Chamber and committees

I just want to mention a couple of other wee things before I let others in.

First, on the North Sea, there are a lot of highly paid workers there—71,000 at the last count, I think—who earn more than the Scottish average and pay a lot more in tax than the average person. Is the Scottish Government looking at how the switch to green jobs will impact the tax base in that respect?

I do not want to take up too much of your time, minister, but I just want to ask a second question. Has the Scottish Government looked at the issue of behaviour change? Obviously, if we are short of taxes, Governments will be tempted to put them up. However, if you increase taxes in the short term, you might well dissuade people from investing in or living here and therefore paying their taxes either in the rest of the UK or elsewhere, which means that you effectively lose everything. In that respect, is half a loaf is not better than no bread?

I know that today’s announcement on Cambo, which has been made as a result of rocketing fuel prices and the Russia-Ukraine situation, shows that North Sea oil might have a wee bit more life left in it than we thought, but this is a long-term issue. Behaviour change will always be with us in relation to taxation, so what is the Scottish Government doing about it?

We are talking about the Scottish tax framework, so I just want to see what is Scottish about it. How is it different from the UK framework? It was my understanding that this principled approach was a significant difference, but I would have thought that any legislature anywhere would want to try to make sure that avoidance was minimised when it set a tax. Otherwise, what is the point in setting a tax?

Thanks for that response, but what you have outlined is not really public engagement, is it? It involves stakeholders and people like that. How many will there be at the citizens assembly, for example? A hundred folk?

Is that different from what happens in the UK?

My final question is on similar lines. I am curious as to why the focus is on those three taxes: national insurance, VAT and the remaining element of income tax—in other words, tax on savings and dividend income. Those are quite complicated taxes. I will give an example of a business in Glasgow that supplies another business in Manchester, which then sells something to a guy in Aberdeen. That involves a complex chain of VAT. In previous sessions, our predecessor committees have looked at how difficult that is and where the UK Government would suggest that VAT would accrue to Scotland—or not, as the case may be.

Why have you not picked fuel duty, for example? When people buy fuel, that is in Scotland. Because of the geography of the country, you would probably get a disproportionate amount of it. Excise duty is another possible example. I am pretty sure that, when it comes to tobacco and alcohol receipts, we exceed our 8.3 per cent population share. If we had control of excise duty, we would get a higher proportion of it. Those taxes are much easier to collect. That assumes, of course, that the UK Government would be in any way interested in devolving those taxes.

Why have you picked the priorities that you have picked, when there are other taxes that could be devolved that would be a lot less contentious from the point of view of how they are calculated, would be much easier to deliver and would bring in a higher proportion of revenue?

There are 700,000 Scots living and working in England, not to mention those who are overseas. If we are a strong and growing economy, perhaps fewer people would feel the need to move south or overseas.

That concludes questions from other members of the committee, but I have one or two wee issues to raise.

Biodiversity is one of my great concerns. In the past couple of weeks, I have read in The Economist that, excluding our seas, 96 per cent of the biomass of all vertebrate creatures on earth is either human or the livestock that we raise to feed us. For example, 70 per cent of all bird life on the planet is poultry.

Some of the measures in Sweden with regard to lynx have been touched on. I know that a lot of work is being done to try to restore the Iberian lynx, which was on the verge of extinction.

What more can we do on biodiversity? For example, you have spoken about perhaps up to half of tree plantations being native woodland. We have done a lot in Scotland since the first world war, when our tree cover was down to 2 per cent. That is now up to around 17 or 18 per cent. It is not quite like that of Japan, which is 73 per cent. It has been like that in Japan for centuries because Japan has never denuded its forests. What more can we do to try to restore biodiversity, which has halved worldwide since the 1970s?

Good morning and welcome to the 10th meeting of the Finance and Public Administration Committee in 2022.

Agenda item 1 is an evidence session on environmental fiscal measures for Scotland. The committee will hear from Callum Blackburn, an independent consultant, on the findings of research that was commissioned during session 5 of the Parliament by the Environment, Climate Change and Land Reform Committee and which has recently been completed.

I welcome Mr Blackburn. He will present his findings for approximately 20 minutes and then we will open up the meeting to questions from members.

No, you are fine.

You have talked about overarching issues and the complexity of current fiscal measures. It is important that we ensure that the winners do not win by too much and that the losers do not lose by too much if we are to take people with us, but that can sometimes slow down the pace of change.

I know that John Mason is keen to talk about carbon tax, so I will not ask about that. Do you think that, while resources are being shifted towards net zero solutions, increasing the percentage of the overall tax take can happen only by increasing the amount of tax revenue that is available, or can that be done within the current envelope, broadly speaking?

If we look at the largest area of expenditure, which is on the national health service, we might ask how we can move the service towards net zero without shifting money from patient care to insulating buildings, or whatever. There could be long-term savings, but we would still have to invest in the short term. How can that be done in a practical, pragmatic way, or is it inevitable that the Government will have to increase its overall spend?