 It's just about to kick off. Good morning and welcome to the third meeting in 2021 of the finance and public administration committee. The first item on our agenda is to take evidence as part of a pre-budget scrutiny of Scotland's public finances in 2022-23 and the impact of Covid-19. We hear from two separate sets of witnesses today with the first panel consisting of Pauli Tolley, director of impact, citizens advice Scotland, Laura Mahon, deputy chief executive, alcohol focus Scotland, Aram Stakura, head of policy and communications, Age Scotland, and John Dickie, director of child poverty action group in Scotland, who I'm delighted is able to be with us in the room today. The majority of witnesses for this session are joining us remotely, so if members wish to ask a question of a specific witness, please make this clear and allow for a brief pause to our broadcasting team to activate their microphones. I'll aim to give each witness a chance to respond to questions, but if any of you wish to reply to a specific point, please indicate to me in the clerks by raising your hand and typing R into the chat function when the BlueJeans software package. Of course, not everyone has to answer every question. It may be that some questions are directed only to specific witnesses. I intend to allow 75 minutes for this and members have received copies of the written submissions provided by each of our witnesses, along with a summary of evidence from the Financial Security Unit in the Scottish Parliament Information Centre. I welcome our witnesses to the meeting. I would like to start this question by asking John, who is here, I suppose. People get the first question. That's not necessarily a good thing, John, when you've heard the question. One of the things that you've talked of in your excellent submission—I have to say that the quality of submissions has been first class—lots of detail in it. There's one or two things that I would like to have seen added to that, and I'm going to touch on that just now. You've said to question one, John, that children who grew up in poverty are more likely to experience chronic ill health, poor mental health or behavioural and emotional problems and do less well in school, and they are more affluent peers. You talk about the need for preventative spend. The committee has, over many years, looked at prevention, and we have had many excellent ideas that come forward in terms of prevention. In your paper, you have named a number of them, but Spice has also come to us in this session. I have said that I am quoting Professor Graham Roy, the Dean of External Engagement at the University of Glasgow. It is clear that budgets are going to be tight, not just in 2022-23, but for the rest of the Parliament with demand likely to have outstrip funding available. He goes on to add that tough spending and taxation choices await as the extremely high levels of debt undertaken by the UK Government are addressed. We're in a situation, John, and this is also to our other witnesses who will be asking similar questions too soon. How do we deliver the kind of priorities that the Child Poverty Action Group wants to see? How do we deliver that prevention? For example, the difficulty that we had previously was not thinking about how we can spend money on prevention, but how do we and where can we disinvest in other areas that perhaps are not delivering on the targets that you and others would like to see? We're very aware that times are challenging, that budgets are under pressure. I will pick up on Professor Roy's evidence. As he went on to say, the fact that budgets will be tight makes it even more important that budget decisions and the budget process focuses and prioritises what are the key outcomes that this Parliament and this Government want to achieve. We have the First Minister saying that ending child poverty is a national mission. We have this Parliament having set child poverty targets in the last Parliament requiring ministers to ensure that fewer than 18 per cent of children are living in poverty by 23, 24, so within this session just two budget processes away. That gives us a framework into which to focus how we prioritise resources. Those are very clear outcomes that the Parliament and the Government have set themselves very well. It is then about how we ensure that those targets are met and that that mission is achieved or that we make significant progress towards achieving that mission. In terms of preventing those costs of child poverty, there is extraordinary damage to individual children and families in terms of the health, education outcomes that are put at risk as a result of growing up in poverty. There is a huge cost to us all. Across the UK, a few years ago, we commissioned work that estimated that the cost of child poverty was £29 billion a year. The costs of not investing now to reduce those levels of poverty are significant. That is the framework in which we need to think about how we focus resources on tackling poverty. The other key point that we would make is that there is no route to achieving the interim child poverty targets—the target to reduce child poverty to less than 18 per cent by 23 to 24 per cent. That does not involve significantly increasing the value of the Scottish child payment, which is why we are saying that that needs to be the number one priority for this budget. It is at the very least doubling the Scottish child payment if we are going to make real progress towards delivering and achieving that interim child poverty target. There are difficult decisions to be made, but the Parliament and the Government have very clearly said that those are priorities. That is where we need to see the budget and budget decisions focus on ensuring that resources are put into achieving those outcomes that have been set. In the short to medium term, there is no question that investing more in Scotland's social security and the Scottish child payment is the key mechanism to ensuring that that target and those outcomes are delivered. Assuming that we all accept that—I think that you have made a very good argument for that in your paper—how do we do that? If we have a very tight financial situation, everyone is going to suggest and everyone has suggested in all the submissions that additional money should be spent in their particular area, but where can we disinvest? Where is money being spent in the Scottish budget that could perhaps be moved into this particular area? I understand that doubling the child payment will cost about £163 million, which will have to come directly from Scottish resources, so what is not going to be panic consequentials in anything of that nature. That has always been the difficulty. Where do we disinvest in order to invest more effectively in the