Meeting of the Parliament 19 November 2024
Thank you, Presiding Officer. I understand that the connection between Shetland and Holyrood this afternoon is a bit ropey, but we will do what we can.
The title of this afternoon’s debate implies that the rural economy is one homogeneous entity, but of course it is not; instead, it is a patchwork of rural economies, highlighting the diversity of our rural, coastal and island communities, which are interwoven across Scotland. Those economies and communities, from north to south, should be championed and commended for their contribution to Scotland’s economy in increasingly difficult circumstances.
Just as the weather varies across the country from one area to another, so, too, do the landscapes, environments and growing seasons. Food production costs vary, too, and are felt at source and throughout the supply chain. Geography and the impact of transport costs from mainland Scotland add to island costs. Those rural economies have shared goals—providing food for the nation and the valuable food and drink export economy—and they also have similar challenges.
The UK Government budget has achieved unity across all those rural communities, because of the impact that the proposed changes to farm inheritance tax rules could have on the succession planning of family-run farms. During a similar debate last week, I highlighted how crofters, farmers and growers have serious concerns about the loss of ring-fenced agriculture funds, as well as the implications for family farms of the tax changes in the autumn budget.
Those tax changes are driven by spreadsheets, with the Treasury pouncing on the capital-rich figures and ignoring the cash-poor experience of many in the sector. As the briefing from Scottish Land & Estates highlights, the cumulative effect of those and other announcements in the budget disproportionately impacts rural businesses. The Barnettisation of agricultural funding and increases to capital gains tax and employer national insurance make for a perfect storm of tax hits on the rural sector.
Modern farming is looking for research on the most climate-friendly, innovative and profitable means of production but, with universities paying additional employer national insurance, we may see a decline in capacity for such important work.
Liberal Democrats have been highlighting general practitioners’ concerns at the announcement of the increased employers’ contribution to national insurance, which will have an effect on small to medium-sized business. Ed Davey has called on the Prime Minister to put in place an exemption for GPs, pharmacies and healthcare providers. That will have particular resonance for rural and island healthcare providers, considering the challenges of providing services in those settings. Staff recruitment and retention are already difficult in some areas.
In the wake of the UK budget, my party highlighted the £70 million cut to DEFRA’s food and farming budget, which was hidden in the fine print of the chancellor’s plans. Our rural areas will not be immune from other big-ticket cuts in the budget, such as the slashing of the winter fuel payment, which was announced in July and confirmed in the budget, and which will hit some of those who are on the tightest of fixed incomes. That decision will stop pensioners in the most northerly, windiest and most fuel-stricken parts of the UK receiving a cash top-up that many have come to rely on.
I urge the Scottish Government not to use the upcoming budget to make things any harder for our rural economies. Like other communities in Scotland, our rural, coastal and island areas need investment in communication, transport, health and education, and those who grow our food on land need multiyear, ring-fenced and stable support to continue to do so in the future.