Public Audit and Post-legislative Scrutiny Committee

Meeting date: Thursday, June 15, 2017

Official Report 544KB pdf

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National Fraud Initiative

Under agenda item 3, we will take evidence as part of our post-legislative scrutiny of the national fraud initiative. I welcome Derek Mackay, Cabinet Secretary for Finance and the Constitution, and Brian Taylor, senior risk manager at the Scottish Government. I understand that the cabinet secretary would like to make an opening statement before we move to questions.

The good news is that it is a very brief opening statement. I appreciate the opportunity to contribute to the committee’s first piece of post-legislative scrutiny and I appreciate its interest in the effectiveness of the national fraud initiative, which is just one tool that the public sector uses to combat the risk of fraud.

The Scottish Government takes the prevention, detection and investigation of fraud seriously. As well as ensuring that our key financial controls are robust, we work with all public bodies to share fraud prevention information and good practice. All that is underpinned by effective audit arrangements.

For the national fraud initiative, ministers, through legislation, enabled Audit Scotland to carry out data-matching exercises to assist in the prevention and detection of fraud in Scotland. The Cabinet Office oversees the exercise across the UK and is responsible for the effectiveness of the data-matching processes. It is important to review the NFI’s effectiveness and make improvements where possible, to maximise the value of participation.

If, as a result of its scrutiny, the committee makes recommendations that would require statutory amendments, they will be for Scottish ministers to consider and take forward, which we will be happy to do. Other recommendations to improve the effectiveness of the exercise may be for the Cabinet Office, as owners of the data-matching service, or for Audit Scotland, as the facilitator of the process in Scotland. Scottish Government officials will be happy to support the considerations.

I understand that you are willing to take questions on the subject of our earlier evidence session with HMRC, but I ask members to hold them back and start with questions on the national fraud initiative.

In our most recent evidence session on the NFI, I was interested to discover that there is a possibility of real-time pre-transaction checking, which I had no idea was available. There must be advantages to that. If I remember correctly, the NFI is a three-yearly exercise, and it is big. Surely real-time checking could have a huge advantage in eliminating fraud that could otherwise go on for a lengthy period. If I remember correctly, such an approach would cost each local authority less than £2,000. Part of the benefit would be for the Department for Work and Pensions, but part of it would be for councils. Is there a way of introducing real-time checking, sponsored by the Scottish Government?

We support Audit Scotland and local authorities through the general financing, and it is up to those organisations to contribute financially. If there were further recommendations on financing, I would be interested in them. That is an operational matter that we could consider.

Absolutely. The AppCheck service has some restrictions because some of the data that is in it is quite old, but some of it is refreshed every two months and is quite valuable. The Cabinet Office has promoted AppCheck and given it reduced rates. If we were to try to roll something out across Scotland, we would want first to talk to the Cabinet Office about how best to do it, and cost would be part of that. I hope that we could overcome any barrier.

We have made initial arrangements for the Cabinet Office to come to Scotland and help to roll out AppCheck, as it is quite new. We would be absolutely willing to talk to the Cabinet Office about how best to do that. We would consider that in terms of central funding.

Are you saying that discussions are under way and that that is in course?

Yes.

When do you expect that work to be completed?

It is part of the NFI steering group discussions. We last met in October and the next meeting is yet to be scheduled but, on the back of the committee’s evidence sessions, we have been in touch with the Cabinet Office. The Cabinet Office is doing the scheduling, but I cannot say when the next meeting will be.

One thing that arose in the previous evidence session on the NFI is that significant bodies such as housing associations are excluded from it. Are there any thoughts about bringing them on board? I do not know whether that would need legislation or other encouragement.

If the committee thought that that was required, I would be interested in considering it. Current data-matching powers can be used voluntarily. If the sense was that there should be compulsion, I would be interested in that.

A range of measures can be used to prevent fraud, and the Scottish Housing Regulator and others are doing work in which housing associations can already participate. However, the committee might think that compulsion is required to widen the scope.

The difficulty that the committee picked up is that a significant number of housing associations seem almost by default not to participate. Should they be compelled to do so, given that they are such a significant part of the opportunity to eliminate fraud?

There has not been evidence about identified fraud that indicates that such a measure is required. If the committee produces a recommendation on compulsion, I will look at it, but other checks and balances are in place.