areas that you and others are suggesting today? Or do we increase taxation? If so, who would pay the additional taxation? How much would it be? What we are trying to do here is to present a report to ministers with strong arguments rather than just an argument that says that this is really important and that more money should be spent? Everyone is going to say that. I do not think that it is our job to find very specific additional budgets and pull money away from that. What I would say is that we need to look across budget headings and portfolios to look at where investment can come from. As you highlighted in your question, the costs of child poverty are borne by health spending, education spending and so on, so that is not just about a social justice spend. That should be seen in terms of being an education spend, a health spend and a spend that looks across portfolios and looks at what contribution could be made to pulling the policy levers that are going to make the biggest impact in reducing and preventing child poverty. The scale of some of the things that you suggested is very significant. For example, you have talked about increasing childcare to 50 hours as soon as possible for children aged six months to five years. There are two issues about that. One would be the cost of that, but certainly the availability of people to actually deliver it on the ground, i.e. the staff who would actually work in such nurseries, for example, as well as the need to expand childcare provision through bigger nurseries, if you want to be direct about it. Over what kind of time period is CPEG, although you have said the early spot of possible opportunity, what kind of time period do you see that being delivered? Obviously, we just had a big boost to early learning provision as of last month. Just about every local authority in Scotland was delivering on that for 30 hours, so what kind of timescale are we really thinking about there? How would you like to see that? I think that that is a direction of travel and a medium to longer term. Building on the very welcome 1140 hours, ensuring that that has been delivered in a way that is flexible, that enables parents to take up the work opportunities that are available, to take up the hours that are available that fits with their needs and that reaches those families who are struggling on the lowest incomes. We need to make sure that we are delivering the existing offer in a way that is accessible and includes those families, those children who most need it. Building on that is a job for us over the course of the Parliament. I think that thinking towards this Parliament and the 2030 targets, we need to think about what resources the Parliament has and whether the Government has it. It is disposable and looks to a longer term at both spending but at tax powers as well. One of our clear calls in the immediate term is to review the tax powers that the Parliament has at its disposal to look at how those can be used in a way that will contribute to that objective, to that statutory legal target of reducing child poverty to less than 10 per cent by 2030. The short term, most immediate priority calls that we are calling for—the doubling of the Scottish child payment at the very least—is the kind of resources that can be found within existing budget envelope that the Government has by making, by looking across portfolio, by looking at how investment can contribute to reducing costs of poor health outcomes, poor education outcomes and so on. However, in the longer term, there is a question mark and we need to look at what levers on the taxation side, the revenue side as well as on the spending side and whether the Parliament and the Government have it at its disposal to ensure that we achieve that longer term goal on child poverty, which will require, as you are saying, significant investment in childcare, housing and so on. Thank you. I am sure that others will want to explore that further. On Laura, you have made one or two suggestions that can be implemented without, for example, costing money such as increasing the unit price of alcohol. That is an obvious one in terms of prevention in that regard. You also want to talk about a public health supplement to non-domestic business rates applied to retailers licensed to sell alcohol and linked to volume of sales and the creation of a new local public health tax that applies a levy to the sale of alcohol in the off-trade. How do you see that being delivered if it was to be implemented? How much money would it raise? When you say volume of sales, what volume of sales are you talking about? Is it just basically 5p for every bottle of spirits or is it going to be something at per meterage? Can you explain a bit more about how you feel that would work if it was something that the Scottish Government decided that they wanted to take forward? Yes. What we have presented in the paper are two potential options. One is a public health supplement, a new public health supplement. That is something that the Scottish Government had implemented previously. In 2012, there was a public health supplement introduced to retailers of alcohol and tobacco products, with a rateable value of over £300,000. That really applied to your big supermarkets who were selling alcohol and tobacco. That was a supplement on top of the normal business rates. That ran for three years, and in those three years, that supplement raised £95 million. It was a public health supplement that was intended to raise money on the polluter pays principle, where you are charging a supplement to those businesses that are profiting from the sale of health harming products. The money was to be used to fund preventative public health measures. It was removed after three years, probably because there was not a clear link between the money that was being raised and where it was being spent. We think that that is a pretty good model. We have an example of it being implemented in the past, and we have seen the level of revenue that it could potentially raise. The argument that we are making in the paper, and more broadly, outside of the evidence session, is that we are asking for an operating of the minimum unit price. The minimum unit price is currently set at £50 per unit, but as everybody knows, that policy was delayed in terms of its implementation by about six years, and by the time it was implemented, that minimum unit price, the potential of that price, had been eroded quite significantly simply by inflation. We are asking for the Government to look to operate that unit price to £65 per unit to maximise the benefits of that policy, which we had already prior to the pandemic started to see having a positive effect on consumption levels and harm levels. At a £65 per unit level, it