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I understand that the titles that we use in the budget sometimes do not do justice to what is involved. You have mentioned a critical part of the budget that, as you have outlined, will support business viability and competitiveness and will ensure that we safeguard employment in rural areas.

The budget heading includes a number of important funds. For example, it includes the Farm Advisory Service, the knowledge transfer and innovation fund, the food processing, marketing and co-operation grant scheme, the crofting agricultural grant scheme and the small farms grant scheme. The budget is providing support and ensuring that there is flexibility around transformation. We are also providing direct increases for a lot of those schemes, which will be critical as we go through the journey of transformation across agriculture, farming and crofting.

There is a provision for financial transactions within that, which supports the quick and early payment of farmers, crofters and land managers. There is quite a lot under the business development heading. Again, a lot of the funds are vital to the transformation programme that will be undertaken.

As I said in a previous response, the overall funding for the three enterprise agencies is at its highest level since 2010. With regard to Highlands and Islands Enterprise, the spending power that it has over the coming financial year has not been reduced. The budget has been protected as far as possible, because—as you said—the enterprise agencies have a particular role in supporting economic recovery across the different parts of Scotland.

The budget allocation was based on the agency’s forecast of its needs—it was the non-cash allocation that was reduced. Shiree Donnelly might be able to come in with more information on what exactly that means. The non-cash budgets are utilised for accounting charges such as the depreciation of assets and the needs that are set based on accounting standards.

The reduction in HIE’s non-cash allocation does not affect its ability to continue its work on improving business and community resilience and protecting and creating jobs. Shiree Donnelly might be able to offer more information on that.

Some of those issues are on-going in the EU, so we continue to monitor them. As members of the EU, we had the potential to set our own policies, and we had the ability to diverge, which did not cause any particular issues. For example, we had specific schemes in Scotland that did not exist elsewhere in the UK. It is those specific schemes, which address the specific constraints and types of land that we have in Scotland, that are now very much under threat as a result of both the United Kingdom Internal Market Act 2020 and the Subsidy Control Bill. There is no getting away from the issues that we face in that regard.

I come back to the common frameworks process. That process helps us to manage divergence, because it is only fair, given that the powers and the responsibility rest with the devolved Administrations, that it is up to those Administrations, which are elected in those countries, to take the policy decisions that work best for the populations that they represent. It is up to me to deliver on the commitments that we have set out in our manifesto and on what we have set out in the programme for government. All that we want is the ability to carry out that work.

As I highlighted in a previous response, agricultural policy is taking a different road in England from the route that we have set out to take in Scotland. We have made different commitments, and that is where the fear of the United Kingdom Internal Market Act 2020 and the Subsidy Control Bill comes in, because those pieces of legislation could well constrain our policy choices in the future.

One of those choices is to maintain direct payments, which the UK Government has said it will phase out. Again, the Subsidy Control Bill could have a serious impact on our ability to do that, or to offer payments through the less favoured area support scheme or some of the coupled support schemes that do not exist elsewhere or in which there might be policy divergence in the future.

It is about those pieces of legislation together. Ultimately, we are finding that it is huge step backwards from being in the EU, where we had those powers and the freedom to exercise those powers in developing our own policy. The 2020 act and the Subsidy Control Bill remove those powers and put them in the hands of UK ministers, which—as I said in previous responses—undermines the common frameworks process. It was designed to resolve, or to try and work through, some of the policy divergence that we will have in some areas, because it is every devolved Government’s right to set the polices that are right for the people who elect it to that position and who deliver on the commitments that it has set out. In essence, the 2020 act and the Subsidy Control Bill remove our ability to do that, because the ultimate end decision rests with the UK Government. That completely undermines the powers that we have in those devolved areas that are of critical importance for devolved Administrations, and it means that the UK Government can overrule us in devolved areas of policy.

Fisheries is a more complex area in relation to the Subsidy Control Bill. I will bring in Caro Cowan on that point.

That is not the case with the Subsidy Control Bill, which will open us up to legal challenge from other parts of the UK if we continue to provide the type of income support that I have talked about, because that conflicts with the principles that have been outlined in the bill. That is where the problem lies.

I would be happy to write to the committee outlining our concerns about specific parts of the bill, if you would find that helpful.

I do not know whether there are particular issues in that regard. Perhaps my officials have further information on food regulation.

That is one area on which I would be happy to follow up with the committee after the meeting.