 Abelai learntorol wrth fy差不多ig eu pryd daith disturbsyr. Fe gennym nhw, maith hwy. Gwybod phobetiaeth omn amaudnder mewn dwyclissu uwchglig o fewn pol ulinst. Rwygo fel darlingu'r awes oes elaboratei yn ceisio i fuselwyr ym Mhye indysgwys at benefited Coronavirus Garlic orgym disgrёл y drafft ddaf, ac rydych nhw yn ceisio i fuselwyr y berthiff textingol ym Mhye indysgwys ym Mhye. Yr next item of business is to take evidence from the Cabinet Secretary on Animal Health and Welfare Scotland Act 2006, consequential provisions order 2022. This instrument is subject to the affirmative procedure and refer members to page 1 and page 4. I welcome Mary Gougeon, the Cabinet Secretary for Rural Affairs, Nylans and our officials for this agenda item. We have Fiona Eadie, the Deputy Head of Animal Welfare Policy and Grant McLarty, Solicitor from the Scottish Government. I invite the cabinet secretary to make an opening statement. I'm happy to appear before the committee today to discuss the consequential provisions order. As the consequential amendments in the order aren't contentious and they seek to tidy up existing legislation, I don't intend to address the committee for very long today. The order being considered by the committee today seeks to amend and repeal primary legislation and amend and revoke secondary legislation. The changes that the order delivers are consequential to the animal welfare licensing of activities involving animal Scotland regulations 2021 and provisions of the Animal Health and Welfare Scotland Act 2006, which I'll refer to as the 2006 act, which were commenced last year by way of a commencement order. Both the licensing regulations and the relevant provisions of the 2006 act came into force on 21 September last year. The order ensures that existing legislation reflects the recent changes and where appropriate substitutes references to now revoked or repealed legislation with references to the licensing regulations. I would take this opportunity to highlight that it wasn't appropriate to bring the provisions of the 2006 act, which repeal various acts of Parliament into force until making of the new animal licensing regulations. With the coming into force of the licensing regulations, we would be able to then commence those provisions of the 2006 act in order to repeal the enactments as they were then superseded by the licensing regulations. With those enactments now repealed and new provision now made in the form of the licensing regulations, the order will make sure that the statute book is updated accordingly. I would just end my remarks there, convener. Any questions from members? No. We now move on to agenda item 3, which is the formal consideration of the motion to approve the instrument. I invite Ms Goujom to move motion S6M-04393. I move that the Animal Health and Welfare Scotland Act 2006 consequential provisions order 2022 be approved. Does any member wish to debate the motion? No. Is the committee content to recommend approval of this instrument? Content. Finally, is the committee content to delegate authority to me to sign off our report on our deliberations of this affirmative SSI? That completes consideration of the affirmative instrument. I thank the cabinet secretary and her officials for attending today. Our next item for consideration is consideration of the non-commercial movement of Pet Animals Scotland amendments regulation 2022, which is SSI 2022-131. The instrument is subject to the negative procedure and I refer members to paper 2 on page 8. Does any member have any comments on this instrument? I have one slight concern and I know that it is touched on in point 7 of the papers regarding the ELISA test as opposed to the other test, which takes longer. I just like some clarification that the Government is content that we are not at any greater risk from rabies coming into the country by using the shorter timescale test that is currently being used for animals coming from Ukraine. Okay. We could certainly write to Beatrice. I would be interested to know, convener, who would be responsible for paying for the extra test. That's fine. We can certainly write to the cabinet secretary for clarification on those points. Any other comments? No, thank you. I will now briefly suspend until I allow our next set of witnesses to join the meeting. We now move on to agenda item 5, which is an evidence session on the impact of EU exit on the rural affairs and island remit. Members will recall that the committee took evidence from the cabinet secretary on the subject on 12 January 2022. We agreed that it would be helpful to also take evidence from the UK Government on the same issues. This morning, I welcome George Eustace, Secretary of State for Environment, Food and Rural Affairs. I would like to invite the Secretary of State to make an opening statement. Thank you, convener. It's a pleasure to be with you today. Obviously, there are a number of issues at the moment that we are all grappling with, particularly in the context of the Russian invasion of Ukraine, which has caused some turbulence on global markets, particularly on the gas price. That has had an impact on fertiliser prices as well as on farm input costs. Things seem to be settling down a little bit in the sense that gas prices have eased back and the price of fertiliser has fallen back from its peak of around £1,000 to a little over £600 per ton now. Some farmers are starting to buy at that level, but it's still a much higher level than they're previously used to. In the context of overall EU exit, which I know is the topic that you are looking at, all of the administrations of the UK are progressing their own plans for post-Brexit agriculture policy. There are a lot of similarities between what different parts of the UK are doing, but yesterday I had a briefing from the Scottish Government and our joint ministerial committee on their own plans. I know that they envisaged there being really three strands to the payment, a base payment that would be quite similar to the existing BPS payment, area payment, direct payment to farmers, and then an enhanced payment for farmers that do additional things, which would probably be akin to the greeting payments that they used to be under the EU scheme, but with more ambition within those, and then some elective payments at the other end, which are for land use change and tree planting and peatland restoration. In England, we've also got three strands, which have got some similarities, although we're less wedded to an area of direct payment and looking instead at payment for the things that farmers do. Northern Ireland and Wales are developing their own proposals, which have also got some similarities. There's quite a convergence, I would say, across the UK about the objectives of our future agriculture policy, all of them focusing very much on helping to support farming comes and also to support farm profitability, but also very much focused on some of those environmental outcomes that we're all striving towards. We're now going to move to questions. It's my understanding that there's 106 common frameworks developed between the four UK Administrations. Eight of those common frameworks falls within the remit of this committee. To date, the interactions of the common frameworks within the UK internal market hasn't been clear, and as a committee, we've certainly had issues with what role parliamentarians have within those negotiations and future decision making. Specifically, I would like to ask you whether common frameworks will enable Scottish policy divergence within the UK internal market and specifically about the interactions between agriculture support frameworks and the subsidy control act 2022 and whether that will have a longer-term impact on Scottish ministers' ability to make agricultural policy. Well, agricultural policy is devolved, and under our constitution, we don't have a federal system of government in the UK. It's a devolved system, and what that means fundamentally is that powers are either in the final analysis, either devolved or reserved, as you'll know. What we seek to do with the common frameworks, therefore, is not to try and create some federal system for collectively agreeing things, but they're really a framework for co-operation. There are areas, for instance, licensing of foreign fishing vessels coming into UK waters, where it actually makes sense to act in unison together. Often, when it comes to things like pesticide assessments and pesticide authorisations, again, sometimes authorities will act together, that the Food Standards Agency in England and Wales and Food Standards Scotland will also often co-operate and act in unison. The concept of co-operating to do things jointly where it makes sense is not a new one, but it doesn't affect the ultimate shape of the devolved settlement. What we have with these common frameworks is a framework in which we can discuss and try to agree things where it makes sense to work together, even though they are devolved. It looks at things like food standards, chemicals and pesticides, fisheries management, as I mentioned, and then a range of others as well. You mentioned the subsidy control bill. We did look at whether there should be a specific carve-out for agriculture, but we felt in the end that it was unnecessary because there are other de minimis exemptions on payments and other exemptions and measures that we have, which mean that we don't see that subsidy control regime standing in the way of anything that we might want to do in agriculture. We have also taken our share of the so-called AMS envelope, the AMBA box, if you like it, at the WTO, and that equates to around about £3.5 billion per year if we want it. Long before that became a constraint on how we might spend agriculture policy, we would probably find that we just didn't have the budget anyway, because, of course, between all of us, it's around £3 billion a year for all parts of the UK combined. I don't see the subsidy control bill as standing in the way, because it's only really where you get to payments well over several hundred thousand pounds to an individual farm that you start to even engage the process, and even then, there are quite a lot of exemptions. Okay, thank you. Jim Fairlie. Thank you very much, convener, and thank you, Mr Eustace, for your answers. We're very constrained for time. I had a plan to give you a chapter inverse of some of the committees that have been taken evidence on the subsidy control bill in the UK Internal Market Act, but I will cite Johnnie Hall, who sat in the SEAC committee earlier at the tail end of last year. Mr Hall made the statement that the UK Internal Market Act drove a horse and carriages through the common frameworks. My question to you is why you're not sticking to the principles of the common frameworks instead of driving a coach in horses through the principles of the UK Internal Market Act, and you are constraining the Scottish Government's ability to support agriculture with the subsidy control bill and the basis that if we have policies that are strictly designed for Scottish issues up here, the UK Government can override them if you feel the UK Government feels that they go against principles of what you are trying to do down in England. Is that not correct? No, I don't think that that's correct at all. The UK Internal Market Act protects the UK Internal Market in much the same way that when we are all EU members the EU law protected the single market. The principle in the single market in the EU was that something that is lawful and can be produced in one part of the European Union could be sold anywhere in the European Union. You weren't able to put barriers in, and famously on things like genetically modified crops, it was possible for individual countries to decide not to allow their cultivation, but it wasn't possible if something was authorised for sale. It wasn't possible for any part of the EU to ban their sale. The UK Internal Market Act is really taking that same principle. It just means that different parts of the UK can pursue different policies within the devolved framework that we've got, but they're not