would have a much greater beneficial effect on alcohol harm, but it would also increase the profits of the retailers who are selling alcohol. At a £50 per unit rate, it was estimated that the off-trade would see a 9.6 per cent increase in their retail profit from alcohol. At a £65 per unit level, we would expect to see greater profit, and at the moment, that profit is simply being held by the retailers themselves. The introduction of some kind of public health supplement or an alcohol harm tax would enable the Government to pull back some of that profit, using that pull-stir pays principle, to raise much-needed revenue at the moment, to provide funding for preventative and treatment services, which is what we are suggesting in that paper. The public health supplement would be a supplement on business rates, and it would be up to the Parliament to decide who that would apply to. We are arguing that the previous supplement that only applied to those big retailers, we do not think that there is an argument to limit it to those big retailers because anybody who is selling, promoting the sale of alcohol, is profiting from that sale significantly. The alcohol harm tax that we have also proposed is a slightly different locally raised tax, which would be based on the volume of alcohol sold per retailer. It is a slightly different model, and it would more directly link the revenue raised to the sale of alcohol. We see that as quite a positive model, because it would potentially undo some of the incentive for retailers to continue to promote and sell alcohol, which is something that we are beginning to see happen—a kind of disincentivisation of using alcohol as a loss leader in your retail model. There are two slightly different models of revenue-raising, both with significant benefits. I do not think that we necessarily have a preference. The alcohol harm tax, from our point of view, would have the additional benefit of giving us access to much-needed data and information that we currently cannot get on alcohol sales. At the moment, we have to rely on bits and pieces of data and information about sales to try to get a complete picture of what we are looking at, but it is always incomplete and lacking in detail. The additional benefit, from our point of view, of an alcohol harm tax is that it should release that alcohol sales data, which enables us to get a much clearer picture on levels of consumption, on how that varies in different areas, so that responses can be appropriately targeted. I think that there would be issues about large and small retailers, but that is not something that we do with taxation. Usually, taxation goes into a big pot and ministers decide how it is spent. Obviously, consequentials might go from NHS straight to NHS because that is a political decision that tends to be made. Is it a high-pothecation that you are looking for, very briefly? Not necessarily. What we are arguing for is the taxes to be raised locally and for decisions to be taken locally about where that money is invested and where it is spent. There are issues with high-pothecation, particularly in relation to this type of tax, because you do not want to create a situation where, for example, investment in treatment services and support services for people with alcohol problems is completely reliant on the tax that is raised through the retailing, because then you are just creating a vicious circle where treatment services rely on the sale of alcohol. We would not want to be promoting that. What we are asking is that it is a locally raised tax, with local decisions taken about how it is spent. There needs to be complete transparency about where that money is going, because that was the issue with the previous public health supplement. It did raise significant funds, but it was not clear that those funds were being spent on the preventative public health measures that the supplement had been set out to. Adam, in your submission you again talk about the need for long-term investment in preventing ill health and tackling poverty. You again talk about prevention. You go on to say that the Scottish Government should provide more funding to energy efficiency schemes. Given that we are deliberating over the budget, how much more do you believe that the Scottish Government should invest in such schemes? Secondly, although I will try to do it all once, because I want to let members in, so I am only trying to give everybody one kind of hit here. Secondly, we also say fundamentally that one of the core issues that must be addressed here is appropriately resourcing funding in local authority services, but the argument about that is, unless you mention the specifics of that, is that the Scottish Government will just say, well, we think that it is adequately resourced. We may or may not agree with that, but just to touch on that. Previously, Age Scotland, in terms of, for example, disinvestment, previously Age Scotland to an earlier iteration of this committee where I was also convener, Age Scotland themselves, when Calum Chomsky was in the role that you were in at the moment, or Chomchuk, I should say, Calum Chomchuk, basically said that Age Scotland would support an increase in the age at which people get concessionary travel from 60 to 65, something that Mr Swinney did not agree with at the time, but is that something that Age Scotland still supports? On the last question first, no. The position had changed. That is a good number of years ago. I think that from all the consultation that we have done with older people, even as part of national transport strategy 2, which was extensive in co-ordination with Scottish Government, it really found that keeping the concessionary travel at 60 was what people wanted. It had a big benefit not only for the economy because of looking at older workers, so people are travelling to voluntary opportunities and for caring responsibilities, and also addressing those who are in poverty, of which there are huge numbers of old people in Scotland living in poverty. There is no organisational view that the free bus pass should increase to remain at 60, which is very much our view. Can you make a very good point about the specifics? Sorry, I was just interrupting. The reason that Age Scotland did that was not in a vacuum. It was suggesting that the money could be reinvested in aids for adaptations for older people, so the money would still remain with older people, but it would just be spent on something different as part of the preventative spend. If you do not give money to concessionary travel from 60 to 65-year-olds, you could actually invest it on improving. Mr Swinney did Age Scotland get a bit of a win because, although he did not remove the concessionary fare, he did increase investment that year by 25 