continuing to invest for our rural economy in the particular areas concerned.

Thank you very much, convener. When I made my first appearance before the committee in September last year, I set out the priorities for the rural affairs and islands portfolio, so I am pleased to come back today and set out how we intend to fund and support those priorities in the coming year through the Scottish budget that was presented by the Cabinet Secretary for Finance and the Economy to the Scottish Parliament in December.

The budget was published one year after the first Covid vaccinations were rolled out, and it comes at a crucial juncture for Scotland. As the emergence of new variants demonstrates, we must remain vigilant in responding to current and emerging public health challenges, and work out how to manage those risks sustainably into the future. We must be mindful of the need to recover sustainably from the impacts of the pandemic. For rural and island communities and businesses in particular, we must also do what we can to mitigate the impacts of Brexit.

However, despite all of that—particularly the fact that we are in the middle of a global pandemic—the United Kingdom Government has cut the funding that is available for the Scottish Government. The UK spending review in October also fell short of the Scottish Government’s ambitious capital spending plans. That has constrained our ability to invest in the infrastructure that is required to support our economy and public services and to deliver the green jobs and technology that are required if we are to reach net zero.

The Cabinet Secretary for Finance and the Economy has been clear that this is a budget of choices and that there are areas in which she would have wanted to go further. In the face of those pressures, the Scottish Government is firmly committed to using the full resources at its disposal to make Scotland fairer and greener.

One of my key priorities is to support rural industries and businesses during the pandemic and in the aftermath of the UK Government’s decision to leave the EU. Much-needed cash flow into our rural areas will come through my commitment to keep basic farm payments at the same level throughout this session of Parliament, with more than £630 million to be provided in on-going agricultural support in 2022-23. We are also maintaining support worth £65 million for our most fragile and marginalised areas.

Rural businesses, especially those that are involved in exporting food to the EU, are still absorbing the extra costs and barriers that were created by the loss of freedom of movement and free trade with our biggest export region, so we will continue to support our world-class food and drink sector in its recovery, supporting it to thrive and flourish into the future. The investment in Scotland’s rural businesses and communities provides them with a secure foundation to create growth, prosperity and opportunity, and I want to help them to do that. The budget provides funding to help to build that future.

As part of that, we are investing more than £8 million in the coming year in Scotland’s islands. That includes funding to create the first-ever islands bonds and the first-ever carbon-neutral islands, to support population retention and growth and to create innovation and energy hubs.

When I was at the committee in September, I spoke about the immense potential that Scotland’s rural and island areas have and their vital role in achieving net zero and enhancing biodiversity. Transforming our agricultural and marine sectors will be key to securing all of our futures.

We are investing £25 million to start work on transforming farming and food production in Scotland, so that we can be world leading in sustainable and regenerative agriculture. We are also delivering a new round of agri-environment investment as part of an overall budget of £36 million to support biodiversity. The new agri-environment climate scheme application round will open later this month and, in addition, I have made a commitment to future rounds until 2024. That is essential while we explore other ways in which farmers can be supported to deliver a nature-rich Scotland. Alongside that, to protect and enhance our marine environment and increase offshore renewable energy generation, we are increasing marine resources by almost £10 million.

Allocating funding between those different priorities is difficult, but I believe that the balance that we have achieved for the coming financial year is proportionate, particularly as we approach our multiyear resource spending review in the spring. We will fully support Scotland’s rural economy and our people during these difficult times. At the same time, we will provide the funding that will enable rural businesses and people to continue to build towards a sustainable future and help them and Scotland to become fairer and greener.

Thank you, convener and committee members. I look forward to our discussion this morning.

We are talking about two different things here. In relation to engagement on the Subsidy Control Bill, it has so far been difficult to get that information. The situation is similar to what I said about different areas in relation to population and the different departments of the UK Government that we deal with. Sometimes, we get no engagement whatsoever. So far, in relation to engagement on the Subsidy Control Bill, it has been difficult to get that information. As I said—

No problem. The scrutiny of the frameworks is important, and we remain absolutely committed to working collaboratively on common frameworks, in cases in which those are in Scotland’s interests, on the basis of consensus and in line with the principles that have been agreed.