able to put a ban on sale of goods in different parts of the UK unless there was a specific agreement to enable that to happen. I don't think that it affects the common frameworks, because the common frameworks deal with issues such as vessel licensing, where often it just makes sense for us to issue one licence to an EU vessel coming into our waters rather than having to issue them with two or three different licenses. It's really just the basis on which we can cooperate and it doesn't affect that. The subsidy control bill, as I said, there are such generous exemptions there that I don't think it's going to cause any trouble for any of the sort of policy plans that Scotland has. The Scottish Government has plans to have direct payments made to farmers on the basis of food production. We also have hog payments up here, we have LFA payments up here, none of which you have in England. If you start getting lobbying from farmers down in England saying that this is a direct support that is causing us problems in our marketplace, you have the power to be able to require the Scottish Government to take away that subsidy. No, it's devolved. We don't, unless we're exceeding or breaching anything in the subsidy control bill. In an extreme example, if you had a small farmer with £300 sheep and you were paying him a subsidy of £1,000 per sheep, if that were what, in an extreme example where you wanted to do, well, at that point, if you were paying, I think, over £300,000 to an individual farmer, then it might engage and there might be some issues around the single market, but it's not around the internal market. I really don't see any issues with any of the direct payments that Scotland wants to make. They'll be well within the parameters of that bill. Of course, Scotland will have far more freedom than it ever would have had as an EU member. We had to argue, in a tooth and nail, to try to get a modest couple's payment for Scottish sheep farmers, for instance. It was very, very difficult to achieve. Scotland and England in every part of the UK used to face relentless problems with disallowance penalties and fines for not doing things in a particular way. None of that will be an issue anymore. So, there'll be considerably more freedom for the Scottish Government to pursue its own policy that works for its own farmers. I'm hearing the words, but we'll wait to see the actions. Thank you, Mr Eustace. Thank you, convener, and thank you, Mr Eustace, for joining us today. I'd just like to expand on the points that my colleague Mr Fairlie was making. I sit on the Constitution, Europe External Affairs and Culture Committee, and we took evidence from Dr MacCork and Dale, who suggested that there are two important constitutional considerations arising from the subsidy control bill. First, there are additional powers by which the UK Government might intervene with regard to the exercise of executive power by Scottish ministers. For example, by calling in subsidies or referring them to the Competition and Marketing Authority. But the Scottish ministers and other devolved powers don't have the equivalent powers. Secondly, it's the extent to which the bill constrains the scope of existing and future devolved executive power. I'd just like you to comment on Dr MacCork and Dale's findings. Yes, as I said, when we were all members of the European Union, there was a state aid regime there, and so that constrained, even then, what we were able to do if we wanted to support a large steel plant and so on. The UK subsidy control regime really just, it's got differences, but in many ways it's a much looser regime than the EU regime that we all were used to, but the principles are the same. There are de minimis exemptions, things that enable you to do, grant in aid and so on for businesses. It's only really when you get to very large payments that are really judged as market distortions that it's engaged at all. I don't see it as breaching any particular principle because it's a more permissive regime than we had in the European Union, and ultimately it means that the Scottish Government now has more power than it ever had while we were in the European Union. Again, as Mr Fairlie said, we'll wait and see how it turns out. I'd like to turn to the common frameworks and again evidence that SEAC took. One of the key elements of evidence that came in from our inquiry was the extent to which the risk of the shift towards intergovernmental working may result in reduced democratic oversight of the executive and a less consultative policy making process. Professor Nicola McEwen noted that parliamentary committees in every UK legislator have called for greater transparency and greater oversight, not least in light of the increased importance in the context of Brexit and Covid. I'm interested to know how you plan to engage more with the parliamentary legislators when you're coming up with new policies and new ways of working. On the common frameworks, we've been working on them for a very long time at official level. Of course, despite all of our, often we have political differences in different parts of the UK, but we do across GB have a single civil service. That provides quite a lot of important glue, if you like, that holds things together. At official level, civil servants in the Scottish Government and the Welsh Government and the UK Government have been working very closely on a lot of these quite technical issues around vessel licensing and how we approach food, compositional standards and so on to try to co-ordinate things, but none of these common frameworks cut across the devolution settlement because, as I said, we don't have a federal system of government in the UK and, rightly so, it wouldn't work given the different sizes of the respective parts of the UK. We have a devolution settlement and that means that we try to work together as a happy family, and that's what the common frameworks are about. It's about trying to co-ordinate and bring things together when we're able to and when we're able to agree, but in the final analysis, if we disagree on anything, well then something is either a reserved function and it's for the UK Government or it's a devolved function and it's for the devolved administrations and that's the nature of our constitution and there's nothing in the frameworks that cuts across that. Okay, if I may just finally, I think it's fair to say that the SEAC committee recognised that there are significant differences between the market access principles within UKIMA and within the EU single market, in particular the list of exclusions on public interest grounds from the application of mutual recognition principle are much narrower within UKIMA. So I think there are differences which do impact on devolved competencies. I think also another area that we took evidence on as well is with regard to stakeholders of various changes in legislation. Out with parliaments, so for example Scottish Environment Link said that from their view there'd been little to no stakeholder engagement on any environmental common frameworks and we got something similar from NFU Scotland who said they've not been entirely cited. So I'd just like to ask you for your thoughts on how we can ensure as legislators across the United Kingdom that we are engaging stakeholders who have got absolutely appropriate evidence and views on how we move forward in our current post-EU exit circumstances. I do understand that point and look I think what it really underlines is the importance of committees like yours and the importance for ministers like me in the UK government to come and give evidence to your committee and also the EFRA committee that we have in the UK Parliament as well. I was in fact started when I was first elected as a member of the EFRA committee. So committees like yours have a really important scrutiny role and an important role in marshalling evidence from other experts and making sure that's brought before government and that governments both in Scotland and in the UK have to have to respond to that and address these concerns when they're made. We regularly have reports from the EFRA select committee in Westminster that we respond to and of course if we have legislative changes then we do a wider public consultation and we've done that on all of the areas where we've made significant policy changes and we'll also have if we need secondary legislation to change of course you know we need to bring that legislation through the SI committees that we have as well. So I think there are many many opportunities for engagement both from external academics and stakeholders but also elected representatives too. I just finally say that I welcome that comment but also make a plea that you understand that the Scottish Parliament also has procedures so late laying of SI's impact on the ability of the Scottish Parliament and this committee to scrutinise new legislation being brought in by Westminster. Thank you. Yes I do fully understand that and in fact when you know when officials are discussing you know with their counterparts in you know Wales you know and Scotland and sometimes Northern Ireland as well you know we always have to be very cognisant of different procedures that pertain in different assemblies and often that does affect the time scales and the timings you know within which we can introduce changes. Thank you. Good morning Mr Eustace. You've said this morning that there will be more freedom for Scotland and that our committee has an important scrutiny role. The Scotland Act clearly states that protecting Scotland's environment is a devolved matter and a core responsibility of the Scottish Government. Yet your Government's internal market act has repeatedly prevented this Parliament and its committees from doing their job to protect our environment from approving the introduction of GM crops to the UK market to preventing us implementing the ban on plastic wet wipes. The internal market act has allowed you to repeatedly overrule us. Mr Eustace, why does your Government have such a blatant disregard for devolution? I don't agree with the claim that you've made on two fronts. First of all it is the case that every part of the UK are bringing forward new bans for instance on some single use plastics and it is the case that Scotland in terms of its timescale had been a few months ahead of Wales and Wales had been one or two months ahead of England in terms of the parliamentary timetable to make that change. The Scottish Government therefore approached us and said they didn't want to delay that introduction of that ban. They wanted to go slightly ahead of us and we agreed that we were all heading in the same direction. That's no problem. And so we did what I think is a sensible thing in such a circumstance which is to say you can ban the sale of those items sooner. There's nothing though in the UK internal market act that that constrains in any way the type of policies that Scotland is now exploring when it comes to agriculture policy. So their agri-environment schemes, those enhanced environmental requirements, the elective payments that they're proposing for woodlands creation and peatland restoration, those are all very much policies that Scotland can design but they would have had far less freedom to do so in the EU because there would have been a much more limited pillar to budget to spend and there would have been lots and lots of auditing requirements around the way they spend the money on the direct payments. So there's much more freedom for Scotland now to pursue its environmental ambitions and where there are issues that arise in terms of banning sales, we've been quite, I would argue, very constructive in dealing with that. My final point I'd make is on GM crops, even when we're all in the European Union, you have to understand how the system works and that is that the European Union would authorise GM crops for cultivation, that was their decision and it was dealt with by their committee. Once something was authorised it was unlawful for any part of the European Union, whether UK or Scotland, unlawful for them to prevent the sale of those GM crops or