Chamber and committees

In response to a previous question, I touched on aspects around metrics. I have not yet touched on a point that I referred to in my opening statement, which is that I am keen for the framework to help us to elevate the public discourse on tax. I hope that the committee knows that I am keen to advance transparency, improve engagement and have more substantive discussion across the range of my responsibilities. I know that the committee welcomed the work that was done to prepare the guide to the spring budget revision. That approach informs how I want the framework for tax to be implemented.

The document sets out how the Government will approach tax policy, but it also provides a framework or tool for others to bring forward tax policies, whether that be in the Parliament or among the general public and other stakeholders, such as civic Scotland. I hope that it can help to catalyse a more informed and more reasoned debate about tax, in recognition of the important contribution that tax makes. That is important in the context of the existing powers that we have and in the context of any changes that will emerge via the fiscal framework review or any subsequent devolution.

Along with all the stated objectives of transparency and demonstrating the Government’s commitment to on-going engagement and a culture of continuous improvement, I hope that the document can contribute to providing a strong reference point or a foundation for a more substantive debate about tax. I hope that we all share that view and aspiration.

I appreciate that Revenue Scotland has a role, and it is directly accountable to Parliament.

Okay. I am happy to take that away.

That is a fair point. I am not suggesting that migration is a silver bullet—it is part of a broader range of measures. If we are going to consider intra-UK migration, it is important that we also look at employment levels across the UK. Some of the challenges we face with skills shortages and a tight labour market are not unique to Scotland but are UK wide, which creates challenges in that sphere.

You referred to the high street and the changing nature of retail. As Parliament will be aware, a retail strategy is to be published shortly, so I cannot pre-empt that, but it has grown out of a piece of work that was done in collaboration with business, academia, trade unions, the third sector and the public sector. We are also undertaking work in partnership with the Convention of Scottish Local Authorities on our updated town centre action plan, which came out of an independent review.

As for the policy interventions that Government can make, whether they be in the national strategy on economic transformation, the retail strategy, our town centre action plan or, in the longer term, national planning framework 4 and the work we are seeking to do on the planning system, we can pull a range of policy levers, but there is no single lever that can address all those issues in one fell swoop. I hope that that captures my point that although there is a range of different initiatives, there are, ultimately, limits to what we can do with the existing suite of powers that we have at our disposal. The main macroeconomic levers, employment law and so on are still reserved to Westminster, so we have to operate within those limitations.

The question that you have asked goes much broader than the framework for tax, which is what we are considering at this meeting. A broader range of work is going on that will ultimately help increase productivity and prosperity in a way that will translate into earnings and increased tax take.

At this point, we are working at pace on that.

No—the can is not being kicked down the road. I am not yet in a position to announce timescales but, when I am, I will make sure that the Parliament is the first to know.

I will split that into two parts. First, obviously, we are under a statutory obligation to use the SFC forecast for our budget, so we need to do that.

The broader point is about economic data and how it can inform economic policy, by providing more granular data on particular sectors, regional breakdowns and so on. Ideas in that regard have surfaced and been explored during this morning’s meeting. Ultimately, in the context of a resource spending review, we have to make assumptions. In the budget setting process, we have to use what the SFC gives us. We also depend on the decisions that are taken in the UK Parliament.

We could certainly engage in our own independent forecasting, but in essence that would duplicate work that has already taken place. The question is what added value such additional forecasting beyond the numbers that the SFC gives us would bring, and how much additional work would be required to inform policy making decisions.

Have I understood you correctly?

That is an excellent set of questions. I am trying to think of a way that I can answer them concisely in 90 seconds or a couple of minutes.

With regard to behaviour change, there is the principle of efficiency. We do not want tax policy that leads to distortionary effects, because that will ultimately undermine the objective of revenue raising. That is built in as a well-understood principle—it was in the Scottish approach to taxation and it is one of the Adam Smith principles. Indeed, efficiency and being conscious of the impact of behaviour change are part of the six key principles.

The North Sea situation fundamentally comes down to the just transition. The workers involved are highly skilled and, in the transition away from oil and gas, the task that we face is to retain their skill sets and deploy them in the emerging technologies in renewables and the wider green economy. To that end, there is support through the commitment of £500 million of investment to the north-east and through a wide range of other interventions in the employability sphere, such as the national transition training fund.

The task is to grow highly skilled and highly paid jobs in the green economy. That will absorb many of the skilled workers and much of the talent, as opportunities in oil and gas decline with the decline in the resource and the industry in the coming decades. The aim is for the just transition to allow such workers to transition into opportunities in emerging renewables areas, which have the potential to offer highly skilled and highly paid jobs that will compensate for the loss of jobs in the oil and gas industry.

We recognise that there is a process of legislating and a process of implementation, and that going from where we are now to a fully embedded and operational new system would go beyond the lifetime of this session of Parliament. However, the commitment in this session is to do the groundwork at pace to establish the citizens assembly and allow it to be able to report back to Parliament in sufficient time so that Parliament can consider its response.