Chamber and committees

Thank you.

The third area of potential risk is AI-enabled cyberattacks, which have become increasingly more sophisticated. Is that something that you expect your new digital person to consider in more detail?

You knew that I was going to ask about the board, so thank you for bringing that in, too.

That is me as far as my questions are concerned, unless you have anything to add, Aidan O’Carroll.

You have already answered my follow-on question. That was fairly well documented.

This is a question that I asked you last year, but I will ask it again, because I am going to put it to every public body that comes in front of me at any committee. How are you preparing for the potentially exponential growth in the use of artificial intelligence? What is your thinking this year compared with last year? What external consultants are you using, and what is your risk assessment? This is just a checkpoint.

I regard the fact that that keeps you awake as good news.

We have talked about your risk assessment in general. In the context of the constraints in public sector funding, you have already commented in response to a number of questions about things that you cannot really afford to spend on. You just referenced the Scottish Government’s human resources and finance corporate transformation programme. Are you alluding to the possibility that that could mean further restrictions or lack of growth in funding or is it as much about what that might bring to you? I am interested to hear a bit more about that.

Lastly, every time that you come in front of us, you always talk very positively about the culture that you are fostering. I regard culture in organisations as hugely important and, of course, something that comes from the top. Often, the culture of an organisation stays endemic to it, even after the original people have moved on to different things. What is your guiding philosophy? What are, if you like, the top trees that you are planting that will grow and bloom for generations after we have all moved on?

The convener mentioned the public trust model. Might it be beneficial to work cross-party on that? It strikes me that, if a sound model can be found and adopted, it would have potential benefits for a variety of areas, given current constraints. A few members might be interested in looking at the implications of that generally, but it would also be advantageous for your bill.

Will the member accept an intervention?

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.

The member is obviously enjoying iterating the budget settlement for the Scottish Government, but could he specifically address how this disaster of a budget will address the black hole in the UK economy? I suspect that his party would argue that that black hole is part of the reason for the changes in tax.