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Yes. Funding was put in place to make up for the reducing return from the national lottery to the arts. I should say that conversations are going on with funders such as the national lottery to try to ensure that we can protect the amount of funding that goes towards the arts.

Yes, funding was made available to Creative Scotland to offset what was going on with the national lottery. Creative Scotland was able to build up reserves as a result of that. Out of those circumstances, there will be funding stability through this financial year, but, as I have said to the committee, unless there is an economic upturn or an end to some of the financial pressures, there will still be a medium-term challenge beyond this financial year.

There are two parts to Mr Cameron’s question.

In understanding the budgetary process for this year compared with last year, it is important to know that the portfolio will not incur the same level of costs for the census. That is an important part of understanding the global budgetary position.

That anybody would face risks to their employment status in culture or the arts is of concern to me. As I have said to the committee before, an additional concern is that people will not become active in the sector to start with. It is not just about how the current economic pressures impact on organisations and people in employment; it is about those who might want to start a career in the culture sector.

I am extremely seized of that matter and I am doing everything that I can to underline that the cultural and arts community in Scotland is of import not just for art’s sake but as an extremely important part of our economy.

On Mr Cameron’s justifiable concerns, it is also fair to add that parts of the culture sector are growing considerably. Last year, for example, we learned that the screen sector’s value to the economy is more than £0.5 billion and that, on current trajectories, it will be worth more than £1 billion by 2030, with a significant increase in the number of people who work in that sector.

It is absolutely fair to point to the constraints and difficulties that have been caused by the broad economic circumstances and to Scotland’s budgetary constraints. However, at the same time, it is important to highlight that the culture sector is moving ahead in what are difficult circumstances; that some parts of it are doing extremely well; and that the Scottish Government and our agencies such as Creative Scotland and Screen Scotland, which have a responsibility to work with the parts of sector that are facing difficulties, do everything that we can to support those parts in these difficult times.

Good morning, convener, and thank you for the opportunity to make some opening remarks. I think that we all agree that the Scottish Government’s budget for 2023-24, which was published on 15 December last year, takes place in the most turbulent of economic and financial contexts that most of us can remember.

As the Deputy First Minister set out in his introduction to the Scottish Government’s budget, the cumulative effect of war in Europe, surging energy prices, raging inflation and damage to labour supply and trade due to Brexit, along with the United Kingdom Government’s spectacular financial mismanagement, creates the most difficult set of conditions in which to set a budget.

I must stress that our ability to respond to the cost process is limited by the inactivity of the UK Government and the financial restrictions of devolution. Our budget is largely fixed, our reserves funding is fully utilised and we have no ability to borrow to increase our day-to-day spending.

Since I last appeared before the committee, we have continued to work with the culture sector to identify barriers to immediate and long-term recovery. The Scottish Government has now convened hybrid round-table meetings with the culture sector in Glasgow, Inverness and, yesterday, Dumfries. In addition, we convened a round-table meeting last November with culture sector public bodies. Those meetings have helped to explore ways in which organisations can best work together to develop shared solutions.

I want to reassure the committee that we have been listening to the intelligence that the sector has provided at those meetings and that we will continue to do everything in our powers and resources to help those who are most affected by the economic crisis.

The 2023-24 budget required us to make extremely hard decisions and to prioritise spending. As I said in my response to this committee’s report on culture funding, we will invest £278 million in Scotland’s culture and heritage sector next year. That will include continued investment in Scotland’s screen industry, with £9.25 million for Screen Scotland, and investment of £72.7 million for Historic Environment Scotland to ensure that it can continue to care for our heritage in communities across Scotland.

We are providing an additional £2.1 million to support increased costs in the national collections. We are also committed to maintaining spend in other areas of the culture budget, including museums, public libraries, the national performing companies, youth music and community-based culture.

Those commitments have required hard choices to be made. Over the past five years, we have provided Creative Scotland with more than £33 million as an additional element of funding in response to a downward trend in arts funding from the National Lottery Community Fund. At a time when we face incredibly difficult decisions about Government funding and with Creative Scotland able to draw on its accumulated lottery reserves, we have discontinued that element of funding. I am grateful that the Creative Scotland board took the decision on 19 December to use lottery reserves to guarantee to its regularly funded organisations that their funding will remain the same for the next financial year.

I know that the committee has concentrated on the culture budget in its pre-budget discussions, but I am also happy to answer questions on other areas of my portfolio, and I will touch briefly on external affairs and the referendum budget.

For external affairs aspects, international engagement continues to be essential to successful delivery of “Scotland’s National Strategy for Economic Transformation” and our net zero transition. We are committed to being a good global citizen and to playing our part in tackling global challenges, including Covid-19, climate change, poverty, injustice and inequality, particularly through our international development fund. This budget continues to support that important work.