per cent in that particular financial year, so there was, I suppose, by suggesting something to invest in, but something better to invest in, then it gave him food for thought. That was the background to that, just in case you think that your predecessor was just suggesting that older people be disadvantaged in some ways, so I apologize for that. I should have said that initially. I am not sure, after all the consultation done with older people on this, that gambling on this budget move would pay off or would be welcome. I understand that entirely. I think that there is a very good line of question that you have there, convener, on the specifics of the budget. Along with John Dick, it is a very difficult position for charities to be in to look line by line and see where that investment is. We absolutely believe that there should be more preventative spend. It is very difficult to track, to make those decisions in tight financial climates, because you might not see the benefit, obviously, measurably or for a long period of time, but with regard to the energy efficiency levels, and this is very much linked to local authorities, we do not have an exact figure in mind, but what we do know and we have discussed it ourselves, convener, with regard to the interlink fire and smoke alarms, is the requirement of Government policies that are enacted and then enforced and supported by local authority. Sometimes the policy decision is not matched necessarily with what might be required in reality, and that is a particular policy, while we agree entirely with the home safety measures, we do think that there are going to be challenges for those in very low income, so the decision made and the knock-on impact is for somebody else. We are in a tricky situation where I do not have an exact figure here to say or to say let us disinvest, but I am looking in the broader sense as well. It is how the money is spent in different areas. Let us look at health and social care, for instance, whereby in a preventative measure where integrated joint boards and health and social partnerships are meant to work, having more spend in that community from that central pot to help to avoid people going to hospital in the first place, which is particularly expensive and not what anybody wants. It is more operational and decisions are made within the budget of how or where that money will go, but it is a difficult spot to say that we should stop spending that and spend it on that, because it does not always work that way. I know that we are in a difficult financial situation, but the preventative spend concept agenda is about that longer term. There will always be reasons not to do it, but we are in a difficult financial situation. The SFHA said that it would cost £6 billion to retrofit the homes for energy efficiency, so it is one of those long-term issues. I am keen to let members in, but I realise that with a panel of four it is sometimes difficult to ensure that everybody gets an equal hit in terms of responding. Pauline, you have said in your submission that you have talked about non-repayable grants in county stack rail, but it is being popular. I suppose that it is always popular if people are being given additional funds. You talk about advice provision to protect and, if possible, enhance a preventive measure. Prevention seems to be a fundamental part of what you are saying. You have got it in your paper, but, before the record, can you give a wee bit more detail on how much additional advice provision you would like to see, because you have talked about a £16 return for every pound invested in course services? You have also touched on the removal of the £20 a week increase in universal credit that was brought in for the pandemic and the impact that that could have. In terms of the preventive spend, we saw that, last year, during the pandemic, the citizens advice network unlocked nearly £147 billion in financial gain for 171,000 people. That is money through saving on jets or through accessing social security that goes back into people's pockets to be spent in communities across Scotland. Beyond that, we commissioned analysis to shows that provided by a network that was worth £245 million to Scotland the previous year, and that is in things such as savings and public services such as the NHS, and that is by effectively solving problems for people before they escalate to the point where they need social services for more intensive support. We are firmly of the view that investing in advice services is efficient and effective at this point in time, but, as others, it is really hard to measure, but, for us, we believe that it makes sense. We are worried about universal credit. We are worried about what is going to happen over the autumn. There is the £20 reduction that is coming off soon. For those who are winding down, we are seeing an increase in energy prices for consumers, and all of those are a bit of a perfect storm when it comes to people able to manage their household projects. Even as far back as May, one in seven people that we polled or that you have polled on our behalf indicated that they were struggling on their present income. For us, on low incomes, there has to be a priority. I cannot tell you alongside other families where that money should come from, but considering outcomes when making decisions about and deliberating on where money should be spent would be something that we would absolutely ask for. Just one final point. In terms of advice services as additional resources to go in, what is the optimum additional sum that you would seek in order to provide the maximum benefit? Obviously, the fund is unlimited and you will get a law of diminishing returns at some point, so what is a reasonable and realistic increased advice service that will bring the most return in terms of the assistance that you provide? We have not actually calculated that, so I am not able to answer that question. For us, it is about ensuring that there is sufficient say in the system and, certainly, measures such as increasing advice from the Scottish Government are at the moment a closed system at that capacity. We are concerned about the potential for increased demand and not being able to support that. We have seen a significant growth in people using our services, £2.5 million last year, using our digital advice site, which shows that there is an increasing need, but we have not put a figure on that at this point in time. I will now open up questions from the committee, and it will be John Fall by Liz. John, can you clarify what your understanding is of the cost of doubling the child payment? The convener mentioned £163 million. I also saw a figure mentioned for £220 million, which would be if we doubled to £20 and covered everybody under 