Chamber and committees

If you do not mind me interrupting, the Agriculture and Rural Communities (Scotland) Bill is a good example, because of the uncertainty of funding. It is more appropriate to concentrate on bills where there is not that same uncertainty. For example, with the National Care Service (Scotland) Bill, I recognise that the bill team and the minister did a lot of work to address our concerns around the FM and so on, but we still face the risk that there will be a considerable uptick in spend that the Parliament and members will have much more limited opportunity to scrutinise. The details that you have outlined were about how you will monitor and the general governance. That may well address your concern, but it does not address our concern as to how we scrutinise things. What risks therein have you articulated and how are you managing them?

Thank you. I want to touch on where we are on the issue of whole-of-Government accounts. In “The 2022/23 audit of the Scottish Government Consolidated Accounts”, the Auditor General said:

“The continuing absence of a full public sector account reduces the transparency and accountability over public spending, assets and liabilities in Scotland.”

It is a fundamental issue. We had a statement of intent in 2016. Where are we now on whole-of-Government accounts?

Thank you. My final question is about an issue on which I want to get a sense of your thinking. I have been doing work to examine the implications, or rather the risks, of looking at some of the work that we need to do to get to net zero in isolation, without taking cognisance of the financial elements. Part of the reason for why we have landed where we have is that while this Parliament can look at the issue from a policy perspective, much of the financial side is reserved. There seems to be a clear mismatch.

I always bring to mind the fact that this is a deeply serious issue. Recently, the Scottish Fiscal Commission, drawing on information from the Office for Budget Responsibility, stated that we can expect the debt to gross domestic product ratio to be at 289 per cent as a result of funding all these projects. How do you think that we will be able to square that off? We will not be able to do it without the money if we end up in a position—as you outlined in relation to the Agriculture and Rural Communities (Scotland) Bill, for example—where we cannot move forward. That is one small example, but it strikes me that the issue is one that is not being talked about much. We will not be able to make progress on it without considering the financial structuring and so on.

I have a couple more questions—thank you for bearing with me. I would like to get a sense of things in the light of the new governmental structure and the new ministers—I am thinking, in particular, of Ivan McKee. Have you had any discussions thus far about public sector reform? Have you been given a steer on what he might be looking to do, given that we have all recognised that public sector reform needs to be undertaken? For example, the number of quangos that we have seems way out of kilter with the wider fiscal environment. Have you managed to have any initial discussions about what is intended?

Good morning, and thank you for joining us. I will pick up on a couple of points that the convener has already asked about. I, too, seem to have a marginal sign of a misspent weekend in terms of going through the bill handbook and specifically looking at what is stated on financial memorandums. The point is about what, not how. To return to Jackie McAllister’s comment about training, I personally would be interested in hearing more detail about the new training that is planned and what gaps you are seeing being filled. It is a specialism, and the committee has twigged that people have not been across this in the way that they should have been.

Thinking about framework bills, which we have also touched on, the permanent secretary made a comment about the use of agile methodologies and how that can impact on the rigour of the numbers that are provided. I want to understand how you manage the risk. In using framework bills, there is a risk that any figures provided, even if we have much better quality of FMs, will be fundamentally out of sync. I would appreciate your comments on how you are addressing that in the light of significant public sector constraints.

Thank you very much. That is very clear.

The fundamental point is that in no way will that scrutiny be to the same level of detail as the committee would apply on an FM up front. We often go through things line by line and say, “This is what it started off at, and this is now what it has arrived at.” That is exactly my point. How are you assessing, managing and mitigating the risk of a diminished amount of parliamentary scrutiny once we have been through the process? Setting aside some of the issues with that particular FM, the point applies generally when you are using agile methodologies. From your response, I am not entirely clear exactly how you are assessing, quantifying and mitigating that risk from a parliamentary perspective.

It falls to me to shed the last beam of light from the Scottish National Party back benches, so I will try my best. First, I extend my thanks for the thorough way in which the minister has carried out his duties. I always have confidence that he is across his brief and well prepared as he appears in front of the FPA Committee. Secondly, I thank Revenue Scotland, which always exudes a certain joy about its role of robust tax collection.

I will comment briefly on some of the themes that have already been covered. First, the potential take for this tax is very low, assuming that the rate remains the same. Even if it reaches the top estimate of £61 million, we must bear in mind that that will be treated as part of the block grant adjustment via the fiscal framework. I suspect that the cost of set-up will far outweigh any benefit, and, in common with my colleague John Mason, I have to comment on how costs have been allocated. The Scottish Government having to reimburse the UK Government for switching off UKAL and bearing the costs of set-up is another example of heads Westminster wins, tails Scotland loses.

I fear that the levy is a bit of a tinkering tax that will have only a limited ability to make a difference, be it in driving forward a circular economy, in tax take or in changing consumer behaviour. I can sense that that view is shared by Opposition parties, yet we are all going along with it—so, it is all good so far.

My second comment is about data, which has already been referenced by others. We do not know how many quarries we have, a certain percentage of them appear not to be paying UK tax at all, we have no Scottish disaggregated data from HMRC, and the mechanisms for collecting the data are very uncertain. The committee’s stage 1 report notes:

“While we understand the current limitations with regards to the availability of disaggregated data for the UKAL in Scotland, the Committee is strongly of the view that such data is needed in order to establish the tax elasticity and enable future governments to set an appropriate rate of tax that will achieve the above stated aims while effectively managing the challenges and risks of behavioural change.”

That is an important comment, albeit a slightly technical one, and I certainly agree. Data is something that we lack in Scotland. Just recently, I wrote to the Office for National Statistics to inquire how we can access Scotland-specific data for the likes of inflation according to the consumer prices index or even those areas that are provided as inputs to CPI inflation. I fear that our Scottish Government is having to make financial decisions based on guesswork, and that cannot be acceptable.

My second theme concerns unregistered quarries, or so-called pop-up quarries, with materials taken from fields. The stage 1 report notes that “this could be significant.” Section 8(5) of the bill seeks to deal with that position, and it states that, where there is a supply chain arising from an agreement to supply aggregate, every person in that chain

“is liable to pay the total amount of tax chargeable on the quantity of aggregate as a result of the agreement, unless”

they have acquired the aggregate from a supplier who is registered for tax. That can only involve significant effort, including visits to sites. Revenue Scotland appeared confident that it could make a difference in that regard, but that remains to be seen.

My final observation concerns the opportunity to encourage the use of secondary aggregates. MPA Scotland stated that the UK has

“seen continued growth in the use of recycled materials and secondary aggregates”

and noted the indication that

“89 per cent of secondary and recycled aggregates are being used within the market.”—[Official Report, Finance and Public Administration Committee, 5 March 2024; c 34.]

There is still much that is unknown in this matter, however, and we are clearly some way from utilising the legislation to help improve a circular economy.

Arguably, the UK Government should be using such measures much more frequently. I am on record commenting in this Parliament that an estimated £262 billion is lost to UK gross domestic product every year as a result of tax avoidance, money laundering and so on, which I think rather puts that into context.

Arguably, the UK Government should be using such measures much more frequently. I am on record commenting in this Parliament that an estimated £262 billion is lost to UK gross domestic product every year as a result of tax avoidance, money laundering and so on, which I think rather puts that into context.