Chamber and committees

That is helpful. However, the crux of my question is that Glasgow and Edinburgh have already introduced low-emission zones—I appreciate that they were controversial, and I hope that they are serving their intended purpose—but other measures were afforded to local authorities in the 2019 act. Some of us sat around the table and progressed that legislation—or, indeed, opposed bits of it—so I know that things such as the workplace parking levy and the ability to create boundaries around towns for congestion or pay-as-you-go charges were not introduced. It seems to me that the only measures that local authorities want to be introduced are enhancement of the low-emission zones or another form of pay-as-you-go scheme. What has happened over the past six years that has prevented local authorities from doing that? Why are they going back to the Government and asking for more powers?

I have a wider question. Why are the councils that want more powers to implement more car reduction measures not using the measures that were afforded to them in the Transport (Scotland) Act 2019?

I will let you take a break from answering questions, cabinet secretary, as I know that you are finding it tough to speak because you are not well. I will direct my next questions to Transport Scotland.

While I am talking about the target, I want to pick up on some of the statistics, as data is obviously important. In her opening statement, the cabinet secretary talked about 2022 data. The first question is, why is there no data for 2023 or 2024? Is that in production? Also, did the cabinet secretary say that car use or domestic transport accounted for 39 per cent of all transport emissions, and was it cars or domestic transport that accounted for 12.4 per cent of all emissions? Colin Beattie picked up on that point earlier, and I want to be clear on what the numbers are.

That says to me that the bigger issue is other forms of transport, which are emitting more. What is being done to reduce those emissions?

That is interesting. Does that not demonstrate, though, that the potential tax income that could have been achieved through divergence is £3.367 billion? That is what the table is sort of saying; it is not saying what was actually paid but what the maximum potential was. The bottom line is that we actually get £0.6 billion in extra revenue from the divergence, which is only 20 per cent of the overall £3.3 billion. I am trying to get my head around where the 80 per cent loss is happening.

Just to be clear, I am not talking about a race to the bottom. I do not want other parts of the UK to perform poorly relative to Scotland just so that we can say we are doing better. I am sure that we all want it to be true that every extra penny that is spent on additional taxes in Scotland creates more opportunity for the Scottish Government to spend money on public services. Surely that has to be a shared ambition.

What we are trying to unearth through these sessions is what is causing that difference. What percentage of every pound of additional tax that is spent achieves a net benefit to the Government? We are trying to unearth some of that.

For example, if we compare Scottish gross domestic product per capita to that in the rest of the UK, we can see that it was consistently lower for a long period of time. Levels of economic inactivity in the working-age population have been higher in Scotland than in other parts of the UK, and the SFC’s analysis from last year shows that Scotland’s working-age population is growing more slowly than that in the rest of the UK. There are therefore a number of factors. You have picked out a couple in which there have been some improvements and I am happy to hear that, but there are other areas in which there are major factors that mean that we are not achieving the sort of economic performance that we need to make sure that all that tax money comes back to the Scottish Government.

In the interests of time, this will be my last question. It is for HMRC, which cannot get away lightly from this evidence session.

I turn to page 23 of the Audit General’s report. I was struck by a piece of commentary about migration trends and tax policy, and I wonder whether you could comment on it. Paragraph 80 states:

“HMRC says it cannot draw conclusions about whether migration trends were affected by income tax policy as it does not know what level of migration would have been expected without any divergence in tax policy.”

Surely that is a fundamental flaw in the analysis of tax divergence. How can the Scottish Government make appropriate decisions about tax divergence if it does not know what effect it is having on inward or outward migration?

Thank you very much for that answer.

Exhibit 3 says that the additional tax paid due to tax policy differences came to £3.367 billion. However, you are saying that that is not additional tax paid due to tax differences. Either you are correct or the Auditor General is correct—I am not sure which.

I will interrupt you in the interests of time—it has been a long session already. My questions are about economic performance differentials in Scotland. I am hearing that the economy in London is different from that in Edinburgh. We understand and accept that. We understand that the block grant adjustments alter the amount of money that the Scottish Government gets and that different regions of the UK will have different economic activities. However, I am trying to understand the bigger picture.

Are there issues? Is there, as the Audit Scotland report highlighted, an underwhelming economic performance in Scotland relative to that in the rest of the UK, and does that affect how much money the Scottish Government has to spend? That is the underlying point that I made in the original question. It is not a trick question; I am just using the data that is in front of me.

Let us look at this financial year. The SFC has done some work on the 2025-26 forecast. It estimates that £1.676 billion in additional revenue will be generated through tax divergence in Scotland. That is great and I am sure that the Government will say that it is bringing in extra money. However, the SFC forecasts that it will result in only a net £837 million in cash to the Scottish Government, so that is about half.

Scottish taxpayers are paying more in tax but that is not generating the same amounts of money for the Government to spend on public services as we all want it to do. Is that because of relative economic performance differences between Scotland and the rest of the UK?