16. Do you have a specific figure on that? The figure that we have been using is the figure that Spice estimated the £220 million figure to cover the cost of doubling and full roll-out to all children under 16, which is planned by the end of the next calendar year. That is helpful, thank you very much. To your submission, the Scottish Government should undertake and publish a full assessment of Scottish tax powers and their potential to prevent and reduce child poverty. In response to how we pay for this, starting from the bottom line, Scotland is still a wealthy country. There is plenty of income, and there is plenty of wealth in Scotland. The question is, and yet we still have one in four of our children growing up in poverty, and we are struggling to find the resources to provide adequate social security, adequate childcare and affordable housing. What can we do here in Scotland within the powers that we have? Up till now, there has been some use of the devolved powers to increase revenues here in Scotland, in a more progressive way, which is something that we are very much welcomed. I think that there is scope for looking with a very specific child poverty lens because we have this clear national mission. We have these clear statutory targets and legal obligations to meet in terms of reducing child poverty. In the round, local national tax powers, what role will they need to play between now and 2030 in ensuring that we harness that income and that wealth in a way that ensures that we have the social security and service infrastructure in place that prevents children from being in poverty in the first place? We have published a book at UK level called Let's Talk About Tax from a Child Poverty Lens. We can share that with committee members. We have hosted a seminar bringing together social policy, tax experts and officials to discuss and start looking at that through a child poverty lens. That is where we are at at this stage, but there are leavers, tax leavers at the disposal of this Parliament and at local level that can be used to increase the resources that are available and can be used in a way that improves the progressiveness of the tax system and ensures that those in the lowest incomes, we can afford to provide the services and the social security that are needed but in a way that does not necessarily increase the tax burden on those who are already on the lowest incomes. On a similar vein to Adam Stewart, your submission rightly focuses on pensioners and older people who are maybe poorer, but clearly there are some pensioners and older people who are very wealthy. For example, they have made a big profit in their houses and they have not paid any tax on that. If there is going to be a national insurance increase, I think that that means that pensioners will not be contributing to that. Do you think that there is room in order to free up resources for the people at the poorer end for better off wealthy people to be paying a bit more? I mean, Mr Mason, there is a very interesting point there. Obviously, it is very current with regard to what might be happening in the UK Government with regard to the social care boost for England through ANI and healthcare too, and what that might mean for Scotland. It is part of the broader thing about a fairer taxation system. I do not think that it is a case that old people who are particularly well off are looking to hoard anything. Remember that there are a lot of people who might have assets but are cash-poor in a sense, but at the same point, when we are looking at the idea of that wealth across the country and who is able to support others, we are trying not to get just into that intergenerational divide. It is a bit woolly, but there are hundreds of thousands of pensioners in Scotland looking on poverty. There are things that are not taxed, but a lot of people of lots of ages have wealth and assets as well. While they might not pay tax on increasing value of homes, that will happen in due course, one way or another, whether things are sold or they sell themselves or part of inheritance tax or whatever. However, we do think that it is part of our submission that we are looking at Scotland. I know that a lot of the pensions and paying of pensions are not reserved to the UK Government, making sure that the Scottish Government looks at the mechanisms that it can use to reduce levels of pensioner poverty. For instance, a third of pensioner households in Scotland live in fuel poverty, but there are considerable powers in Scotland to address that. However, going back to the convener's point about being able to look line by line and see where we do not spend money to address that, that is an incredibly difficult task. I am not sure that I will be able to furnish you the best answers with that right now. I do not know whether the other two would like to come in on the whole question of tax and if they think that there is scope for that. If not, I shall move on to my next question. COSLA made the interesting comment in their submission that the national care service was a distraction. Obviously, we are focusing on the financial side today. We could discuss more of the care side elsewhere. From a financial aspect, is anybody feeling that the national care service is a distraction or is it something that is worth investing money in? I am getting on from Adam Johnson. Do you want to say something, Adam? John Swinney, thank you. It is not a distraction. The national care service is something that we believe, after consultation with older people, is needed. The delivery of social care across Scotland can be patchy. The financial arrangements can be very difficult, but a lot of that is also about more central accountability to the delivery of social care. I think that, particularly through the last 18 months, it highlighted more and more that it was hard to work out who was actually responsible for certain things with social care. It is a very mixed and broad picture. It is not about having necessarily a centralised system. We are needing equity of access across the country. We are needing a mix of different services and different range of suppliers, but it is certainly a discussion about social care and how we pay for it, and how we are essentially accountable for it, is absolutely needed. Absolutely no distraction. The national care service is not a particular focus of expertise for us. I want to make the point that, in turn, from a child poverty perspective, employment and rewards from employment are a key part of ensuring that parents have decent wages and decent secure work is key to achieving our child poverty targets. Women's poverty is very much interlinked with child poverty. Many women are working in care services, so it is part of the discussion around the