food produced from those GM crops if they were judged safe. But what every part of the EU was allowed to do and including Scotland using its devolved powers, it was allowed to ban the cultivation of GM crops and there's nothing that we are proposing that would change that. Scotland would be free to ban the cultivation of crops but it wouldn't for instance be able to ban the sale of a loaf of bread that might have used a GM grain that had been authorised as safe and that was the same in the European Union so there's nothing new in that. Karen Adam. Thank you convener and good morning Mr Eustace. Can I raise with you a matter with regard to fishing which is a key sector in my own constituency and that whilst the Westminster Government promised radical reforms to help the industry take back control of UK waters and increase quota shares all while minimising trade impacts this is starkly at odds with the reality of what has been achieved. The mood on the ground to be honest is not good conversations I've had with key sector leaders regularly include the words such as betrayal and the breaking of promises and these are commonplace. Our fishing industry has become particularly vocal about the contrast between what they were promised and what an actual existing Brexit looks like for them. For example the national federation of fishermen's organisations estimates the industry to be £300 million worse off by 2026 than without Brexit. What engagement have you had with the Scottish Government and what support can the UK Government give to our industry to manage the consequences of this EU exit? Yes, I regularly meet fishing leaders and in fact a little under two weeks ago I met elsewhere from Donald from the SFF and some other Scottish representatives as well and obviously prior to being Secretary of State I was the fisheries minister for some time. I think what I would say is I've always been honest that in order to get the trade incorporation agreement and the tariff free trade that we wanted in the event, yes compromises were made and that meant that the settlement we reached on fisheries didn't have everything that fishing leaders would have wanted. I do understand that but it's also important to recognise what we did achieve and that was we do have that tariff free access to the EU market which is an important export market and that's particularly important for the Scottish salmon industry and in fact when I've talked to representatives from the Scottish salmon industry despite the early teething problems on some of the export paperwork which we're very familiar with and you will be on your committee too. In fact Scottish salmon exports to the European Union grew in the first year that we left the European Union which is a good sign that that industry is in good health and is continuing to thrive and seeing its exports grow. Now then on the catching sector yes they didn't get as much additional fish as they would like but the agreement does require the European Union to forfeit about a quarter of the quota that it had as the price for having continued access in UK waters and what that means particularly significant for the pelagic sector in Scotland they've done quite well out of that. In the first year 15 per cent of that 25 per cent quota was transferred and although it's not as much additional quota as the fishing industry would have liked it is you know it is a significant boost and there is more to come and the other thing I'd say is fishing leaders and fishermen were you know quite apprehensive during the Covid crisis because a lot of their market is in the service trade and restaurants that was in a very difficult stage and prices went down but we've seen a very strong recovery in fish prices over the last six months so generally when I've spoken to to fishermen more recently both in Scotland and elsewhere they've been much happier actually than they were say a year ago because things are back in a reasonably good place but I do recognise that they would have liked you know more quota under the agreement that we reached but we had to obviously make compromises in order to get that tariff free access could I just come back then can I ask what engagement you have had with the Scottish government in this regards and you know what support practical support is the UK government given to the fishing industry to get over this period as you say some things are looking better but that's in regards to you know a very low bar it's not from where it started we're still not back to where things were and where things were were promised that they were going to be and you know there's certainly the engagements that I've had they certainly aren't seen it picking up and being as positive as yourself at this time so I would just really like to know you know what what engagement have you had with the Scottish government is there into that interaction and what practical support can you give yes we work very very closely with the Scottish government because of course half of the UK fishing industry or thereby is based in Scotland and you've got the you know the really those important centres like like you know Peterhead which are you know the centre of the UK fishing industry and we've always had an approach you know on our international negotiations although that is a a reserved competence we have always had an approach of taking both officials and ministers as part of our you know delegation in those in those annual fisheries negotiations that that continue so so there will be officials from the Scottish government it used to be somebody called Alan gear but I'm not sure if he's still in place but he was one of the lead fisheries negotiators in the Scottish government he will actually attend alongside our own UK officials when we enter dialogue and discussions with the pharaohs or with Norway or with the EU so we worked very much in unison with the Scottish government given the the interests that the Scottish industry has in some of those international negotiations and I would say that you know the additional quota I mentioned it's 15% extra that that roughly equates to last year an extra 40 million pounds worth of a fish that the Scottish industry specifically had as a result of us leaving the EU thank you I'm aware we're pressed for time so i'll be there thank you thank you merseries valalba thank you convener good morning secretary thank you for coming I'd like to start by just following up on the question there from Karen adam about the practical support that the UK government could be providing so you'll be aware that creeled live nephrops are an important export for Scotland's coastal fishery and you may also have heard that the national coordinator of the Scottish Creel Fishermen's Federation has reported that post braxit export difficulties have added £2.50 in cost to every kilo that they export so can you tell us given that the UK government has invested in support schemes such as the UK seafood fund what does the UK government plan to do or is currently doing to help to allay these costs and to protect low impact fisheries so the first thing is we do have a number of grant schemes that we make available so there is a there's a UK a sort of seafood fund which is the the residual elements if you like of the old emff European fund and Scotland receives £14 million out of that and the Scottish government can can administer those grants and they tend to be used for things like investing in more selective gear types that are better for have less environmental impact but they can also be used for infrastructure and investment as well particularly in imports we've also then in addition to that got a £100 million UK seafood fund and that is going to support science so that we can support joint fisheries science between fisheries agencies and the fishing industry so there's going to be a new UK fisheries science partnership but also the lion's share of it the largest part will go on infrastructure particularly around ports and then there's some as well for training so we've got some grant in aid to support the industry but on your specific issue around export costs the the principal cost that they would have is is the the requirement for an export health certificate and the the cost of those varies depending on the size of the consignment so if a large pelagic producer is sending an articulated load of mackerel well then the cost of the export health certificate is fairly modest in the scheme of things and the same would be true as well for a lorry load of salmon where it gets complicated is when you've got much smaller consignments of more niche products and you might need several export health certificates on one lorry and we do recognise that that makes those trades you know more expensive because the cost of an export health certificate well it's typically in the range of 70 to 200 pounds per certificate because you need to get somebody to to do the work and sign it off so that does add cost depending on the size of the consignment what we are hoping to do to address that is we've been doing some very comprehensive work on a digital solution so that when somebody dispatches goods it automatically generates a pre-populated export health certificate that a vet can then effectively attest and it speeds up the paperwork and reduces that cost significantly and we hope as well at some point to be able to enter a sensible dialogue you know with the European Union about whether a veterinary certificate a veterinary science certificate is actually necessary and appropriate in all circumstances we actually think you know there could be you know times when you could have a a different paraprofessional that could sign that off or indeed you know a food business operator could be accredited as as a trusted trader to be able to accredit their own goods and I think there's no reason there's no there's no sort of food safety reason why that shouldn't happen but obviously to get to that final step it would require us to get some sensible engagement with the European Union through the specialized committees thank you for that response I look forward to seeing how that this digital solution progresses moving on just one more further question the Scottish Government's proposed future catching policy plans to deviate from UK and EU law in terms of unilaterally permitting discarding I'm interested to hear secretary of state's view on this proposal and the potential impact it will have on fishers across the UK well look we are also um we're looking at the issue of the um the landing obligation that we that we all inherited from the European Union and they themselves are looking at it because in in practice it has been you know it's something of a challenge of making it work in in practice I think it's fair to say um and um the intention had been that you'd have de minimis exemptions into species flexibility and so on to make it work but there are still choke species that become you know quite problematic we want to work with the Scottish Government on this in terms of the scope of what they can do well it really will depend on the extent to which some of these issues might be resolved by international agreement between the UK and the EU and obviously we would involve Scotland in that proposal but when you are discussing your approach to quotas with neighbours whether that's Norway or Faro's or the European Union this is an area where you might want a common understanding and it might be a feature of international agreement that for instance we could at some point consider cameras on vessels what's called remote electronic monitoring it's been well trialled and it's actually quite successful where it's used and if we were to do that then obviously that would apply to all all vessels through under that international agreement but then there will be other you know technical conservation type measures that are you know for Scotland to to decide and it would be open to them to take a slightly different position what we're doing in England is very much exploring options around a catch quota type system so that you're you're not just targeting the discards you're trying