The current legislation does not allow for enforcing follow-ups from the NFI. Some of the councils that appeared before us made the point that, when the amount involved is trivial, following up a line of investigation would cost more than would be recouped, so they use their discretion to drop the case. Could there be a benefit in legislating to enforce follow-ups while still giving councils a bit of wriggle room?

The operation is for the organisations and the audit agencies to take forward, but that suggestion is worthy of further consideration.

Down south, the Cabinet Office works on an encouragement basis, and that is Audit Scotland’s approach, too. Audit Scotland tries to get organisations properly engaged, rather than take away organisational flexibility. Resources might be required if follow-ups were enforced.

10:00  

I have two questions, the first of which is on the national fraud initiative. From the evidence that we have taken, the national fraud initiative appears to have been quite effective in reducing instances of fraud, but we can always go further and there is always more to do. As Colin Beattie said, there may be a need to consider compelling organisations such as housing associations to participate. Given the initiative’s success, has the time come to consider widening the remit?

I will give an example. Tuition fees take up a large amount of money every year, as is right. People who are resident in Scotland qualify for getting their tuition fees paid, while people in the rest of the UK do not, but people who live in the European Union do, although some of that will change, policy-wise, after Brexit.

In picking that example, my fundamental point is to ask whether there is a case for employing the national fraud initiative with an extended remit to weed out fraud in other areas, such as tuition fees—if there is fraud there, which we do not know.

That point is helpful. It is hard to quantify the preventative effect of the national fraud initiative or other initiatives. We cannot quantify what fraud has not happened because of the measures. The impact on the Scottish Government so far has been that we have been alerted to a very small amount of fraud risk, which has been investigated and resolved.

We could respond to demands because of risk or potential threat. A huge issue that will be coming our way is social security, and careful consideration will have to be given to whether the data for social security can play into the initiative. It is right to look at risks and ask what is appropriate. Tuition fees have not been identified to us as an issue, but they are worthy of consideration in relation to the remit and the scope of the exercise.

Brian Taylor may be able to say more about risk analysis.

Mr Neil is absolutely right to say that extension of the scope should be considered, although any extension would be not just about adding more and more data but about adding data that will bring about good value and high-risk matches that will be of use to the organisations that participate. Mr Neil is right to say that we should always review what extra data sets should be brought on board, particularly for things such as social security. Tuition fees have not come up, but they might be something that could be included.

We always seem to spend a lot of resources on chasing people at the lower end of the income scale, who rely particularly on social security benefits. I am not justifying fraud, which should be weeded out no matter where it is. However, we criticise the UK Government for spending four or five times as much on identifying and dealing with fraud among alleged social security benefit fraudsters as it spends on tackling tax avoiders and evaders, and maybe we are in danger of making the same mistake.

Maybe we, too, should ensure that there is no fraud of any scale in the programmes that tend to benefit better-off people and middle-class people. I am not suggesting that such fraud is taking place, but I would have thought that, given the amount of money that we are spending not only on tuition fees but on other programmes that dish out a lot of public money to people, we should take as robust an approach to those people as we take to people who are on lower incomes.

You raise an important point. The approach needs to be risk based, but it also needs to be proportionate.

Absolutely, but my point is that it could be time to look at what is proportionate and whether we need to extend the remit to cover other programmes.

In any consideration of extending the remit, proportionality should absolutely be a factor.

I have two questions for the cabinet secretary that arise from the previous evidence session this morning. First, one thing that is clear about the Scottish rate of income tax—or any rate of income tax—is that the level of allowances and reliefs is an important element in deciding the tax take and the economic and behavioural impacts. Is the Scottish Government pressing the UK Government to extend our powers over income tax to cover all aspects of income tax, including reliefs and allowances, which would give us much more power to be innovative in the application of income tax policy north of the border?

That is a substantial reach from the evidence session this morning, but I will allow the cabinet secretary to answer.

Convener, it would be unlike you and Mr Neil to spring any surprises on me that come from earlier evidence.

I am sure that you are fast enough on your feet to deal with that.

That bought me a few seconds to think about how to answer the question.

The simple answer is yes—of course the Scottish Government takes a maximalist position on the devolution of powers and the functions within them. In relation to revenue and debt generation, tax avoidance issues and so on, we have repeatedly made the point that we would welcome more levers and more opportunities to tackle such issues. We have made that point—I have certainly made it to Treasury ministers.

Do we need to step that up a wee bit?