One of the key priorities for 2023, to which additional funding has been allocated, will be the delivery of the new talent attraction and migration service, which will bring together and expand services for employers and individuals. The service will help employers to use the immigration system to meet their skills and labour needs. It will provide good-quality information and advice to people who are thinking of moving to Scotland or who have just moved here. Scotland must be able to attract people from all over the world to work and study without excessive barriers, and migration policy should support mobility, collaboration and innovation.

On referendum costs, to help our most vulnerable citizens, we intend to utilise the finance that had been earmarked for a referendum on independence—£20 million—to make provision to extend our fuel insecurity fund into next year. I stand open to any questions.

I take the opportunity to support that event as well.

I think that it is fair to put on the record, when discussing Historic Environment Scotland, that the Government has recognised the particular challenge that it is having to deal with, so the agency’s operational budget is rising by 18 per cent, to £114.5 million. That will play a part in the maintenance of property, but it is also for staff pay and a number of other important areas.

I am pleased not only at the good news about Scottish Ballet and what it is doing for health and wellbeing, but that we are beginning to hear some good news about various sites that are reopening. I see, for example, that St Rule’s tower at St Andrews cathedral is reopening on Friday 20 January. Every opening is a significant positive milestone for communities, for which a particular place will be of intrinsic, and tourist and economic, value. At the same time, however, as I am sure Mr Golden and colleagues will appreciate, it is important that Historic Environment Scotland reopens facilities only when it has confidence that the people attending those sites will be safe.

Mr Golden has asked me to give a number. I cannot give him one, but I will be happy to ask Historic Environment Scotland for the latest update on its facilities. In relation to the committee’s deliberations, with the subject of today’s session being where we are with the budget, the Government’s commitment in respect of the budgetary situation for Historic Environment Scotland reflects an understanding that reopening sites is a big challenge for the agency. It will be an on-going challenge, but I am glad that facilities are reopening. When that can happen safely, and as quickly as possible, it is to be welcomed.

It has been unhelpful to have a cliff edge in relation to Covid support funding. Given that everybody has been focused on trying to recover, bounce back and deal with the diminution of reserves that were spent before and during the Covid pandemic, the substantial ending of funding has been problematic. That was pointed out to the UK Government. There has been some intervention in relation to energy costs, but, again, that is coming to an end, although bills remain extremely high.

It is a matter of concern that, when we have all those pressures, the funding decisions endanger the ability of cultural and arts organisations to genuinely bounce back, because, as we have discussed at the committee, public behaviour, among other things, has not immediately snapped back to pre-Covid levels. Although we are seeing good returns from different venues in Scotland, including museums, we are still not back to where we were before.

We have not seen the economic recovery or the return of the public yet—we are encouraging that to happen as quickly as possible—but we have gone from Covid pandemic circumstances to the ending of funding before a recovery has taken place. That endangers the recovery, so it is problematic.

The first thing to be absolutely clear about conceptually is that we are currently effectively aligned with the European Union. That is the starting point. The effort to describe attempts to align with the European Union as being “immense” is misdirection, frankly, because we are currently aligned with the European Union. Legislation is being forced on us as a Government and as a Parliament that will make us go through an entire process to remain aligned, and that is not our choice. It is being foisted on us by the UK Government. Is that significant? Yes, and it is totally unnecessary. We do not need to do it.

If Mr Cameron’s colleagues on the committee in the House of Commons had voted with the other members on the committee last week, we would not need to have this discussion, because Scotland would not have been proceeding with this dealignment only to then have to legislate for realignment. Is that the efficient way of going about it? No, it is not. That is the approach of the UK Government.

Are we going to do everything that we possibly can to be efficient, avoid duplication and do all of those worthy things as part of the process? Yes, absolutely, but please let us not lose sight of what we are dealing with: a legislative proposal by the United Kingdom, unwanted by the Scottish Government and opposed by the Scottish Parliament, which may or may not be subject to the Sewel convention. We do not want it to happen. We are currently aligned with the European Union and we wish to remain aligned with it. We do not need to go through this unnecessary process for the next year—and longer—to do that.

This is on the UK Government, and it is for it to answer why it is going through all of this when, with some more imagination and, frankly, good will, it could have amended the bill and disapplied it to devolved areas of government. That would have been the most efficient approach to the process if the UK Government wanted to go ahead with it for England.

Thank you very much, convener.

The Scottish Government’s position on the bill that we are considering this morning is well known by all here. It is a bill that will, if passed, wreak havoc across a swathe of sectors while it chips away at the increasingly fragile state of devolution in the United Kingdom. It is the Government’s view that it should be withdrawn immediately—a position that is supported by many of the witnesses from whom you have heard. This bill is the latest manifestation of the Brexit that Scotland did not vote for and that is making us the poorer.

At Prime Minister’s question time last week, Rishi Sunak said in response to a question about the bill:

“We are seizing the economic opportunities, deregulating and signing trade deals around the world.”[Official Report, House of Commons, 30 November 2022; Vol 723, c 896.]