to to account for all catches and trying to reduce your you know your discards by focusing on a catch quota system and we're also exploring areas as we outlined in our white paper about whether we could have some kind of national quota reserve that could that could account for out of quota stocks so that people could could land them maybe it would be subject to some sort of super levy or other but they could land land them rather than happen to discard them so it's a complex area but we very much hope to work you know with our with our colleagues in scotland on a joint approach in some of these areas just before we move on to their next theme in april of this year the UK government announced details of the share prosperity fund and I understand that it's in the region of our 212 million pounds available in 22, 23 and 24, 25. Can you give us an idea of how much of that fund will be directed towards the rural affairs remit and how is that going to be targeted? Cymru, I think it will come down to really what the Scottish Government wants to do with that funding. I've also had some experience of this because as a representative for a constituency in Cornwall Cornwall also used to be a beneficiary of EU structural funds because of its low GVA per capita and it's also going to be quite a significant beneficiary of the shared prosperity fund for that reason but I know that the government's intention here is very much that there'll be fewer constraints on how that money can be spent and so the EU structural funds, the ERDF fund held that you couldn't really use that money on harbours or ports or even some other sectors like tourism you know on the basis that there was a separate EMFF fund and so it went against EU state aid rules quite often to be able to use ERDF on investment in ports for say fisheries and on agriculture you know there's obviously the separate agriculture fund as well so my my understanding is that the Scottish Government could if they like decide that they did want to use shared prosperity fund on agriculture or industries like agri tech linked to agriculture it's open to them to do that but they will probably rather like us in England probably conclude that there is a separate fisheries fund that supports fisheries and a separate agriculture budget that supports agriculture and they may you may find that they want to predominantly use the shared prosperity fund for other sectors but I don't think there'll be any bar on them using it to support rural communities or agriculture or fisheries if that will what they want to do. Thank you and move on to Alasdair Allan. Thank you convener and good morning sector of state. When it comes to the inclusion of agriculture and fisheries in the UK's new subsidy framework as we've heard already that national farmers union of Scotland has told some committees of this parliament that what's proposed by way of those measures risks reducing the agency to act by this parliament to make their own policy on agriculture in some areas. National Farmers Union of Scotland is not among the usual suspects to make a point like that so do you just feel they're mistaken? Well I met NFU Scotland last week actually and I think they are they're broadly content with what the Scottish Government is proposing and what the Scottish Government outlined to me yesterday in fact in that it retains an area payment a base payment and then has a much more conditional enhanced payment and they favour something that is you know closer to the to the to the area system that they've had which is a bit different to what we're doing you know in England and but there's nothing there's nothing that Scotland are proposing that causes any problems for the UK Government and there's nothing there proposing that I have to stop you there I have to stop you there I'm not I'm not asking you about whether the NFUS have any concerns about the Scottish Government's policy I'm asking you how you respond to their concern that measures like the subsidy control bill and the UK internal market act constrain in their view as they've expressed it to other committees of this parliament the ability in future of this parliament to make its own policy on agriculture. Well I don't agree that it does for the reasons I said earlier that the UK subsidy control regime is far looser than the EU subsidy regime and the internal market act does nothing more than carry over the same sorts of principles that were there in the single market but again with much a much more permissive approach with far more power to the Scottish Parliament and government than it ever had while we were in the European Union. Again I don't quite understand the comparison and you're making a comparison between the kind of constraints that existed when we were in the European Union as you've pointed out as we don't need to point out we're not in the European Union and since 1998 agriculture has been an entirely or virtually entirely devolved area so can you understand why many people ask about things like we've already heard about GM crops but about the ability that this parliament might have in future whether it's to legislate on that or to take another example people who represent bodies who speak up for people with alcohol problems have questioned whether this parliament in future would be able again to legislate in the way it has in the past on minimum pricing for alcohol if the laws that have been passed that we just mentioned in terms of the UK internal market actor to stand in future. Yeah, I hear the point that they make but I think what we all understand is that there is an internal market in the UK just as there used to be a single market in the EU so there does need to be some sort of parameters and there does need to be some sort of subsidy control regime but the one we have for the UK is far more liberal and permissive than anything that existed in the EU so I think yes yes there are those constraints to protect the UK internal market but they're I think they're very mild and proportionate. Would you agree that some of the language that's been used by the UK government on all of these issues has been rather less mild and proportionate perhaps in your own today sector of state I mean we do have a prime minister who has described the existence of devolution as a disaster do you understand why some people might have concerns about power grabs being underway? Well I think you have to just look at the legislation that's been brought forward and judge it based on what it does and you know in my view as I said before we don't have a federal system of governments in the UK it's important that people always understand what we have is a system where we sometimes try to work together in unison and co-ordinate things but when we can't agree then in the final analysis things are either a devolved decision or a reserved decision and so that means that in the end you can get a decision one way or the other and it's quite binary in that sense. Thank you. I've got a quick question on seed potatoes and the impact that the Brexit has had on our farmers in Scotland and I'd just like to understand what the UK Government are doing to alleviate the issues and one of them may be looking at where farmers in the UK source their seed potatoes from to? Yes so the seed potatoes is one of those issues where if I'm honest that the position that the European Union or the Commission have adopted so far is really quite indefensible in that when we were in the final stages of the transition about to leave the EU they had said that they would look at an application to recognise equivalents under a particular element of EU law that they'd already used in the case of Canada and that they would therefore authorise Scottish seed potatoes. Now when we sought an application immediately after the end of the transition to do that the European Commission adopted a different stance which is that they would refuse even to refer it to their Scopath Committee. They know that if it went to their Scopath Committee because Scottish seed potatoes are world renowned as having probably the highest health status of any country in the world the Scopath Committee would approve it without any problem but they've held it back for largely political reasons as we have discussions and that's been one of many difficulties we've had trying to get as you know some sense and goodwill if you like in this post transition period. What we intend to do therefore as the foreign secretary announced yesterday is bring forward some legislation that would at the very least make a first step there which is to enable Scottish seed potatoes to be sold in Northern Ireland so be clear that whilst the European Union might not assess or you might refuse to authorise Scottish seed potatoes into the rest of the EU they have no right to refuse them to be authorised in Northern Ireland and we will take matters into our own hands in that regard and rightly so. Longer time we hope that they will do the right thing here and actually just refer it to their Scopath Committee. It's a difficult issue for the Scottish seed potato industry. The one to the saving grace is that most Scottish seed potato exports go to countries outside the EU so quite high levels of exports to Egypt and also areas like the Canary Islands as well which are outside the EU and therefore are still benefiting from those Scottish seed potato exports but I recognise it's probably the EU market with around 10 per cent of exports and that is a frustration for them. Thank you for recognising the world renownness of the Scottish seed potatoes. I'm just interested in the proposals with regards to Northern Ireland and how the current discussions about the Northern Ireland protocol might impact on these. Well we've been seeking for a very long time as I said to get the EU to simply refer this to the Scopath Committee but what we published last late last summer the UK command paper which was which wasn't about departing from the protocol it was about just making some changes to the way the protocol operates so that it could work in practice as well as in theory and we think those are a sensible set of measures. You know they respect the concerns that the European Union has for their own single market. We acknowledge their anxiety on that front and we want to ensure that we address those concerns in the appropriate way but they also protect the integrity of the UK internal market and recognise that Northern Ireland is part of the UK and must be able to parade with the rest of GB so that's what we are seeking to bring clarity to through a new piece of legislation which the foreign secretary announced yesterday. I'm very glad that my colleague Jeniment will raise the Northern Ireland protocol, we'll come back to that later but I would just like to refer back to what my colleague Dr Alan was asking you and I genuinely get that you are trying to be as positive as you possibly can about the situation in regards to the subsidy framework. But the report to the SEAC committee, the Scottish Government and the House of Lords, and let's particularly look at the House of Lords, their statement was there are powers under which the Secretary of State can refer subsidies or subsidy schemes made by devolved governments to the competition's markets authority which could potentially have effect of overriding the devolved governments and that's the really important bit overriding the devolved governments when it comes to proposing subsidies. Other countries have got agriculture separated from any of these subsidy control regimes, why have the UK Government not done it and did you have any consultation with the Scottish Government when you were putting your proposals forward? On the latter point, we regularly have discussions with the Scottish Government and the Welsh Government and the Northern Ireland Executive as well. Did you consult with the Scottish Government on the subsidy control bill because this is clearly one that keeps coming back as a major issue? Did you consult with them specifically on the subsidy control bill? It was some time ago now that this was introduced some 18 months ago, it would