Yes—it is fair to say that on income tax, we will have an opportunity with a new UK Government to set out immediate asks. There is the continuation of the argument on tax collection in Scotland and the decisions that we can take to address some of the anomalies that now exist because of partial control of income tax, for the reasons that you have given. If the committee wished to collectively add to those asks, I would certainly welcome that intervention.

My second question that arises from the previous evidence session relates to the debate about the behavioural impact of any tax changes. There has been a debate about whether to increase the top rate from 45p to 50p. You may or may not have listened to the evidence earlier from the HMRC witnesses, who mentioned their analysis of the one recent year—2010-11—when there was a 50p tax rate. Their analysis clearly showed that there was a substantial behavioural impact for the duration of the extra 5p on the top rate of income tax. What work has the Scottish Government commissioned on the behavioural impacts of any rate changes and in particular on whether the top rate should be raised from 45p to 50p?

Without getting into the political argument on that and the Scottish Government’s position on a Scotland-only change compared with a UK-wide change, I will say that we have commissioned the Council of Economic Advisers to look at the issue and report back in good time for the next budget process. Such a change would be a budget consideration for the Government and therefore the Parliament. The First Minister has asked the Council of Economic Advisers to report back.

Will the report be published?

I have not been asked that before. First, the council will advise ministers. I would want to double-check this, but I think that the evidence was published previously, so I will try to stick with the precedent and do that. While keeping within the parameters of guidance and advice to ministers, I would be happy to share the evidence.

I am not suggesting that the report should be published before the budget—

Exactly.

However, I presume that it would be published with the budget.

I am not sure when the analysis was published last time round but, in the interests of transparency, I would want to publish, while keeping within the protocols for advice to ministers. I think that people would want to see that evidence, would they not?

Is the remit of the Council of Economic Advisers limited to looking at the behavioural impact of increasing the 45p rate? Will a wider piece of work be done that includes any variation in the lower rates?

The remit is specifically to look at the additional rate.

Okay. If we can perhaps stick to looking at the national fraud initiative first, we can come back to this topic—of course, once Alex Neil gets going, it is very difficult to stop him.

I am interested in the cost benefit of the national fraud initiative. We heard in a previous committee meeting about diminishing financial returns from the NFI. Various witnesses have expressed their views about that. Do you have a view, cabinet secretary?

I take you back to my point about it being difficult to quantify the preventative element—the fraud that is not happening and what we have done to discourage fraud. However, if we consider just what we have been able to run through the system and identify as an issue for the Scottish Government, we see amounts ranging from a substantial figure of over £1 billion-worth of transactions down to a payment of just over £10,000 that was identified and successfully recovered. That is the context.

I still believe that the exercise is very worth while. I do not want to overstate our role in it—as legislative enablers of it and participants in it—but we all, I think, see value in its continuation, hence the discussion about extending its scope. It appears to continue to be worth while.

Is there any way to quantify the deterrent effect? The witnesses all gave similar answers, saying that there clearly is a deterrent effect, and I suspect that that is the case, but there must be a way of going at least some way towards quantifying that. Should resource be spent on a more proactive and comprehensive marketing campaign to increase the deterrent value?

That feels more like an operational issue for Audit Scotland and other agencies. I think that there would be concern if we removed the initiative. Of course, many other tools are in place to tackle fraud, but my sense is that removing the NFI would cause more concern than would attempting to promote it. There are other public agencies that could play into it, and more data that could be considered. Brian Taylor can perhaps say more about how he sees risk playing within that. Would that be helpful?

Yes, of course.

Another point about being part of the NFI is that it gives us good assurance on our financial systems. Having our data run through it and having small returns confirms and gives us assurance that our controls are working well.

There is also the deterrent factor that has been mentioned. The difficulty with measuring fraud in the way in which that has been undertaken in the past, such as with the annual fraud indicator, is that an awful lot is based on estimates of fraud. We could do crude comparisons and consider identified fraud against the average figures for organisations, which vary between 5 and 10 per cent. However, I think that the answer is to continue to improve the value of the transactions, so that we get more results for fewer matches wherever that is possible, and, at the same time, to do the promotion work that you talked about, because that is important as well.

Cabinet secretary, you said in your opening remarks that we need to maximise participation—I think that those are the words that you used. One way of doing that, which we discussed at our previous meeting, would be to ensure that when members of the public flag up an issue, they can see the outcome and what happens as a result. I will throw in a question. Could that be considered under current data protection restrictions?