In essence, the frameworks offer a model for progress by agreement and collaboration between equals that we think can be usefully applied to intergovernmental relations in the UK more widely. We recognise that there will be policy divergence; however, the model is the means by which we can try to manage that.

However, we face significant threats to the common frameworks process—a process that we engaged with in good faith—predominantly from the United Kingdom Internal Market Act 2020 and from the Subsidy Control Bill, which is currently working its way through the UK Parliament and which we believe is an assault on devolution the likes of which we have not seen since the Scottish Parliament was established. We remain fundamentally opposed to the imposition on Scotland of such legislation.

When it comes to a scrutiny role for the Parliament and for stakeholders, we are committed to transparency. Stakeholder engagement and parliamentary scrutiny are a critical part of the framework process. That is why we were clear that greater clarity was needed on the impact of the 2020 act and on the interaction of the frameworks with some of the wider cross-cutting issues before meaningful scrutiny by the different legislatures within the UK and by stakeholders could commence. We remain committed to ensuring that full scrutiny of each framework can take place, that stakeholder engagement occurs and that the outcome of those processes is reflected in common frameworks before their final agreement and implementation.

I emphasise that the frameworks are policy neutral. They are intergovernmental arrangements for managing and agreeing policy; they are not, in themselves, policy innovations. In many cases, they just reflect existing arrangements and agreements between Governments.

I know that a number of frameworks that are relevant to the portfolio are due to be published. I believe that that is going to happen this month. In one of my previous roles, I took part in the scrutiny of one of the other frameworks that the Scottish Parliament was asked to consider. Such scrutiny is important. The frameworks that fall within this committee’s remit will be available shortly.

No, I do not believe that it is necessary, because it completely undermines the common frameworks process. As I said in a previous response, we engage with the process in good faith, but there will obviously be policy divergence on some lines. The common frameworks process was meant to address—it is a policy-neutral framework—a means for the devolved Administrations to work together on an equal basis to manage policy divergence while recognising and respecting the specific roles of the devolved Governments.

However, what the internal market act has done, and what the Subsidy Control Bill will do, is completely undermine that process and the meaningful engagement that we expected to have, because it means that the UK Government has the power to impose certain measures or restrictions on devolved Governments. Common frameworks were a collaborative approach that was built on the basis of parity and respect for devolution.

As it stands, the 2020 act’s market access principles would, in many if not most circumstances, undermine any policy divergence agreed in common frameworks. The process has been developed to ensure that policy divergence agreed in common frameworks is protected from the 2020 act’s market access principles. UK ministers confirmed that in a statement to the UK Parliament on 9 December. That process reflects commitments that were made by UK ministers during the bill’s passage in December 2020. Through a common framework, the UK Government committed to using the powers that the act confers on UK ministers to exclude that policy area from the effect of the act.

It is vital that UK ministers honour that commitment consistently, because the sustainability and viability of the framework process relies on that. These pieces of legislation are frustrating because, as a member of the EU, we were able to develop and tailor our policies to our needs through the principle of subsidiarity. This is a backwards step that undermines our power to set our policies based on what best meets the needs of the people of Scotland.

There are specific concerns in some areas. As we have gone through the process, those policy areas have gradually started to emerge. I remember discussing the food and feed safety and hygiene framework, which I mentioned earlier, at a previous appearance at the Health and Sport Committee. Discussions were held in relation to the framework and a potential divergence in policy on genetically modified organisms. That could be impacted.

Other areas are emerging, too. If it would be helpful, I would be happy to follow that up with the committee and outline current areas of concern in relation to the internal market act. One of the key concerns in relation to agriculture is the Subsidy Control Bill, which you said we will come on to, given that it is working its way through the UK Parliament.

