Chamber and committees

Does either Charlotte Barbour or the Auditor General have anything to add?

It will be interesting.

I appreciate that it is difficult.

Susan Murray, you made a comment, with which I agree strongly, about there being

“greater potential for using procurement as a tool to drive change.”

You make a broad suggestion in your submission, but will you give us a wee bit more flavour of your thinking? You simply mention

“standard environmental and social policy criteria”.

Will you give us a few more examples? The suggestion interests me.

Arguably, then, you are suggesting that there should be more transparency and that there needs to be linkage to various outcomes.

I do not know whether the Auditor General wants to come in on that point. It strikes me as an interesting area.

It is a pleasure to take part in this debate. I thank Rhoda Grant for bringing it to the chamber and for her very good speech.

I have had an interest in taxation issues for a number of years, not only because I have to pay quite a bit of it. Back in 2016, when I was an MP, I was a sponsor of a double taxation treaties bill. The bill sought to right some injustices, such as the fact that if African countries were able to access the corporate taxes that they are due, the money would exceed the total amount of aid supplied by the rest of the world. The bill reached a second reading and, although it was not picked up in full by the UK Government, it brought about some changes.

As has already been highlighted, one problem with the UK tax system as a whole is its complexity and large number of loopholes. There is a huge industry to milk those loopholes, limited resource in Government agencies to plug them and a limited appetite from the UK Government to narrow the tax gap, which stood at £32 billion in 2020-21. I am reminded of the joke about an accountant’s children being told the story of Cinderella and interrupting to ask, “But, Mum, when the pumpkin changed into a golden coach, would that be classed as income or a capital gain?”

Although the Scottish Government has very limited powers over taxation, I applaud its efforts to create a fairer and more efficient taxation system in those areas within its control.

On re-reading Tom Arthur’s excellent Reform Scotland blog post from June of this year on the Government’s framework for tax, I noted that he explained the need for fairness, transparency, engagement and good guardianship. I suspect that those things hark back to the four principles of good taxation that Adam Smith set out in 1776.

One of those principles was fairness, by which Smith meant the ability to pay, and it appears be a guiding light for the framework for tax. Similarly, Smith argued for certainty, by which he meant that taxpayers should be clearly informed about how and why taxes are being levied. In other words, he argued for what we today term transparency. Again, I note that Tom Arthur has taken forward that concern. He knows that there is considerable scope for improvement in that regard, and he has pointed out that 61 per cent of people in Scotland know very little about the tax system. Transparency and fairness are fundamental to further progress. It is fair to say that we are on a journey but we have some way to go before we reach our destination.

A further thought is that it is difficult to conceive of any tax that does not have unintended consequences. That is inevitable, as the way in which individuals respond to tax changes may be very different from the intentions of Government. I am sure that we have all seen examples that we can relate to.

My concerns about the world that we live in include concerns about the growth of shell firms and, not least, the massive abuse enabled by the existence of Scottish limited partnerships—which, despite huge efforts over the years, the UK Government, which is responsible for the relevant legislation, has steadfastly refused to reform.

We are making progress, but we have a huge way to go.

I have just one more question before Christopher Kerr comes in. Does the scenario that you have just described in which a problem is discovered later on have a much greater impact, because recourse for customers or clients has diminished over time?

I have some questions about the backlog, which is a matter that I expect other members will want to come in on, too.

When you previously appeared before the committee and were asked about the backlog and how long it would take to clear, you said:

“three years”

or

“a little bit longer”—[Official Report, Economy and Fair Work Committee, 2 March 2022; c 10.]

You will have seen the letter from Mr Keith Robertson in which he has extrapolated some figures and—most critical of all—suggests that some cases lodged in 2017 will take 11 years to complete. First, where is Mr Robertson wrong? Indeed, is he wrong?

Yes, we are quite pushed for time.

If the convener agrees, I just want to ask on behalf of the committee whether you can come back to us with an outline of your specific strategy for dealing with cases from 2017 and reflect on what threads of that will influence your strategy for dealing with backlog cases from subsequent years. I do not accept the sort of revisionist approach that suggests that by getting rid of the term “backlog”, you can get rid of the backlog itself. If some of these historic cases are not dealt with, it could be “catastrophic”—I agree with Mr Robertson’s assessment here—if a rejection were to occur, hence my asking about your strategy.

Am I correct in understanding that the time period for expedite cases does not include the period of time since they were lodged? Has your process changed?

For the record, then, you are saying that if solicitors who lodged cases in 2017 come to you with a request to expedite, because of the time that they have already taken, you will agree to that.