It could be considered. I suppose that anything could be considered, although there are parameters that we have to work within. We could look further at that. Ultimately, each organisation, together with Audit Scotland, which facilitates the initiative, and the Cabinet Office, which oversees it, could produce reports on how they believe it to be working. At the same time, however, do we really want to produce a report every time there is a complaint, and then action and an understanding? As I said, the initiative is one of many tools to tackle fraud.

It could be considered, but I am not sure about the value of publishing too much, particularly bearing in mind the difficulties that you rightly mention around data protection.

I have a final question to pull together the cost benefit piece. In its evidence, Moray Council mentioned 2,800 matches, from which there were 20 positive outcomes. I presume that the cost of getting those outcomes is borne by the local council—or a Scottish agency, if I can put it in that way—but the benefit accrues to the Department for Work and Pensions, as it did in that example. Do you have a view on that? Should we be looking to review that aspect of the NFI?

10:15  

I do not have a strong view. It is in the public interest that all parts of the public sector work together to identify fraud, look at value for money and so on. The figure that I was able to give you for Scottish Government transactions shows that there is still value in having reassurance around our systems and in identifying and addressing not necessarily fraud but duplication. I believe that there is value to the public purse in that work, irrespective of who contributes to it.

Good morning, cabinet secretary. We have heard oral evidence from a number of local authorities, and it surprises me that the exercises are very much set up as standalone exercises. There does not appear to be a way to track and identify repeat offenders.

Earlier this morning, Jim Harra from HMRC said in his evidence that if a person commits fraud in one area, they are likely to commit fraud in another. Do you recognise the limitations in the current system, given the current statutory powers? Could that be addressed through legislative change?

Repeat offending has been identified as an issue. The Cabinet Office is working on that area and I will be interested to see its conclusions. As I said, it is the lead organisation across the UK. If we require legislative change, I am open to that, but the Cabinet Office is leading on that piece of work.

It strikes me from hearing the evidence that we have a really static picture. Obviously we are looking at the data matches retrospectively, but if there is good intelligence in there, it seems that there could be a missed opportunity if people are not proactively using that information.

As I said, I am happy to consider that matter based on your recommendations and the Cabinet Office’s conclusions.

Another issue that came out of the evidence from local authority officers, who are very much at the coalface, is that they appear to be drowning in data, given the sheer volume of data matches and all the other sources of intelligence that they get. They are trying to take a risk-based approach and prioritise. However, when you hear about the number of data matches, are you concerned that there is not enough resource in the system to drill down properly into all that data and try to detect fraud?

Again, we are looking at our specific role in the NFI as a legal enabler and participant. A resource issue in following up on work or engaging with the data has not been identified to me.

As I said, there are a range of ways in which public sector organisations deal with the issue. If you have further evidence around resourcing, I would be interested to hear it, bearing in mind how the audit agencies and other public sector agencies do their jobs and how we fit in with the Cabinet Office and Audit Scotland as a legal enabler.

From the evidence that we have heard, it seems that the teams in local authorities that are dedicated to this work are very small. There are also concerns that there can be delays with other public bodies providing information. That is maybe worth a closer look.

Liam Kerr touched on the data protection aspect of this work. The officer from Aberdeen City Council raised concerns about the public getting frustrated when they provide information and no one can get back to them. Again, that is partly about the volume of work in the system, but it is also about data protection. We understand that data protection laws are in place for very good reasons, not least to protect people’s privacy. However, it seems that there is very little awareness of the national fraud initiative.

I know that you have worked in local government as a councillor. Can you see any simple ways in which, without generating a lot of reports and paperwork, we could keep the public informed, so that they at least feel encouraged to co-operate?

Resource is a matter for each organisation. In local authorities specifically, the size of their internal audit facility or audit function is a matter for them. It is not as if there is central co-ordination of that resource—it is for each organisation to determine. There are specific funding arrangements for Audit Scotland as well, so the resource matter is for it.

I am interested in any recommendations around awareness of the initiative but, again, I respect the Scottish Government’s role in it. We are a legal enabler and a participant. If there is a recommendation that either it or we as a partner should promote it to the public, so be it, but it should be done without raising unnecessary alarm and should give—as you have described—appropriate and proportionate feedback, without creating new bureaucracy and while protecting people’s position in terms of data protection.

My last question is more directly aimed at the Scottish Government. What work is the Government doing to ensure that the new social security powers fit well with the national fraud initiative?