Absolutely. You made an important point on the portrayal of a lot of jobs as “low skilled”. I refuse to use that term because—you are absolutely right—those jobs are highly skilled, and it does not help to portray them in such a light.

What I outlined and announced yesterday was on the back of the Migration Advisory Committee’s recommendation to develop a pilot scheme on rural migration. In February last year, our expert advisory group on migration and population published a report on options that could be explored when developing the visa pilot scheme. Three potential options were outlined in the report.

In looking at options, it is not as though we are doing something completely new. Different schemes are currently in operation throughout the world, and there are many different examples that we can learn from.

For example, one of the three potential options that are outlined in the report is a remote and rural partnership scheme, which is modelled on the Canadian Atlantic pilot scheme. Such a scheme would be employment based and would be part of a wider partnership with local authorities, employers, public services and the voluntary sector, which would play a more active role in identifying which areas and employers would benefit the most from the scheme, and would be engaged in delivering an integration plan. There are also proposals for a Scottish visa that look at how we can expand the skilled worker route.

We are keen to work with the UK Government in, I hope, delivering much of that. The previous Home Secretary had been willing to commit to that, so we hope that that commitment is delivered in full and that we get the support to continue that work. It is certainly the case that we are not standing still on the matter. We have lots of different ideas about how such schemes can work in Scotland’s best interests. I put forward just some of those ideas yesterday.

No, those proposals do not work. That has probably been shown by the numbers of people who have taken up some of those initiatives. We can look at this the opposite way round, and this is part of the problem with the visas that were given for certain occupations a few months ago. The visa for butchers, for example, was for about six months. Who is going to uproot their life for such a short period of time knowing that there is no opportunity to stay on beyond that period? That is essentially what we are asking people to do—to uproot their lives and move to another country. I do not think that a lot of people would find that to be worth their while for such a short window of time.

Some of the initiatives were for a few months only. When we analysed the time that somebody would be able to spend in the country by the time their visa application had been processed, we saw that it was somewhere in the region of six to eight weeks for some of the occupations for which three-month visas were proposed. Those are all short-term ideas that do not go anywhere near to addressing the crises that a lot of these industries face.

I know that a lot of sectors feel that there have been specific exemptions, such as for butchers, but those exemptions have not been applied to other sectors that are also facing critical shortages. That has caused a lot of concern.

There are a lot of outstanding issues. That is why we repeatedly call for these issues to be addressed. As we announced yesterday, some of the pilot work that we are trying to do ourselves is looking to address these issues in the medium or longer term. We want to work with the UK Government on solutions, but it takes both of us to be willing to look at them and to engage meaningfully. We are certainly willing to do that.

I do not think that there is any question that those issues might have been exacerbated by Brexit because it absolutely has exacerbated them.

You spoke about depopulation of some of our rural areas and islands. We have spoken in previous meetings about initiatives such as the islands bonds, the rural and islands housing plan and the investment in connectivity, and they are vital in trying to address the endemic issues that we face in those areas.

I engage with our stakeholders. I go out to speak with our farmers, our fishers and our food and drink businesses, and all I am saying to you is exactly what is being said to me about the availability of labour. At some point before Christmas, the Prime Minister was quite insulting when he said that all the jobs are low paid and people need to improve their working conditions, as if that would solve all the problems, which is not the case. It did not matter how much some of those businesses were offering; they were just not able to attract people to fill the positions.

We really need some meaningful interventions to address these critical issues in the immediate term. That is why we have repeatedly called for a number of different initiatives and for meaningful engagement from the United Kingdom to address some of these problems.

The measures that are proposed in the bill will have a significant impact as they stand. As I have said, the maximum number of animals that can be imported will be five per vehicle, which is already a significant change. Again, though, we are in constant discussion with animal welfare organisations; indeed, I am due to meet the Dogs Trust, and I will, no doubt, have that conversation with it. It is important to have that discussion with such organisations, and then discuss with other Administrations the question whether further amendment is needed. Obviously, I am more than happy to have the discussion and to consider the matter fully.