have been discussed. The actual formal consultation obviously would have been for my colleagues in the business department in base since it was a piece of legislation that they were responsible for, but it was absolutely discussed, yes. As to whether there was consultation, yes, they would have been told in advance of the bill being published. With respect, being told in advance is not a consultation. If you have a consultation, you talk about it, you come to a conclusion and you deliver a set of principles. If they hadn't been included in the consultation, how could they have any input to what was going to be coming forward? If you want, I can write to the committee and talk to colleagues and officials in base since they would have led on that engagement. To get an understanding of the official level engagement that would have taken place inevitably around that time. I come back to the reason for a UK subsidy control regime. We need to have something that protects the integrity of the internal market. That is what both the subsidy control bill and the UK internal market act are about. It is just about protecting that internal market and ensuring that there are some parameters on subsidy control. Not least, we have undertakings and obligations at the WTO and others. That has always been a UK-reserved function. Other countries have been able to take agriculture out of their subsidy control issues. Why has the UK Government not given agriculture the same respect as other countries? Agriculture is about making sure that we have a resilient food and drink sector in this country. For us, it is specifically about Scotland. Why has the UK Government taken the decision not to remove agriculture and allow it to have the kind of support, particularly here in Scotland, that we require to keep a resilient food and drink industry? For the reason that I said earlier, the UK subsidy control regime is much looser than the one that we had previously with the EU. It is so loose that we did not judge what we needed to carve agriculture out because the de minimis exemption on payments meant that payments to agriculture on an individual farm would not be captured. It is a regime that is very much aimed at very large interventions on things like the steel industry, for instance. I think that we are going to have to agree to differ on that one. Good morning, Secretary of State. Any disruptions to trade have knock-on effects for local economies, workers and job securities. You referenced the salmon sector in an earlier response. Could I draw your attention to a letter from the chief executive of Salmon Scotland to the Prime Minister yesterday expressing serious concern about a trade war with Europe, highlighting that the salmon industry is the biggest fresh food exporter in the UK and the 12,000 people who rely on the industry for their livelihoods. Could I ask what the UK Government will do to ensure that in industries that rely on trade of fresh produce, there will be no disruptions to export as a result of any changes to border controls? Absolutely. All the speculation around trade wars is deeply unhelpful. In fact, what we are doing is a more measured tone from the European Union and indeed from ministers in Ireland as well. People recognise that there is a challenge here that we need to resolve. There is nothing that we are proposing that breaches international law. It is consistent with our obligations, but we also need to try to get politics restored in Northern Ireland. The UK Government has an obligation to the Belfast Good Friday agreement. We have a responsibility to ensure that it is respected. That is why we have to take this action in order to deal with that very delicate political situation in Northern Ireland. There is absolutely no need or justification for any kind of changes to the way that the European Union approaches these matters. It would be a very extreme step if they were to give notice to abandon the whole trade and co-operation agreement when we are only seeking to correct the approach on things like Scottish sheep potatoes having access to the Northern Ireland market, which is a perfectly reasonable thing for us to do. So could you confirm that there will be no disruptions to exports, the trade of fresh produce, if there are any changes to border controls? There is nothing that we are proposing that would cause any problems at all for Scottish exporters, be they salmon or anything else, since there is nothing that we are proposing that should affect the TCA, the trade and co-operation agreement. Obviously, I do not control what the European Union might do on the other side of the border, but I can confirm that we are proposing nothing that would change their approach. We regularly hear from organisations like the NFUS about the lack of a level playing field, but it is somewhat unquantified, so we do not actually know what figures we are talking about. Has the UK Government done any assessment on the cost of the impact of producers who are paying full costs for border controls to the EU? It is your view that overall we are looking for a lighter touch when it comes to imports and exports, and do you believe that the EU is intending for that to be the case on products coming in and out of the EU as well? It depends, as I said earlier, on the size of the consignments, and that will change sector to sector. A large exporter of a macro producer in the pelagic sector or the salmon industry would typically have an articulated lorry load, a very high-value product, probably in most cases going with a single export health certificate. They therefore will find that the additional cost is quite marginal, but if you are a shellfish exporter and you are selling very small consignments of live crabs to direct to the restaurant trade in France and you are doing several drops, it would become more expensive without a date. We have done some impact assessments on that. From memory, the average increase in cost for those so-called non-tariff barriers, including the additional paperwork on average comes in at around 1 per cent on those costs, but it is an average and it will vary considerably. You will have producers who talk about a significant rise in their costs and others for whom it is largely marginal. Are we seeing the same level of cost increase for European imports? Are exporters from Europe also seeing a 1 per cent on average increase in the cost of exporting to the UK? Is it a level playing field in other words? No, it is not. In that sense, it is not a level playing field because, given the current pressures on household incomes, we have just taken a decision—a decision that some see as controversial but a decision to further delay our own requirements around having to have an export health certificate. We have intended to commence those in July. We have delayed those and the Prime Minister would like us to explore getting a digital solution, which we are at quite an advanced stage of developing, so that we can actually have that digital system for our imports and then simultaneously try to persuade the European Union to adopt the digital system for our exports. The answer in the long run is to get that digital system up and running, but I will acknowledge that it is not a level playing field in that sense at the moment because the EU is applying checks to our outward bang goods and we are not applying the same levels of checks on inward bang goods. Thank you, convener. Has the UK made any specific assessment of costs on production for businesses in Scotland as a result of having to bear the cost of some of the border controls that we have been touching on just now? It does not affect costs of production, but there is a cost on their exports of that additional administration. We have done impact assessments on that, so I can write to the committee if that would help to set them out in some detail. As I said, my recollection is that I have not seen that document for a while, but it was in the order of around 1 per cent as an average, but it does vary quite considerably. It will certainly be helpful. I suspect that for smaller businesses the costs are more difficult to bear. I can briefly quote a couple of examples from our constituency, Donald Yosef MacLean, bar Atlantic Shellfish. The new export systems mean that it does not make economic sense to send smaller individual deliveries to Europe like before, as they can cost the same as large consignments to process. As a result, we now bundle smaller orders together in the same consignment. The costs of Brexit are astronomical and I feel for smaller suppliers who are struggling. Another constituent, McNeill Shellfish, added a lot of extra pressure on the workload that was created overnight. Most businesses going through that level of organisational change would not manage. It is tough keeping up and staying consistent and has added huge costs. I suppose that my question is that you acknowledge that there is likely to be a degree of variation. Do you appreciate the concerns that smaller businesses like those about trying to cope with all that? Yes. What has been happening in the fishing industry, and a lot of work was done on this in the first few months after the end of the transition, is trying to put in place hubs, seafood hubs, where you can collect all of the small consignments together and have a single aggregate export health certificate for all of them. DFDS in Scotland has pioneered quite a lot of the work in this space. There were teething problems with it initially, but I think that they have made some quite good progress in terms of grouping smaller consignments together under a single export health certificate. There is still a cost, but they have managed to make some progress to make some of those smaller consignments more viable. What we will likely see is that the return once you have the requirements for those sorts of paperwork, you tend to see the development of a business model that is more around larger consignments to wholesalers or distributors in the destination country, who then break it up into the smaller individual deliveries of a few individual crabs to a restaurant rather than that being a direct trade. It is the case that in a single market where you do not have that paperwork, you can get some of that direct business-to-business small consignment work happening. It is inevitable that you will end up with a model built around larger consignments in a distributor model. I am going to shamelessly quote another example from my constituency, because, like you, I represent a constituency with a fishing industry. The other point that I was going to make about smaller consignments—in this case, I am talking about probably much smaller consignments than the ones that I was thinking of before—is people who are exporting smoked salmon to perhaps niche markets and making use of the postal service. Posting anything to the European Union is significantly more difficult than it used to be. Uig Lodge in my constituency have raised with me the difficulties which led them in November to stop all exports to the EU because of the sheer complexity, cost and delay that now exist and getting their product to that market. Are the UK Government going to make it any simpler to get a parcel to the European Union? We have, of course, the specialised committees that exist under the trade and co-operation agreement, and they are supposed to try and help to improve these things over time. However, our ability to change EU law is limited. One of the challenges that we have at the moment is that, whilst we would like to go much faster to recognise equivalence and to put in place sensible arrangements between the UK and the EU, given that we are such close trading partners, the European Union at the moment is applying the sort of approach to us that they might to a third country that has a very different regulatory regime from a very different part of the world with shipping containers coming in. At the moment, they have not moved to that next step of trying to develop arrangements that are more proportionate to them and recognise the similarities between our regulatory approaches at