Chamber and committees

I enjoyed Douglas Ross’s speech because of his recognition of Westminster’s failure to needs to listen to Scotland’s needs. It is a slightly Kafkaesque conversion but welcome nevertheless.

Although the primary sectors of agriculture, forestry and fishing remain important for the rural economy of Scotland, the majority of businesses in rural Scotland lie outwith those areas, so I will make some reflections on that. We know that rural Scotland has been hugely negatively affected by Brexit, including the loss of EU funding. The chancellor has ignored Brexit and the Labour Party in Scotland ignores it, but recently the governor of the Bank of England pointed out what a disaster it has been for the economy. I am afraid that it is still the elephant in the room, and it is not going away.

I, too, was dismayed to hear that the UK Government had failed to undertake an impact assessment and, even worse, that John McTernan, who supposedly still speaks for Scottish Labour, suggested:

“we don’t need small farmers.”

It is obvious that there is no understanding of the complexity in rural supply chains and how fragile they are. The rural economy is home to businesses of varying sizes, ranging from self-employed and sole director businesses, of which there is a higher percentage, right through to larger businesses, including in the renewables sector. We need to reflect on that. I recognise the number and scale of small businesses and their importance to the rural economy.

Many factors can inhibit growth. For example, many communities are far too removed from the trunk road network and, often, public transport is historically weak. We know that housing is a major problem. Indeed, it has been mentioned in the debate—particularly the lack of affordable social housing in many rural settings.

There are areas where significantly more investment is needed, but the Scottish Government continues to be denied the ability to borrow properly to invest. I have spoken about that often. We need to find a way to invest much more in infrastructure in rural Scotland. I know that the Scottish Government continues to work hard on that.

The budget was supposed to be about growth, but it seems that most budget measures will further depress rural economies. Given that Scotland’s rural economy contributes tens of billions of pounds annually to the overall Scottish economy and, of course, to the UK Government coffers, we cannot afford to neglect it.

Colin Smyth keeps asking where the money will come from so that Labour does not have to tax the small farmers. How about going for a growth budget? How about stopping access to tax havens, corruption and money laundering through the city of London that is estimated to cost the UK economy £262 billion each year? How does that compare to £40 million? How about Labour having a look at that?

There are some specific issues emanating from the budget. Freelancers—sole directors of their own limited companies—make up a large part of the economy. The chancellor’s change to the per-employee threshold, which will fall to £5,000 from £9,100, will have an impact on their drawing down a salary, as they are ineligible for employment allowance. That will not encourage growth or entrepreneurship in rural settings.

Thousands of freelancers and contractors have been forced on to umbrella-company payrolls due to IR35 rules. Unless they can negotiate a higher rate of pay with their end client, those contractors’ take-home pay will fall, as they cover the cost of their umbrella company’s higher employer national insurance bill. That will have only a negative impact on growth. The fiscal drag caused by the chancellor freezing personal tax allowances until 2028 will mean that many employers in the rural economy will be dragged into higher tax bands.

Fundamentally, the chancellor’s approach will harm rural economies. It does not encourage investment in transport and housing at the levels required, and it will have a fundamentally negative impact on growth.

That is a difficult role. Do you have any final points, Sam?

With all due respect, I was not asking a political question; I was simply asking what would need to happen for you to pause the process. I think that you are alluding to only one element—incidentally, I do not have the cheque book of either the UK Government or the Scottish Government; I am simply floating this.

In your answer, you alluded to some kind of financial benefit, which you highlighted would need to be considerable. Am I correct in saying that you were suggesting that that could be a consideration?

I have a final question that brings me back to some of the themes that I followed up earlier. When I asked you what needs to happen for there to be a pause, my recollection—you can correct me if I am wrong—is that, during our exchange, you said that financial incentives might have been a consideration, but you suggested that we were nearly at the point of no return. I think that that is what you said.

Thank you.

Congratulations on your appointment, Colin. I think that it is time for you to take the chair.

Okay. We look forward to hearing more about that.

My last question is on project willow, which you have referenced. An issue for people on the outside looking in—and one that we raised in this committee when we looked at the just transition—is that the governance of the Grangemouth future industry board was at that point a little uncertain. I know that things have now changed and that there is dual convenership between the UK Government and the Scottish Government, but the board’s operation with regard to its accountabilities and responsibilities is still not clear to me.

It seems to me that, given Ineos’s role at the heart of absolutely everything and in driving project willow, you have been able to adopt a highly successful hedge position. You will win if you win, and you will also win if you do not win, because you are absolutely at the heart of all measures that are driving Falkirk district forward, whether it be the Forth green freeports, what has happened with project willow and so on. How have you personally, or as a company, assessed the risk of a conflict of interests between yourselves being at the heart of all those things and what is best for the wider area, including the community of Grangemouth?

My colleague Kevin Stewart asked about taking things up a level. The act of Parliament that underpins Consumer Scotland has five key areas of focus. For the record, the top two are reducing harm to consumers and increasing consumer confidence. How are those linked and do they imply a hierarchy of importance? In particular, is there any point in increasing consumer confidence if there is no resulting reduction in harm? I would like to understand how you square those up.

That was a very comprehensive answer in which you fairly recognised the complexity of what you have to do.

Given the way in which you operate, how effective is your relationship with other key stakeholders? One could argue that you occupy quite a niche position from the point of view of your research methods and how theirs might differ.

Yes, and yes, and also an assessment of the impact on society—those three elements.