Seòmar agus comataidhean

I would expect to see engagement and consultation with industry. That is a given—the industry needs to be consulted about any potential increase in the levy rate, which would be up to QMS to do. Of course, I would hope that any proposals that it put forward would have that industry agreement. At the moment, I cannot speculate on what any potential decision might be or what it would look like, but I know that QMS has a strong relationship with its levy payers and that at that moment it is engaging with them and undertaking that engagement across the country. I would hope that QMS would reach overall agreement and consensus, if it were proposing to increase the levy, about what that should be.

You are absolutely right in that sense, but I have tried with the proposed ceilings to future proof things, so that we do not need to come back every year to look at them and decide whether they are at the appropriate level.

As I have said, a variety of factors have been taken into account in developing the proposals for the ceiling rates set out in the order. We have looked at averages over the past 10 years to project as well as we possibly can in order to future proof things. Of course, we can never say never—we do not know what will happen a few years down the line—but we hope that the ceiling rates in the order today are future proofed to a certain degree.

I make the point again that the order deals with the ceiling—the maximum rate. QMS would have to consult levy payers on whether to increase the levy. There is no guarantee in that regard. Ultimately, QMS needs to have a discussion with levy payers about the rates. That is looked at and considered annually.

Good morning, and thank you for inviting me to speak about the Quality Meat Scotland (Amendment) Order 2023. The Quality Meat Scotland Order 2008 makes provision about the constitution and function of Quality Meat Scotland and specifies the rules on the rates for the red meat levy. The rates that are included in the order are the maximum rates that can be charged, and QMS sets the payable levies annually, with my approval, within those ceilings. The order stipulates that QMS cannot increase the paid levy in excess of the maximum levy rate in the order. Contravention of that requirement would be an offence.

The maximum rates have not been amended since the order was laid in Parliament in 2008. Since then, there has been only one increase in the payable rates. That was in 2010, when the rates increased from £4.57 to £5.50 for cattle, from 67p to 80p for sheep and from £1.05 to £1.26 for pigs. Those figures are for the combined producer and slaughterer levy. That change took the sheep rate to the maximum and left only 9p of headroom on pigs.

Levy income is fundamental to the running of QMS, which provides several functions to the benefit of the red meat sector. I do not have time to cover all of QMS’s activities, but I highlight its marketing of Scotch Beef, Scotch Lamb and Specially Selected pork, which is important for Scotland’s red meat industry and for raising the profile for the export market. It is important to ensure that QMS has the ability, with the agreement of industry, to raise the payable levy if it feels that there is a need to do so, and the draft order amends the Quality Meat Scotland Order 2008 for that purpose. Final approval of any rise in the payable levy is required from ministers.

I reiterate that the maximum levy rates are being raised due to the current payable sheep rates having reached the ceiling that is permitted by the 2008 order and the pig levy being just 9p away from the limit. The changes for which the new Scottish statutory instrument provides will ensure that the 2008 order will meet the sector’s needs for a number of years. Raising the maximum rates in the order does not mean that the payable rates will automatically increase. In giving my approval for any subsequent proposed increase in payable rates, I will have to be satisfied that QMS has fully engaged with levy payers, that stakeholder views have been heard and that the impact of the rise has been considered.

Levy income is fundamental to the running of QMS and I am content that the amendment to the 2008 order is necessary. I hope that my comments have been helpful in setting out the rationale for laying the draft order. I am happy to take any questions that the committee has.

I want to make sure that we are absolutely clear on what we are talking about today. The last thing that I want to do is put a fear into the industry that levy rates will increase to the absolute maximum that is allowed by the ceiling. This is a technical order. We are raising the ceiling; the levy rates are not being increased.

I come back to the fact that any rise in the levy rates is a matter for QMS and its discussions with its levy payers about that. A proposed rise must come to the Scottish ministers for approval. As I have set out, that is an annual process.

It would have been very difficult for us to prepare a BRIA. As you set out, I wrote to the committee to outline why we did not undertake a BRIA. Had we done so, it would have been purely speculative. There is no proposal on the table for an increase in levy rates. We do not know whether such a proposal will be made or what it would be, so it is not possible for us to make a definitive assessment or to say that there would be a direct impact on businesses when we do not know whether the levy will rise.

The roles and responsibilities in relation to that are set out in the legislation. That is why I am appearing before the committee today to give evidence on the order, which is about raising the ceilings. However, I will be more than happy to keep the committee updated. QMS is undertaking engagement across the country through a range of events to discuss the issue of levies, as well as its wider strategy, with industry. That is a discussion that QMS needs to have. We will be informed and approached if it considers raising the levy, and I will be happy to keep the committee updated.

What is key there is who was consulted and the fact that there were follow-up discussions with the two people who responded to the consultation. It is critical that we engage with the people who would be most impacted by the amendment order, who are the processors. There was also a response from NFU Scotland. There were follow-up discussions and meetings with the two organisations to discuss their concerns about the order. Again, this is about their discussions with QMS should the levy rates be raised. We are talking about a technical order and raising the ceilings, and that was the discussion that we had.

Michelle Colquhoun might want to say something further on that.

It was important that we consulted on the raising of the ceiling and that the consultation was, quite rightly, a separate process from consideration of raising the levy, because they are distinct processes. It is important that we set out that process and that we undertook the consultation in the way that we did.

First, QMS is not a Government-funded organisation. The information that you ask for can be interrogated by the committee or by any member of the public in QMS’s audited accounts, which are published annually.

Again, QMS would put a proposal to me and then it would be up to Scottish ministers to agree on it one way or the other. I am just trying to set out how that fits into the overall process.