I can go into more detail on the forward planning, but I would also make the point that I touched on earlier about the scale of the data—the number of transactions and of people involved. It will be part of our risk analysis. We know that as a consequence of the social security powers and functions, the Government, through the social security agency, will be doing more transactions in a week than we currently do in a year. We are planning how it might play in and working it into the programme over the next few years. Brian Taylor might have more to say about the operational side.

In forming the social security agency, counter-fraud is being made a key aspect of its programme of work. Comprehensive data matching will be built in, in consideration of the NFI, but the data matching that will be required to make sure that the agency counters fraud effectively will go beyond the NFI.

Will you say something about the anticipated costs? As the cabinet secretary said, there will be a huge additional volume of data. Do you have any figures for the costs of NFI in relation to the social security powers?

I would need to talk to the Cabinet Office and Audit Scotland to see whether there are significant cost implications. From what I am aware of, there should not be, because the system is fast as it is, with 300 million pieces of data in the data pool. I do not think that it would be significantly affected, but I would need to check.

I would like to stick with the issue of repeat offenders, which I raised a couple of weeks ago, cabinet secretary. Like my colleagues around the table, I was surprised to learn that there is no automatic fraud investigation in a second year if fraud was perpetrated in the first year—it is all down to the data sets that are presented for analysis. If someone has attempted to commit a fraud in year 1, why do we not check them in year 2? Are we permitted to do that? I presume that we are—I do not think that we need legislation to do so. Will you clarify the issue?

There are some restrictions on what can be done in terms of profiling. I am not an expert on it, but there are restrictions with regard to what can and cannot be done.

The important point, which has been raised already in the discussions that we have had, will be the extension of UK legislation that will allow the sharing of information with third parties, which would include credit reference agencies as well as agencies that would have information on known fraudsters. That is the way in which we would get to the repeat offending issue that you are talking about and would be able to check the data again. I am not aware of the exact details of the roll-out, but I can get that information and feed it back to the committee.

To be fair, we are waiting for the Cabinet Office’s work on that area to conclude.

Yes, it is doing a pilot exercise.

That is very helpful.

Some councils have said that there is no legal gateway for them to use to request information from HMRC to help with the national fraud initiative and fraud detection. Quite a number of councils said that they would like for there to be one. What would be the mechanism for us to achieve that? Would we have to get agreement from HMRC? Could we compel or require it? How would that work if we wanted to do it?

The restrictions relate to fair and lawful use of the data. With regard to working with HMRC, we would work with the Cabinet Office, which already does a great deal of work with HMRC and the DWP in matching data. We would have to work with Audit Scotland and the Cabinet Office if we wanted to include more HMRC data in the NFI exercise. From those discussions, we would find out whether any additional legislation would be required or whether improvements could be made simply through more effective communication and engagement.

The issue is more that there is no legal mechanism to enable councils to get information if they think that they need it. Even if they made a request, the information would not be forthcoming because there is no legal framework for that. The local authority officers all said that if the model that I mentioned was used, it would be very helpful and would add to the initiative’s success rate.

Yes—I think that the same would be true for the legal gateway issue. We would engage with the Cabinet Office and HMRC. I am not aware of the barriers that have been highlighted. We would absolutely want to understand what those barriers are and what would be required to get over them. For example, we would want to know whether they involve a disagreement on the legal position or whether further legislation would be required.

On data protection—

Sorry—I just want to be clear on that. We are willing to be open. If what Willie Coffey describes is identified as an issue between local authorities and HMRC and it requires a legal remedy, we are open to helping to enable that. However, based on evidence to the committee, there seems to be a dispute around whether there is a legal issue or an issue with implementation.

On wider data protection issues, you will be aware that the European Union regulation on data protection comes into force next May. It will introduce even more stringent arrangements for data sharing and data security. My understanding is that the UK Government, whether or not it leaves the European Union, will sign up to that regulation.

Will the tightening of data security when the regulation comes into force make it harder for us to detect fraud in tax, benefits and social security across the range of agencies that have been mentioned today?

I am not aware of the full implications of those new arrangements. We currently have very stringent controls around data protection and use, so I would not expect the changes to be significant. However, in order to provide a detailed response, we would have to look into the matter further and report back to you.

My last question relates to evidence that we heard earlier this morning. With regard to the accuracy of the data that HMRC holds on the Scottish rate of income tax, are you assured—and what form does the assurance from HMRC to the Scottish Government take—that we have correct and accurate data that enables us to identify Scottish taxpayers?

