Seòmar agus comataidhean

That has been one of the interesting issues during this process and in the discussions on the bill. Department for Environment, Food and Rural Affairs analysis estimates that the impact on business would be in the region of £200,000. One positive thing about the bill is that it not only covers shark fins but prohibits the import of products that contain shark fins, such as tinned shark fin soup. It encompasses those products.

Discussions between the UK Government and the Scottish Government on retained EU law are on-going. We had a meeting with the UK Government and the other devolved Administrations at the start of the week. Retained EU law is an on-going issue, and we continue to have those discussions to see what the impacts will be. I have not raised the member’s specific point, which relates to the Shark Fins Bill. As I said, it is an on-going process.

Active shark finning has been banned in the UK since 2003, and we have a “fins naturally attached” policy in relation to that. Throughout that time, the personal import of shark fins has still been permitted. There has a been a 20kg allowance in relation to imports, and that is what the bill will draw to an end. We do not think that there has been a tremendous amount of trade in that time. As far as I am aware, since 2017, across the UK there has been much movement, but it is important that the loophole is closed, which is exactly what the bill seeks to do.

On your second point, there are some exemptions in the bill, but they apply only in cases when the act of importing a product that contains shark fins or a shark fin is for the benefit of conservation of the species. That is the only case in which such products would be permitted to enter the country.

Absolutely. As I have said, we are trying to provide as much clarity, certainty and stability as possible, recognising the turbulence and challenges that businesses are facing. We know that those pressures are acute in our agriculture sector, for all the reasons that we have talked about. We have brought forward payments—we have made them at their earliest-ever stage—to help with cash flow, which we know has been an issue. We will continue to provide that stability over the coming financial year.

I have talked about the funding that we have already paid out through the basic payment scheme for greening. More than £424 million has been allocated towards that. The £65.5 million that we are getting out the door in LFASS payments has also been mentioned.

Let us look at the coming financial year and the budgets that we have in place. You touched on crofting. It is really important to mention some of the schemes that we continue to fund and look at. Our cash injections will help those communities. We have the croft house grant scheme and the crofting agricultural grant scheme. We have also provided extra funding to the Crofting Commission to deal with some of the particular crofting issues that we are aware of.

That is how we intend to provide support, and as much stability and clarity as we can, at a really challenging time.

I absolutely agree. To be honest, if I could put a lot more into that capital scheme, I would. However, I have outlined in my previous responses the challenges with regard to our capital budget. We have not seen the replacement funding come through, which has made things particularly challenging.

The first round of the sustainable agricultural capital grant scheme was very popular. However, as we received reduced capital allocations, we had to target that scheme where we thought that we would have the most effect, which is why we focused it on those elements, in particular, and why we are looking to fund those pieces of equipment that we know will have the biggest impact.

Of course, I would always welcome more funding and a bigger capital allocation, because we would then be able to do more. As it stands, with the budget that I have, and in relation to capital, we have to use and target that in the best way that we can.

I would not say that it has all gone wrong. As I said, we are still waiting for the final figures for that. Of course, I will be happy to keep the committee updated on those. We are keen to get that feedback, too. We have the funding there, and we want as high an uptake as possible and for people to be engaged. We have worked extensively on communications, contacting farmers directly to let them know about—

Those issues have been really important parts of the discussions. Somebody could tick a box to say that they have done that test but, as George said, what they do with the information that they have is really important. That is where those services will be vital.

I am happy to do that. As I said, our forecast spend on that is £2 million, so we expect that uptake to increase. I am happy to come back to the committee with further information.

It probably is not too much of a simple answer. All members of the committee will be aware of the impact—which we all see, across our constituencies—that the cost crisis is having on our communities, particularly the rural and island communities that members represent. The impact that that has had on our budget is huge. As I said in my opening statement, how we then allocate between our different priorities is an increasingly difficult challenge as our budgets become more stretched.