national care service making sure that we are looking at employment rewards, employment security and levels of pay to ensure that we are, through that lever, creating work that genuinely provides a route out of poverty for parents. I do not know whether the other two want to come in. Otherwise, I have a question for Polly Polly primarily. Another of COSLA's suggestions was that ring ffencing should be removed and give local authorities more flexibility in how they spend money. I know that that is an issue for citizens advice bureau, because some get funding from local authorities and some don't. Would you have a view, both from the citizens advice point of view but from a wider point of view, as to whether we should central here in Parliament, we should be making more decisions or should we be leaving more decisions to local government? Yes, we certainly have a view on that, Mr Mason. Given that a lot of local authorities funding tends to be ring fenced and cab funding is not, there is clearly an issue when local authorities have less money to spend on what they term to be descriptionary services like the cab. They are quite unscientifically passed cuts down to the citizens advice bureau, so we are in favour of making those decisions rear for local authorities. That is me, unless any of the others want to comment on that point. I turn to what you all said in your submissions quite rightly, is that the pandemic has had a disproportionate effect and a disproportionate burden on many people on low income. Mr Dickey, you gave an answer to Mr Mason, which you mentioned employment opportunities. One of the things that is holding many people back is the lack of access to digital skills and the ability to have access to good work. Would you care to comment on what you think the priority should be in allowing people to get access to those digital skills, which are going to be so crucial to the economy and therefore making some of the inequality burden less than it is just now? We have most evidence and the most thinking is about digital inclusion and children and schools. One of the things that became absolutely apparent over the pandemic was how critical having a device and having internet connectivity was to engaging fully with school. That was the case before the pandemic but was sometimes seen as a bit of a luxury, whereas we knew from our work in schools that children were being excluded and were being left behind because they did not have access to a device at home and they did not have internet connectivity at home. That was already reinforcing educational inequalities in classrooms, so that has become really clear. That is why we welcome the commitment that the Government has made to ensuring that every child has a device and that every child has internet connectivity. I think that that needs to be a key focus that we need to be able to see in the budget process how that is being funded over the coming years. There is also something here about this relationship between national and local government that was touched on earlier, so we need to ensure that the funding settlement is adequate to deliver that connectivity of those devices to all children in schools when education is a local authority responsibility, but there are also mechanisms of accountability there, so that we know that it is happening and that children are not missing out. Having a device is another thing about the schools that are apparent and that they are able to use it and to be able to make their job applications and all the things that are very important in accessing the job market. What do we need to do to ensure that those people who obviously have the device are better educated about how they go about the process in the world of work? I think that there is an opportunity here about linking up school and home life. We know that when children are learning at school, quite often the skills that they are learning transfer into the home and what they are learning, so I think that there is something there to build on. Do you have particular recommendations on that link? In terms of the home school link, do you have particular recommendations? We have got work done about the best, I suppose, is more about communicating around costs and barriers to education. I can share with committee members recommendations on how parents can practice how they communicate between school and home around barriers to learning. We can certainly share those recommendations on skills development and particularly skills development for adults around digital. I would be honest that we have done less work on that. Mr Stewart, it is not just about young people. We are talking about older people, sometimes those who are not very digitally able and do not have access to many of the digital formats that we do. What do you think has to happen to ensure that there is less inequality within the older age group, many of whom have huge contribution to make if they have the facility to do it, but who are obviously finding it difficult to be part of a meaningful job? Thank you very much for that. We do have some information in our submission about where the challenges with older workers lie. In the older workers' sense, 80 months ago, there was a shock to the system when people were almost to go at home and do the job that they could with the device. You might not necessarily have used it very much or, depending on the sector that you worked in, but you are then thrust into that space without the training and support to adopt that almost fully digital life. While we have had that shock to the system, I think that going forward, looking at it in the workplace, there has to be better, in the workplace first, better continual training for people on technology, on different types of software, on using it on a regular basis. A lot of that also has to be face-to-face, so if you are already facing challenges digitally, then just making sure that training is online does not necessarily address that. Obviously, in the environment that we have had in the last year or so, it makes things a lot more difficult. Ensuring that more of a coaching style than a classroom teaching and that you must learn this and that is what you have now got to do, get on with it, will not work. Beyond that, we have also got to remember that there will be people who this will not be suitable for. It can be a virtue of disability and other lots of characteristics among them that makes it very difficult. Poverty is a big factor in this as well in terms of our digital exclusion. It is not just about the device itself or being handed the device to use, because, after a few years, that will also become obsolete. However, it is the cost of connecting to the internet as well, which is significant. It is a brand new