The key operative word there is “deregulating”, but seemingly not a week goes by without new evidence showing that Brexit has economic costs, not opportunities. Last week, research by the London School of Economics and Political Science revealed that the average household food bill has gone up by £210 over the past two years because of Brexit. More deregulation is not what businesses want. The Institute of Directors has said that the bill

“is likely to create a huge amount of uncertainty around the regulatory framework ... This is the last thing that business needs in such a fragile economic environment.”

The IOD and a dozen other organisations wrote to Grant Shapps asking him to withdraw the bill.

The Scottish Government has initiated a programme to co-ordinate management of the secondary legislation that will be necessary to stop essential devolved laws being lost, should the bill be passed. The SG was still operating largely in the dark on what the UK Government proposed to do with retained EU law and, therefore, what powers Scottish ministers might need to use. It has not told us what retained EU law it needs to preserve immediately in order to comply with international obligations—in particular, the EU-UK Trade and Cooperation Agreement. It has not told us what it wants to preserve or its approach to the areas that we have already agreed to work together on, including the common frameworks.

Notwithstanding the fact that it has been working on its review of REUL since September 2021, the UK Government has not told us what legislation it wants to sunset. Of course, if it actually knew what it wanted to do away with, it could bring forward specific policy proposals that would be the subject of proper parliamentary scrutiny in the usual way. That would be far more proportionate an exercise than what is proposed in the bill.

I hope that Parliament takes some reassurance from the fact that I and my officials have repeatedly made the point to the UK Government that implementation of the bill in Scotland will require time for scrutiny by the Scottish Parliament. I look forward to your questions. Thank you very much, convener.

In my infamous meeting with Jacob Rees-Mogg, who came all the way to Scotland to meet me on a Teams call rather than meet me in person on the matter, he explained the logic as he saw it from the UK Government’s point of view. He explained that it was a Government that wanted to deliver Brexit in full and that, from his point of view, that meant getting retained European law off the statute book. In other words, it is an ideologically driven exercise. When I asked him about what that would mean for a Government elected in Scotland that wished to remain aligned with the European Union, he said that we would have the power to do so. I asked him why, if that was the intention of the exercise, one would not simply legislate a carve-out for Scotland.

That is what totally mystifies me about the approach of the UK Government here. If one were operating on the basis of a respect agenda—which is what we would think, given all the terminology that we hear about listening to and meeting one another and hearing one another’s concerns—and the UK Government was serious about that, as well as having its own drivers in relation to why it thinks that the REUL bill is a necessary and proportionate way of doing things, which I have just explained to Dr Allan, it would recognise that there were other approaches elsewhere in the United Kingdom and would legislate accordingly, but—oh, no—that is not what is happening. One is carrying on regardless. One is disregarding the interventions of the Scottish Government. One is disregarding the clearly stated majority view in the Scottish Parliament on the bill and one is proceeding as planned.

With regard to why the UK Government is continuing with the bill—notwithstanding the fact that its approach is back to front—if one wanted changes to be made to particular pieces of retained EU legislation that were not in accordance with UK Government policy, why would one not just legislate for that, as opposed to throwing out everything and forcing us into a huge process, which we will undoubtedly come on to, of trying to understand what is heading down the tracks towards us in this regard?

My reading of what has happened in the past two weeks is that it is related to the balloon-floating exercise by the UK Government with regard to seeking a potential parallel to the Swiss alignment with the EU, which was, as we know, shot down within 24 hours. I think that the Prime Minister and the Chancellor of the Exchequer decided that they had to show their pro-Brexit credentials to their own back benchers, and that doubling down on the REUL bill and saying that they were going to go ahead with no delays was their way of doing that. That is the best explanation that I can give to Dr Allan. It is mystifying. It does not reflect good intergovernmental relations between the UK Government and the devolved institutions, because there has been total disregard for the position of the Scottish and Welsh Governments.

I evidence that by the fact that I have written twice to the secretary of state who is in charge of the bill—Grant Shapps—since he took office. I included our proposed amendments that would have respected devolution. Since then, I have received no reply whatsoever. As we know, the Scottish Government and the Welsh Government have the same position on the REUL bill. I wrote a letter, together with my opposite number Mick Antoniw, the Counsel General of the Welsh Government, about our opposition to the bill. If the UK Government was remotely serious about wanting to have good intergovernmental relations and respecting the devolved Governments and institutions of elsewhere in the United Kingdom, it would at least answer letters, but it does not even do that.

That is the best insight that I can share with Dr Allan and the committee on the totally unacceptable way in which the UK Government is proceeding with legislation that impacts on the devolved settlement and the policy of the Scottish Government. It is one example, among many, of how the devolved arrangements in the United Kingdom do not work in practice.

Is that a quote from the Secretary of State for Scotland?