As much as other members may describe the negotiation as a process in which the UK Government has the whip hand, it involves a two-party signatory agreement where one party can withhold agreement and say that “Until we get more of what we want, we are not going to agree to it”. Although, as David Phillips described, one party might, for very sound reasons, be reluctant to go in a particular direction, it is a two-party agreement.

That takes me to the issue about how rushed some of this feels towards the end. It is a long-term process but it seems like we are now locked into what is described as an agreement for more than 50 years on the basis of trying to deal with a short-term issue in terms of borrowing capabilities to deal with a £1 billion black hole of the Scottish Government’s own making. Is that not part of the risk in the way that the Scottish Government has dealt with this? It has focused on short-term budget priorities and how it can get through this budget year, and has locked us into a process for 50 years as a result.

I believe that the principles that we have talked about in the committee this morning about the devolved institutions in Scotland having economic responsibility to focus more on how we grow the economy and how we get money in people’s pockets to generate the taxes to provide the public services that we need are right, but it is fair to say that, over some years, the institutions have had a good shot at trying to develop robust mechanisms to project and deliver some mechanism by which VAT assignment might be achieved. It does not feel to me that that work is bearing fruit.

When we took evidence about this from HMRC in private, I was less than convinced by its ability to produce reliable forecasts on the basis of survey data and some other indicators alone. There is obviously a stream of activity that it is funding and supporting with a view that this is continued Government policy. I think that we could reasonably ask whether that is money that is being well spent.

My general, broader opinion on that is that I agree with David Phillips about the need to ensure that we have a focus on a broad economy that takes a different form. Rather than taking a very narrow view of one part of the tax base, we need to understand the role of people who are not earning high levels of income, whether that be wealth, whether that be people who are living in relative poverty, whether that be pensioners, students or people at the bottom end of the income scale. We do need to think about how the Government incentives are structured properly to do that. It does not feel to me that this is a practical means to do that at the moment.

In the absence of any real public discussion or parliamentary scrutiny before the agreement and the publication of the report, we are left reading priorities into the text. It seems that the Scottish Government has placed the population dynamics at a higher level of priority than other economic challenges such as low gross value added or longer-term lack of investment in research and development that might be driven by more capital spend. Is it your feeling that it has put the immediacy of those issues ahead of longer-term economic transformation, as it might put it?

Upon which basis decisions are made, I suppose.

The Barnett formula was set in similar circumstances. It was thought that it might be revised within a couple of years but it has existed for decades and we are still unpicking the complexities of it. Mairi Spowage might want to come back to me on that one, but I invite David Phillips to share his thoughts first.

The practical issues that Charlotte Barbour has set out feel huge to me. I have to say that I was far from privy to any of the discussions in the Smith commission, so we will just have to assume some of the motivations in this respect. Perhaps income tax was not felt to be a sufficient indicator of economic performance and, therefore, the desire was to have a basket of different taxes that would be indicative of how Scotland was performing. I am keen to hear people’s views on whether having just the one indicator with regard to income tax performance creates a very limited set of incentives for the Scottish Government and institutions to drive activity in one particular way within our economy and whether that perhaps skews some of the incentives in the way that Government might act.

Paragraph 48 of the financial memorandum states that Zero Waste Scotland has calculated that the cost of implementing the current code of practice will be £88.4 million. Do you know where that figure has come from?

You are making some well-educated assumptions about where the figure has come from, but that information has not been set out to colleagues. You do not have any detail on it. I see shaking heads.

I am conscious that the waste management process in your various councils has changed dramatically over the past decade. You have been through a lot of change processes over that period, and you have described some of those and the changes that you have made.

In layman’s terms—perhaps we will not get a figure—do the costs that have been set out feel realistic? Given your experience of change management and the cost of making those changes, do the costs feel realistic to you?

That is useful. My next question is about the distributional effect. Given what has been said, we do not have clarity on that or an understanding of it. As a Dundonian, I have sympathy with Mr Devine in relation to the challenge of collecting waste in a local authority that has the tightest boundaries in the United Kingdom and where 50 per cent of properties are flatted. Has the Government given any indication that it recognises those challenges? Has there been any discussion with the Government about that?