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That is not an unusual approach. We take that approach with other consultations when we need to consult and hear from specific interests. Just to be clear, the consultation was about the ceiling and not about an increase in the levy, which is a discussion that QMS needs to have with the levy payers.

Again, this is about future proofing the ceiling for years to come. QMS used a certain methodology in considering what the appropriate ceiling rates might be. Michelle Colquhoun might be able to say a bit more about that. We considered the consumer prices index, the retail prices index and the agricultural price index. We looked at the averages for the past 10 years and how they have changed, and we looked at how the ceiling could be future proofed for the next 10 years, at least, to give flexibility. Again, this is all about the ceiling and not what any rate might be.

QMS is not the only agency that is going through this process. The same discussions are taking place across the rest of the UK, including in England and Wales, where the agencies are looking at the ceiling rates for their levies.

As I highlighted, there have been a number of challenges over the past few years. We have seen inflation soar, which is why it is important that we are considering the matter now, especially as the levy for sheep is at the ceiling and the levy for pigs is only 9p away from the maximum. That leaves no leeway should QMS, in discussion with the levy payers, decide that there needs to be a change to the levy to enable it to carry out its activities. The levy is fundamental to the running of the organisation.

It is not. That is why the levy is so critical. The levy is considered annually. It has to come to the Scottish ministers for approval even when there is no change, and that process will continue. When the levy comes forward for consideration, I would expect QMS to consult the levy payers before it proposes an increase—should it, in fact, propose one. I would expect to see evidence of that consultation that shows how QMS has engaged with stakeholders. I understand that QMS has already begun that consultation and is running a roadshow across the country to discuss both strategy and the levy. I will continue to take an interest in those discussions before any proposals are put to me.

I would be happy to provide that. If you want me to list them now, I have that information here, but I would also be happy to follow up in writing.

As I have said, we followed up with the NFUS and the SAMW. Michelle Colquhoun can explain any further correspondence that we had with other organisations.

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.