the moment. You mentioned that you do not want to talk about trade wars and that you are critical of ministers in Ireland for using that language, but can you understand why they and others might be fearful about that very situation if the UK is prepared to step away from international agreements in the form of a Northern Ireland protocol? As I said, there is nothing that we have outlined and that the Foreign Secretary outlined yesterday that breaches international law or international agreements. We do not accept that caricature. The point that I was making on Ireland was actually a different one, which is there have been a lot of media hype and the use of terms like trade war, but that was a sort of media narrative rather than I think something anybody was actually saying. The point that I was making in the case of Ireland, Simon Covey, I think quite rightly and then in common with us, had recognised that that was very unconstructive and so it was actually trying to strike a more emollient tone and calm things down. It was not that I was criticising Irish ministers for being inflammatory. It was quite the worse and quite the opposite. I think that we were seeing them trying to dampen things down. I want to change the topic ever so slightly. Last night, we were at a British Veterinary Association dinner and there was a Justine Shotten president who talked about the sustainability of the veterinary workforce as a result of Brexit, both through recruitment and retention, but also the pressures that vets are being put under with the vet certification. As a result of Covid, I think that we have a lot more people with pets and as a result of leaving Europe, there are different requirements for pets travelling. I would be interested to know what the UK Government is doing to support the recruitment of vets into the United Kingdom, recognising that Scotland also has a responsibility for that in Scotland. Yes. The APHA, which operates GB-wide and supports the work that goes on in all parts of GB, we did at the point of leaving the European Union. We formed a surge reserve force of vets that we could deploy to help with export certificates should they be needed. We had around 200 or 300 vets on standby to be deployed to different parts of the UK to help on that. In the event, they weren't actually needed because we did find that the work that we had done to build capacity in private veterinary practices actually had paid off and the private veterinary practices were able to take the load and shoulder that burden. We had a contingency plan but it wasn't one that we needed. You are right that in the state veterinary service, the APHA, over the last 20 years, we have developed quite a large number of EU vets that are working for the APHA. A significant number of our vets that we have recruited have been coming from Spain, typically. Spain has a university that specialises in state veterinary training. We have put in place still the ability through the skills worker route and the shortage occupation list, the ability for vets to still be able to come to the UK to work. We are still able to recruit those vets from Spain should we want to. However, the work that we did to build capacity in the private veterinary practices seems to have meant that they have the extra capacity that they need. That moves me on to looking at a report that our Economy and Fair Work Committee carried out on the supply chain. It was looking at— Sorry, Jenny. Can I just go back? We have actually jumped a theme here. We are jumping ahead of ourselves just to try to keep it together. Jim, can I ask you to come in with your questions on the still regarding border controls and transition staging, please? Thank you very much, convener. I am going to go back to the impact of extending transitional staging periods on border checks and input controls. One of the things that you said earlier on, you were talking about the digits decision scheme, particularly with the salmon industry in Scotland. It is the biggest food exporter that we have, and it is massively important that they can get the fresh fish to the destination as soon as possible. One of the things that I know that they are desperately requiring is that digitised scheme. I would urge you to do that. I know that you say that he is working it, but I urge you to work on that very, very quickly to give some comfort to that industry. I would also like to ask when you decided to extend the transitional staging period for border checks. I am going to give you a quote from Martin Kennedy. First of all, did you consult the Scottish Government when you were making that decision to extend those border checks? I am going to give you this quote from the President of the NFU in Scotland. The prolonged failure of the UK Government to place UK food exporters on an even keel where those exporters go to the UK from Europe shows an astonishing level of incompetence and failure to support the Scottish producers in our food and drink sector. We also have the concern—it is not just about the monetary value of food and drink to the Scottish sector. There is also the disease risks without having these import checks. There are over a million pigs in Europe that have been slaughtered because of African swine fever, a disease that has a mortality rate of up to 100 per cent in pigs. So, whilst there has been no import controls had we remained in the EU, our status as non-members poses a greater risk now because we have lost access to the valuable and highly responsive EU surveillance network used to track and trace that disease. That combined with zero import checks leaves the pig industry in particular, which is already in crisis, greatly exposed. Can you answer the pig industry and the national farmers union of Scotland of why this staging has been delayed? Okay. First of all, on the first point about consultation, look, this was raised with me yesterday by the Scottish Government because I think it's fair to say, you know, they don't feel there was as much consultation with them in advance as they would have liked. The reality of— Was there any consultation? In reality, not before a decision had largely been taken and had leaked. The challenge with these things is by the time that the UK Government had reached a conclusion on this, sadly, there were already quite a lot of speculation in the media and so you know, the decision was taken too. I'm sorry to pressure—I'm sorry to pressure, cabinet secretary, minister, but can you not see that that's exactly the kind of thing that causes the real difficulties that we've got between this co-operation agreement? You're talking about subsidy control bills won't be affected because you won't do it to us, but in reality you're not even consulting on big issues like this, which are having a direct impact on our constituents and the big industries here in Scotland. Can you not see that that's causing a problem? Well, look, we do work very closely with all of the devolved administrations on those checks and, of course, it is frustrating for people when they have prepared for a particular date and then we delay it. Coming back to your point and the point that you say was raised by NFUS, yes, of course those who were exporting for the reasons that I said earlier, you know, they may feel that there's not a level playing field, but equally, we've taken a decision because we are concerned at the moment about rising cost of living and we don't want to do anything at this particular juncture that will exacerbate and add to that, so that's what lies behind the decision to do this pause and also to pursue a more digital solution. Finally, on your point around African swine fever, obviously this is something that we do monitor very closely. We have, it's important to note, maintained live animal checks throughout this, so there's 100 per cent physical checks of all live animal movements and plant movements as well have been checked at the point of destination, so it's not the case that there's no checks, there are some of those checks going on and that, of course, is more than used to happen when we were in the European Union. As you say, as an EU member you would have had access to the full so-called RASAF system, but it's also the case that a large proportion of the data that went on there came from the UK anyway and that's because we were more diligent at uploading things on to that system, so yes, it gave us a little bit of extra intelligence, but we do still work very closely with veterinary authorities in the EU and African swine fever is something that we're tracking very closely. Just on the African swine flu, Secretary of State, how does the regionalisation policy work in terms of protecting the UK from bringing in cases, say, from Germany? And so, these provisions are very sort of clearly laid out in the OIE and there's an international approach here and so that still very much applies in the way that it used to and if there is an outbreak in a particular part of the European Union or a region of a country within the European Union, the EU has obligations to notify the world community of that through various international fora principally via the OIE and we are then entitled to put a regional restriction on trades should we judge that the right thing to do. And very briefly, just before we move on to our next section, we have seen a huge rise in people owning pets because of a lot down to Covid and at the moment the animal welfare kept animal bill is proceeding through Westminster. There has been a call for the number of puppies or dogs that can be transported privately to be restricted to three given the evidence of that, the average family or whatever. Are you still considering reducing the number of dogs that can be transported from Europe into the UK from five to three? Yes, we are. On the basis that there's been quite a long standing problem really over the last 15 years of you know an illegal trade in pockets and when we were in the EU those commercial trades should have happened under something called the Balli directive rather than under the pet travel scheme but we've been concerned for some time that there were operators who were using the pet travel scheme inappropriately and they weren't coming in through the proper route and we certainly were we were running an operation at some of the key ports particularly around places like Dover and over a period of a couple of years we actually intercepted around 800 puppies that were being illegally moved under age when they were too young. So to try to curtail that you know that trade we are looking again at reducing that to three dogs which we think is probably is probably appropriate and probably the right level but obviously wherever you draw the line on these things there will be people who will say that's too many or too little. And just just a very very brief response to this because we're already discussed at some point digitisation of the import export procedures where is the where is the hold up I know the UK are very keen to introduce this. Is there a reluctance on behalf of Europe or or why are we not seeing this as something that's progressing things a lot more quickly? We're hoping to be able to have this operational during the course of the next year so we're calling it the digital assistance service but essentially as I said what it would do is automatically generate an export health certificate, a pre-populated health certificate based on dispatch note data and so a company that often they're using digital dispatch note systems for their goods in parallel it would trigger a the generation of any HC so it becomes just almost like an additional piece of paper to go with a dispatch note with an order. We've been trying to design that in a way that that would comply with the EU's existing OCR their official control regime and we've made some very good progress you know on that and they are engaging to be fair to the EU on that one there is an engagement and discussion around their official control regime and how we might make a digital system work so that we can get away from the system that I know drives fish exporters from Scotland