cost for many people, which will be quite difficult to work out. The data cost has been good research about data poverty in Scotland by Nesta. I think that that is a very interesting one about the broad range of all-age and the gaps that we have there. However, looking also into older age, we experience every single day at age Scotland through calls to our helpline, but people who cannot get in touch with local authorities and services to get a blue badge have to go and do so online. However, a lot of people look at the level of 350,000 pensions that live on their own. There is not someone else in their house who can help them to do that. However, we are having to jump through many, many fiery hoops to try and get the access to services that they need. Although digital expansion is really important, what we cannot forget is about those who are unable to embrace that, of which there are half a million over six in Scotland without the internet, about 600,000 out of smartphone, but all the things that come to take for granted right now are hugely difficult. It is part of that longer-term training, coaching and support that is required throughout their whole life. We have a here-and-now challenge with huge numbers of overfixes that cannot use it but have not had the opportunity in great scale to adopt it, but their lives have been impacted to the pandemic by not being able to access the services that they desperately need, because things have essentially been turned off and switched off. Thank you. That is very helpful answer. I am not sure if the others too want to say anything on this point. Are we okay? I agree very much with a lot of what Adam has said around it's not just about skills, it's about cost and people's ability to access digital public services. I agree that providing an alternative for those who need it is absolutely necessary, otherwise we risk exacerbating inequalities further. There is also a point around availability. Access to high-quality broadband, access to connectivity, and that is something that many of us take for granted but is not available for everyone. Thinking about infrastructure elements and the cost of services is a significant barrier particularly for cab clients. We are very supportive of measures such as social tariffs that some providers offer and that helps to bridge some of that gap in terms of the cost of the service and what people are able to afford. Good morning to everybody. I want to start by asking you one closed question if you could just all answer yes or no before we go into the main thrust of my questions. My question is, do you routinely disaggregate the data in your surveys, whether the ones you carry out yourself or whether you have commissioned elsewhere by sex, a week, gender? It would help if people would speak for the pressure of the court. I would need to go and check whether we can say that across all wars. I don't think that we can say that we do that in terms of every survey that we undertake or every bit of research that we undertake. I think just Adam. Right. I've now realised that it's not always the best way to ask these closed questions, so I'll move on to an open one. I was interested when I was preparing for this session re-reading the questions that you were asked to make a submission upon. It jumped out at me the question around how should the Scottish Government budget for 2022-23 address the different impacts of the pandemic across and I list age income education across places. I myself was very surprised to see that it didn't include sex or gender, although some of our submissions that I saw from the STUC health and social care alliance and the women's budget group pointed that out and did include some submissions. My question to you in the light of all the data that you supply to us and thank you very much for that. Are there additional reflections you would make? I suspect that you probably will poly in particular to the particular impact on women and or girls of the pandemic and also any costed policy initiatives that you could see having benefits to women or girls? I can see some note-taking being here as I've asked it. John, do you want to go first? Yes, absolutely. Child poverty is intrinsically intertwined with women's poverty. Too many of our children are growing up in poverty because their mums are living in poverty and that's because women are disadvantaged in the labour market and have been coming back to your point around the impact of the pandemic and have been disproportionately impacted by the economic consequences of the pandemic. That has added additional pressure and put additional financial pressures on families with consequences for children. There's no solution and no route to ending child poverty that doesn't include ending the employment gap in terms of women's wages and women's earning power in employment. We also know that particular types of families are at particular risk, so families headed by a lone parent at this proportionate risk of children and families of lone parents at this proportionate risk. We need to ensure that the kind of policies that we know are needed to improve opportunities in the labour market back to childcare being a key policy area and a key area where investment is needed. We need to ensure that that reaches those who need it most, particularly lone parents who are disproportionately women. I'm hoping to hear from all of the other three panellists today. I think that just building on what John said, what we know about what has happened during the pandemic for people living with alcohol issues, we know for example that women's drinking has increased more than men's drinking during the pandemic. It's been a kind of polarising picture in terms of drinking behaviours where we have seen a slight decrease overall in alcohol consumption, but we have roughly a third, so about 27 per cent of people reporting that they have increased their drinking. What we know about those people from various surveys across the UK is that they tended to be people who were already drinking at the higher end of the scale, so those who are at much more risk of doing harm to themselves through that increased consumption. I suppose that that was linked to previous discussions about digitalisation. What we saw with support services during the pandemic was that in the initial wave of lockdown, many of the vital support services for people who were needing help with alcohol issues just closed. It took a while for services to get back up and running, and when they did, it tended to be on a digital basis, so facilitating conversations with people over mediums like that. That obviously has an inequalities dimension to it, because, as has previously been discussed, that relies on people being digitally literate and