I am pretty sure that Mr Coffey has asked me that question in the Finance and Constitution Committee as well. We have a range of assurances. There is the political-level agreement; there are arrangements around the fiscal framework and its implementation; and there is engagement between officials. There was a previous issue with not all Scottish income tax payers being identified, but they have all been identified now. HMRC is now doing various checks that it can answer for to assure the Scottish Government and the Parliament that it has identified everyone who should be paying tax in Scotland.

I am as assured as I can be, based on all the information that I have, that HMRC has undertaken a range of exercises to identify everyone, and that there have been further exercises to ensure that that is the case. A substantial number of people were identified further on in the system, but that did not cost any money and it did not lead to us losing any revenue. If I was not assured, I would be raising the matter with the secretary of state, the Chancellor of the Exchequer and other ministers. There is on-going work with officials.

10:30  

The temptation for committee members to move on to consider this morning’s evidence session could not be contained but, as we have now reached the end of those who have indicated that they wanted to ask questions on the national fraud initiative, we will officially move on to consider the evidence that we received this morning from HMRC.

Can I just go back to the national fraud initiative, as I am such a fan? [Laughter.]

I give up.

Monica Lennon can be our champion.

I know that there was some discussion about voluntary participation so I apologise if this question was asked earlier. Should all bodies that spend public money participate and should it be a condition of procurement bids for public projects?

All organisations have fraud and procurement policies and comply with the “Scottish Public Finance Manual”, so there is already a range of checks and balances in place. I am not sure that the data-matching exercise should be compulsory and essential for everyone or for all procurement bids; the approach should be proportionate.

Thank you. I will let go of the NFI now.

Are you sure? This is your last chance. To round off the MFI bit—[Laughter.] Dearie me, it has clearly been a long day.

I very much welcome the fact that the cabinet secretary has been so open to the committee’s recommendations even before we make them. That is a refreshing approach that I commend to other ministers. We will produce a report on our work on the NFI in due course and I look forward to receiving the bits and pieces of information that the cabinet secretary has said that he will provide to the committee.

As committee members have no further questions on this morning’s evidence session with HMRC, I have a couple. We had some interesting discussions about liability for errors that are made and, in relation to the late identification of the 240,000 Scottish taxpayers, the cabinet secretary just said that there was no cost to the Government and no impact on the ultimate tax take. I am curious to know, if there should be an error in the future, what your understanding is of how that would play out with HMRC, particularly if it was HMRC’s error.

I want to come back to the committee on the specific issue of administrative or identification error. There are very detailed and complex arrangements around the block grant adjustment and the reconciliation of the tax that is forecast to be collected from the BGA and the actual outturn of tax, and that is quite different from an administrative error where there has been a fault. We are paying for a function and we want that to be exercised. I will respond in writing on the question of administrative error by our delivery agent and who pays the consequential impact.

That would be very helpful.

I have a set of questions on the issues that Alex Neil touched on. If you are able to publish the Council of Economic Advisers’ work on behavioural impacts, that would be welcome. The Scottish Fiscal Commission will be charged with doing all of that, will it not?

Yes, it will do the forecasts.

Is it true that there was no consideration of behavioural impacts in relation to the Land and Buildings Transaction Tax (Scotland) Act 2013, in which there has been a lot of forestalling?

In terms of its first implementation and creation?

Yes.

That was before my time, so I would need to double-check what was provided to Mr Swinney at the time.

As a member of the then Finance Committee, perhaps I can help you. No behavioural impact assessment was done, which was pointed out by the Scottish Fiscal Commission at that point. We have subsequently seen quite substantial forestalling.

HMRC said that if it knew about a tax coming, it could work proactively to stop unintended consequences and could put in anti-tax avoidance measures—for want of a better phrase—in advance of the tax’s implementation. Is that something that you would want to see as a result of the studies that the Scottish Fiscal Commission will do on behavioural impacts and behavioural changes?

Yes.

So you could anticipate taking out a lot of the potential difficulties by being proactive and putting anti-tax avoidance measures in place in advance.

Yes. The Council of Economic Advisers has been asked to look at whether there is any way of mitigating those issues to be able to change the tax positions. Looking at mitigation measures is part of that consideration.

That is excellent.

As there are no further questions, I thank the cabinet secretary and Mr Taylor for coming to give evidence this morning. We now move into private session.

10:34 Meeting continued in private until 10:54.