in particular to despair which is they have a generic photocopied form and they have to manually score out the species of fish that aren't on the load which is a you know a really clunky way to do this sort of work so we're trying to design one that's that's compliant with the EU's existing OCR and then having done that the next stage would be to try to get a veterinary partnership agreement where you can get some understanding about you know whether you need a vet in every instance or whether there could be some easement there. Thank you very much we're now going to move on to the next theme on communities and workforce in rural Scotland and Karen Adams got a line of questions for you. In regards to labour shortages caused by Brexit and accentuated by the Covid pandemic they've badly affected businesses across the food and farming sector and could cause what's been described as permanent damage. Would you agree with me that if this isn't resolved swiftly this issue threatens to shrink the sector permanently? You'll be aware that this was raised at the UK Parliament's Environment Food and Rural Affairs Committee at which MPs added that the government had requests for help from the farming sector and that quote, labour shortages took a toll on food security, the welfare of animals and the mental health of those who work in the industry. They were frustrated by the reluctance of the Westminster government to engage with the industry over labour shortages adding that despite valiant attempts by the industry ministers failed to understand the issues and even sought to pass the blame on to the sector. Can the Secretary of State provide any reassurances that swift action will be taken here? Well as some of you may know before I chose to pursue a career in politics I actually worked in the soft fruit industry myself and spent 10 years running a soft fruit farm employing around 300 people from and those days about 15 different nationalities so I completely understand the challenges that the farming sector particularly the horticulture sector face and that's why we have now put in place a multi-annual seasonal agricultural workers scheme so no longer a pilot a proper fully fledged scheme with 30,000 visas available in that initially but you know with the view that that could go to 40,000 this year if there is demand for that and last year around 25,000 came under that scheme so we think 30,000 is probably the right starting point but we'll increase that if it's needed but the other thing more generally it's important to note that you know there is there is a shortage of labour around the world and you know two weeks ago I was in the United States and it was really quite telling that even though they had labor mobility schemes and were bringing labor from central America in some cases it was a very very tight labor market and they were really you know they were finding difficulties recruiting staff as well so I don't think we are alone in having this challenge of a you know a big shortage of labour and in one in one way it's it's a good thing unemployment is the lowest it's been in this country since 1974 we've got around a million job vacancies you know that's it's better than having the the opposite of that which is high unemployment but it does create some challenges for employers we've got the settled EU status and there's there's a I think three or four million people who are able to come here to work under that scheme but we are going to be publishing a food strategy soon and we are going to be looking at this issue of labour supply and whether there's other things that we can do to try to help the food sector in particular. Can I ask do you have you done any reviews to find out if the European seasonal agricultural labourers have been put off coming to work because they have to apply for a work scheme to come to the UK has that contributed to the drop in agricultural workers? Well generally speaking I think not because the wage rates are higher in the UK than the prevailing wage rates in most other parts of you know of the EU so it's still quite an attractive destination for people who want to come to do seasonal work. I think the big challenge we had last year is although we had as I said some three or four million settled EU citizens many of whom would have been doing seasonal work they returned home during the Covid pandemic for the for the most human of reasons that they wanted to be close to family and that added a further stress on the sector. Some of those will now return this year and it's a bit too early to tell exactly how many but some of those EU citizens I think who didn't come last year will come this year and they will obviously be supplemented by the seasonal agricultural worker scheme we've got where we're recruiting people under that scheme from countries like you know Kazakhstan and Moldova and Morocco and other countries as well. Thank you. Thank you. Thank you. Thank you convener. Secretary of State there have been disturbing reports of the mistreatment of migrant workers aboard UK fishing vessels including 20 hour shifts for as little as £3.50 an hour racism and sexual abuse and violence. Research by the international transport workers federation suggests it's the use of transit visas which is leading to systemic labour exploitation of migrants aboard these vessels. Can you give a commitment to end the two-tier labour system by closing the loophole that allows transit visas to be used on fishing vessels in the UK? We're certainly going to look at this and I know that the Home Office and some of their agencies who lead on this work will obviously want to investigate these claims and these allegations because it's absolutely crucial that if we're going to have these migrant labour schemes particularly temporary schemes that there is no mistreatment that people are properly played and properly treated and so it's absolutely essential that we address that. There's always been this the transit visa is something very specific to the maritime sector which recognises that often these vessels will be operating not in the UK but elsewhere around the world and often outside of our own EEZ so there's always been that slightly different arrangement for the maritime sector but equally that's not an excuse for this kind of conduct if it's found to be true and it's why you know it is something that my colleagues in the Home Office all want to be looking at. Thank you it's my understanding that these visas the purpose of these visas was supposed to be for work on sort of long-haul shipping container work so perhaps you could look at the appropriacy of them for fishing vessels specifically. The UK Government has spoken about bespoke solutions for rural areas when it comes to migration policy didn't we have one of those when we had freedom of movement for workers across Europe? Well that was one way of doing it but obviously we've taken a view that we should end freedom of movement and have a controlled integration policy but as part of that controlled integration policy we're also putting in place a seasonal worker scheme for agriculture and the reason that's that's important is we had a seasonal agricultural worker scheme since the time of the Second World War so long before we joined the European Union we had such a scheme in place and we also used to have Commonwealth holiday visa work schemes as well where we used to get quite significant numbers of people for instance for Australia and New Zealand and Canada coming under those so we've always had these sorts of schemes even before we joined the European Union we don't have free movement now but we do want to make sure that we've got our labour needs in these areas and the seasonal worker schemes how we're doing it. Thank you I ask because the schemes that you're or the visas that you're referring to don't appear to be meeting demand and also more generally because I just wonder if the UK government appreciates that Scotland has a particular demographic issue in that our population overall has barely gone up in the last century our challenge has been outward migration and I'm just interested in whether in rural areas as in other areas of Scotland you feel that it's perhaps time to look again at the proposals that the Scottish Government again and again put to the UK government to look at tailored visas of the kind that exists perhaps looking to the example of the Canadian provinces for example so that you might be able to meet the needs the demographic and workers needs in Scotland more accurately. I think the point that I make that I think the Home Office did look at this proposal you know quite a lot about whether you could within your immigration policy have a sort of you know of which type subsection and you would try and limit the visas to limit people to work in one area or in one place. I think the view was overall that it would be very difficult to enforce you know in a single labour market that we have where people can move within the UK very difficult to make that work in practice and you know also you know might not be the right thing if you're if you've got somebody coming in under the skills worker route and they're here why would you want to keep them in one place and unable to take a job promotion with a different employer somewhere else so you know balance having considered it they felt it was too difficult to make work but of course when it comes to agriculture we have a different issue that we have both in England and in Scotland which is you've got a high need for seasonal labour in areas where you've also probably not got your population so you're in rural areas you therefore really do need to have temporary accommodation and be running caravan sites and so on in order to to house your workforce because they're often quite quite well removed from towns and urban areas I think briefly I would like to pick up on that which is that maybe the case in some areas but obviously in other areas workers from eastern Europe have made the difference between local schools and other services existing and not existing and have been very well integrated in the community so with that observation rather than a question I'll allow you to move on thank you move on to questions from Rachel Hamilton thank you convener the UK as we know has a highly resilient food sector and in your opening statement secretary of state you recognise that farmers are facing increasing costs obviously due to the situation globally and that's particularly on fertilizer feed and fuel could you tell the committee what steps UK government have taken to support the farming industry currently in this crisis yes and so some of what we've done has been has been in England so we are launching a new funding scheme called the sustainable farming incentive where we're actually going to pay farmers for embracing green cover crops and green manures like fasilia which you can sow as an overwintered crop and it locks up the nitrogen and then holds it and can be plowed in for the next crop and also nitrogen fixing legumes and we made some changes to some of our farming rules for water to make it easier for farmers to be able to spread slurry in the autumn so that we've changed some of our regulations and the design of some of our schemes to try to give farmers access to alternatives other than manufactured fertilisers so that they can reduce the total amount of manufactured fertilizer they might use. We've also delayed plans to make changes to the availability of urea again so the farmers have got access to that as an alternative during these difficult times. We've also in England advanced half of the BPS payment so the subsidy payment that we would normally pay in December in common with Scotland and other parts of the UK we've taken a decision to bring half of that forward and to pay it much earlier in July to try to help farmers with their cash flow and the other things we've removed the tariff that have been placed on US maize in order to try to get some of the feed costs down and that would be particularly helpful for some of the cattle sectors the dairy and beef sector in particular. So we've done a