Let us look at the overall figures and some of what we are dealing with here. We had an increase in overall funding of £1.7 billion from the Barnett funding, but, when we look at what that means in real terms, we are actually seeing a reduction of 4.8 per cent since 2021. That means that there is huge pressure not just on my budget and what I am able to do across the rural and islands portfolio, but right across the Scottish Government.

Looking particularly at my portfolio and what that equates to, since we left the European Union, we have seen the EU replacement funding fall by 1.7 per cent over this past year since the start of 2022-23. However, that has decreased by 12.7 per cent since 2021, so obviously we do not have the spending power that we would previously have had. All of that has an impact.

As I said in my opening statement, those are the priorities that I set out to the committee in October and what we continue to provide in relation to that cash injection of £650 million, which impacts our agriculture and marine. Maintaining those payments is absolutely vital in trying to provide some of that stability too.

Thank you very much, convener. When I appeared before the committee in October, I set out the priorities for the rural affairs and islands portfolio, and I am pleased to come back today to set out how the 2023-24 Scottish budget, presented by the Deputy First Minister to Parliament in December, supports those priorities.

The budget takes place in the most turbulent economic and financial context that most people can remember. It therefore demands a response from Government that supports the most vulnerable and, ultimately, helps to build a sustainable economy. That is why we have chosen a progressive path for this budget, investing in our people, our economy and our public services. The resource and capital spending reviews set out, as best we could at the time, the spending priorities of the Government and the high-level financial parameters for portfolio envelopes. However, a lot has changed in the months since those reviews were published. We have had two fiscal events from the United Kingdom Government, which have both had a direct impact on Scotland and its economy. The autumn statement in November fell short of the interventions that Scotland needs to guide us through this cost crisis. That means that we continue to feel the impacts of the most severe economic upheaval in our generation, and we will continue to do so for some time.

Despite that, our spending reviews, our programme for government, the emergency budget review and the 2023-24 budget all show that this Government is determined to act. We are focused on eradicating child poverty, creating sustainable public services and transforming our economy to net zero. We do not view those as three competing objectives; we view them as priorities that are linked. Although it is true that the Government has not been able to do everything that we would have wanted to do at the pace that we would have wanted, we have taken action to support those priorities.

In relation to the rural affairs and islands budget, the spend of the portfolio supports some of our most fragile communities, businesses and sectors at a time when they are feeling the effects of multiple shocks: Brexit, recovering from the pandemic and, of course, dealing with the significant challenges of the cost crisis.

As I did in 2022-23, I will prioritise the direct cash injection that my portfolio makes in rural and island areas and across the agriculture and marine sectors. Some £650 million will continue to be invested across those sectors, providing much-needed economic stability. Our commitment to supporting the ambitions for our islands has been strong, with £8.5 million allocated from the portfolio for the islands programme and the carbon neutral islands project.

We are living in a global climate and nature emergency, with climate change and a loss of biodiversity among the greatest threats faced by people and our planet, so we are dedicated to our critical work with the agriculture sector to co-develop and deliver on our vision for agriculture, which includes an investment of more than £44 million over 2023-24 to help Scotland become a global leader in sustainable and regenerative agriculture. We are also delivering a new round of agri-environment support, with more than £36 million of planned investment over the coming year.

The blue economy vision for Scotland sets out the long-term outcomes that we want to see for our marine environment, our people and our economy. That work, together with the £14 million increase in Marine Scotland’s budget, is representative of this Government’s commitment to net zero and to enhancing biodiversity through the expansion of offshore renewables, climate-related research and environmental protection.

We are, of course, living in extremely difficult times, and, as we look ahead, there are still many challenges to overcome. That makes the budget and allocating funding between priorities extremely and increasingly difficult, but I am confident that the balance that the Government has achieved is the right one, and I will continue working across the Scottish Government and with our partners across Scotland to deliver for our rural, coastal and island communities.

I am happy to take any questions that the committee might have.