package of things to try to help but the other thing to note is that the wheat price is what it is it's it's follows the gas price always has done and some of those big players in the poultry sector and the pig sector have aligned contracts that are linked to cost of production and do often move automatically when the price of their feed input rises but you know equally it's a difficult we do recognise a difficult time for them and we've done we're doing what we can to try to help. Secretary of State I know you don't have a crystal ball but clearly this Ukrainian crisis is is with us to stay for quite a number of months and maybe years farmers need to make decisions based on you know the seasonal effects that they're having but also future decisions regarding stocking and that has an integral relationship between Scotland and the rest of the UK. Is it your view you will take a longer view on this in terms of those future decisions that farmers have to make or are you taking each month as it comes? Well when it comes to the decision to plant wheat there is a reality here that we need the passage of time before in some ways the the fog clears and then both the millers and the farmers know where they stand and know where the point of reconciliation is on what prices need to be because at the moment if you were a miller you wouldn't necessarily want to be committing at a very high wheat price because you might be concerned that the price of wheat could fall and you could be less you know left exposed and equally if you're a farmer you're not one of you're not going to want to commit to quite high input costs on fertilizer unless you've got some confidence about the price you're going to get for your wheat and at the moment really what we need is just as time goes on there will be a moment of clarity probably sometime during the month of you know late June or July where it'll be clear once things have settled you know what the forward price for wheat is and should be and where fertilizer prices are going to settle you know and at that point the millers and farmers can can reach an agreement and get the crop in the ground in the autumn so that's what we're we're waiting on on that front and then on the livestock sectors as I said some of those costs will automatically go through given the nature of the contracts they have particularly on poultry to a lesser extent on pigs but we're also we're seeing quite high commodity prices generally in the livestock sector so that the price of milk is already up 30% on its five-year average it's now edging quite close to 40 pence per litre the price of lamb is currently over six pounds a kilo and again that's significantly up some 50% higher than it was you know five years ago beef is up 20% and so on so agricultural commodity prices have also gone up to and that'll help litigate some of these rising costs I understand that Bayes is the regulator for the groceries code adjudicator I wondered if you had a view from Defra's point of view on how it's worked to support food producers and farmers well our view is that it has it's worked in so far as it aims to improve the conduct of the of the 10 big retailers and it's very important to understand that that's all it's aimed at those retailers what of course it can't do because it's outside of its remit is deal with contractual arrangements between a farmer and a processor whether that's a meat processor or a dairy processor and so we felt for some time that there is more work to do to improve transparency and fairness in some of those contracting arrangements particularly in sectors like pigs and in dairy and that's why we took a power in the agriculture act in order to be able to bring forward regulations to to bring certain requirements to the way those contracts work because at the moment I think we often see asymmetric obligations where there's lots of obligations on the farmer about what they need to supply the processor but not much by way of a reciprocal undertaking to the farmer about how they can expect their price to be calculated and that's something we want to remedy. Mary Gougeon, the rural affairs secretary here in Scotland leads on the food resilience task force. What intergovernmental engagement have you had with the Scottish Government regarding food security issues across the UK? We formed late last year a new project called the UK agricultural partnership and this recognises that agricultural policy is fully devolved as we've discussed but nevertheless we are all in pursuit of quite a shared endeavour around trying to support farm incomes, improve agricultural output in our food security and also improve environmental outcomes as well and so we move and have quite technical discussions. We've had one on water quality, we've had one on soil health so far in Northern Ireland and the next one we were approached by the James Hutton Institute who thought that we should do something on food security and Mary Gougeon has also contacted me to say that she would like Scotland to host the next meeting of the UK agricultural partnership and for it to address this important shared challenge on food security so that will happen at the James Hutton Institute on 5 July. So we've had discussions already and we discussed it yesterday as one of the agenda items on the joint ministerial committee but we are going to have a detailed session on food security for all parts of the UK taking place at the James Hutton Institute in July. Secretary of State, just quickly, what is your view on the approach to gene editing in now that you have obviously the Queen's speech has been made and there is a bill to recognise that? What would you be saying to the James Hutton Institute because obviously they're very in favour of gene editing and it's something that the Scottish Government would rather align with the EU and wait for the result of what they believe should be the right path forward? Yes, well I look at obviously the Scottish Government has got a position which I think is you know is broadly that they don't really want to do anything until the EU have moved first but I think it's important to recognise that there was a judgment of the European Court of Justice some years ago now in 2018 that actually most EU member states disagreed with because while there's quite a bit of scepticism about genetically modified organisms in many EU countries all of them recognise that gene editing where you're actually doing what you could do by natural breeding techniques is just about moving a trait within a species. All of them recognise that that's a technology that Europe should be open to and so the EU themselves are about to start a consultation on how they can change their law because it wasn't really a decision that was taken for scientific reasons it was just really a rogue legal judgment by the ECJ at the time. I think the EU are about to embark on this. They will be several years behind us probably. If the Scottish Government judged that because this was an emerging policy in the EU and they could live with an early move well I think some of those academic centres of excellence in Scotland would probably be happy with that but obviously it is a decision for the Scottish Government whether they want to make that change. The offer from us is there if they would like to join the gene editing bill we have and have a schedule within that but equally it's a choice for them. Thank you. If you don't mind bearing with us we've got two very short questions. On the topic of food security and just earlier you touched upon the cost of living crisis. We have a situation at the moment that's driving up poverty. You said yourself that unemployment is low yet we're seeing poverty running through the homes of working people so there's a disconnect there. Inflation is set to be the highest for 40 years and fuel prices are soaring. Food prices are what being described as apocalyptic and Justin King, the former boss of Sainsbury's has pinpointed Britain's exit from the European Union as the cause of the current cost of living pressures as felt by British shoppers. This is amid a rise in the cost of food as Mr King believes that the problems with trade between UK and Europe since Brexit has shown by the route and also including the Northern Ireland protocol he believed were playing a role. People are suffering Mr Eustace. There have been many comments by your colleagues which have invalidated and quite frankly patronised the struggle people are living in their day-to-day lives at the moment. Comments such as to imply that people are less educated about cooking and getting access to fresh food. People should just get better paying jobs or increase working hours. Mr Eustace, this is really important, really topical at this time. People are facing hard choices. Do you agree with those comments what more can we do across our Governments to help support those people? What can you do in your position in regards to food security? Yes, obviously there is pressure on household incomes that the Government absolutely acknowledges and that is why we put in place some measures to try to help people in particular with energy costs. The important thing to note on food is that there is some pressure on retail food prices but it would be wrong to describe it as apocalyptic or whatever term was used. If you look in April prices rose by about 1.5 per cent. In March they rose by 0.2 per cent. There are some rises certainly but it is affecting certain sectors. What we have in the UK is a very competitive retail sector where Sainsbury's and Tesco's are very much competing with Aldi. A lot of them are on the so-called Aldi price match and in many staple products there is quite ferocious retail competition which is holding prices in check. They are rising but it is more modest than some of the newspaper reporting would suggest. Nevertheless, at a time when people have high energy costs we recognise the pressure on people's incomes. If you are paying out a lot of money for your energy bills of course one of the first things you realise is that you are struggling to afford food even if the price of food has not increased significantly. The key thing is that because we all need food it is the first thing that people notice when budgets really are stretched. That is why we are doing what we can to try to help people with energy costs but it is very difficult. The driver of this is the international gas price. 75 per cent of it is coming from that. Some of it is down to wage pressures as well but the bulk of the rises that we are seeing are a direct consequence of the high gas price. Thank you. Finally, Beatrice Warshott. Thanks, convener. My question is around cash flow in the food production. I wondered if you could explain what exactly the UK Government has done to encourage banks to lend with agility so that cash flow can be maintained. One of the things that we have chosen to do in England is to bring forward half of the BPS payment but we do also and that will help with cash flow at a time when input costs have risen. We also work very closely with the major banks to understand what they are doing and their lending decisions. Generally speaking, most farm businesses, particularly those who own their holding, find that they are able to get an extension of credit from a bank because they have significant assets of security. Generally, they are able to borrow money but it is something that we monitor quite closely and keep an eye on because it is important that we get those credit flows to enable crops to be grown. Thank you. Mr Eustace, Secretary of State, we very much appreciate your time today and thank you for giving us more of your time than was originally scheduled for that. That has been most helpful but you will understand that the topics that are discussed today are much more significant to this Parliament. Thank you very much for joining us and I hope that we can meet up with you sometime in the near future. Thank you very much. Thank you very much. I would like to come up to Scotland and do it properly in person next time. That concludes our business in public and we now move into private session.