having access to the devices that they need to access that support. In general, women's access to alcohol treatment and support anyway is lower for multiple reasons, including childcare responsibilities, their ability to attend appointments when they receive appointments and so on. We are worried—we are worried in general about the need to invest in better access to treatment and support to people who are struggling. We are anticipating an increase in demand for support following the pandemic because of what we know about how behaviours have changed. There is going to be a gender dimension to that for all the reasons that John referred to, where we have childcare responsibilities for trying to hold down a job. We know that women are reporting having increased their drinking more so than men, so it is a worrying picture. Policy response wise, in our submission, we are saying that there needs to be a real look at treatment and support for alcohol problems, but within that there has to be consideration of putting in place appropriate families support of whole family support services that allow women to have the same opportunity to access as men. I was just supposed to come to add what I said in terms of how what does that mean for budget decisions and how we use the resources of the Scottish Government. We know that women work in certain sectors of the economy—caring, retail, hospitality. I think that there is something about how do we use the business support spend, the money that we use to support businesses, and particularly as we recover from the pandemic, where that money goes, there is a potential lever there to drive up improvements to the quality of work. One way of looking at that would be to look at where we know have been particularly badly affected and where women must be working. If we do that, we can have a flow through in terms of improving women's earnings, improving mum's earnings and reducing child poverty. I have just had the last few comments from the other two panellists, if they want to contribute to the threat. I think that 57 per cent of cab clients are women, so we see more women coming and seeking advice for us. We also know that women tend more to be complex debt clients, so we see more women coming to see us about really quite sticky debt issues. That is of concern to us particularly when the impact of issues such as the removal of the 20 pound uplift on universal credit, the end of furlough and the increased price of energy. All of those things are things that we will be watching carefully over the coming months. Adam, I think that there was just one more response. Adam, did you want to come in before we finish off this thread? Yes, absolutely. Just the very briefest sense that looking at the pandemic in response to women who have been disproportionately impacted by having to pick up extra caring responsibility, maybe having to leave the workplace, not to look at our children or older relatives who have had social care packages removed, that will have a knock-on impact in terms of future earnings and pension wealth. There are also figures in my fingertips that a great proportion of women who are in an unpaid caring role, particularly for older people. I think that Oxfam had estimated that the value of unpaid care in Scotland was £36 billion. In terms of the impact on women through the pandemic, in that caring sense, it has been vast. I thank you everyone for your submissions. If I can start with John, you have here that evidence from your cost of the school day project shows that charging for curriculum materials, lack of digital services and connectivity, cost of school trips, uniform policies, transport, school meals, etc. is excluding some young people from learning. I must be honest, I thought that this was an area that local Government and Scottish Government were doing quite well in. Is it that they should be doing more or are there just differences in different parts of the country? There are still definitely differences in different parts of the country, which I suppose comes back to that point that I raised earlier about ensuring that the funding settlement is adequate to ensure that wherever you are in Scotland, your education, your school education is actually free. You are not having to pay additional costs that you can afford to go on the primary seven school trip. You are not having to pay for a digital device that you cannot afford. There is an issue about ensuring that we have the framework in place to monitor that what has been committed to and agreed between local and national Government is actually being delivered across the country in every school and for every young person. I cannot remember exactly when we wrote that piece of evidence. Over the course of the pandemic, we saw real improvements and there was a real effort to tackle some of those costs and to improve the support that is available to families. There are some very real important commitments that have been made by the Scottish Government that I referred to earlier in terms of already increasing the school clothing grant, committing to ensuring that every child has a device and internet connectivity, removing those curriculum costs were not there yet. What we need to do is ensure that the budget round and future budget rounds ensures that the resources are there to make sure that that happens and that there is a framework in place to monitor and hold to account to make sure that those children are benefiting on the ground. Okay, thank you. The next question that I had was for Laura. Laura, you mentioned the minimum unit pricing for alcohol and I think it was your recommendation that that should actually increase. Is there any risks around that that it may actually increase poverty amongst some of our most vulnerable in society? Well, we are not seeing evidence for that since its implementation in 2018. That was certainly one of the key arguments during the debate around whether it should be introduced or not. People in more deprived communities experience considerably greater harm from alcohol consumption but there is a much lower proportion of people in those communities than in alcohol. What you do see is that those who are drinking alcohol in the more deprived communities drink at much higher hazardous and harmful levels. What we have seen with the introduction of minimum unit pricing so far is that there has not been a negative impact on income for people living in our more deprived communities, so we do not anticipate an increase in the minimum price of being a risk. Just prior to the pandemic, we had started to see some positive indications that the policy was starting to have its intended effect of reducing levels of consumption and we saw a 10 per cent decrease in alcohol-related deaths in 2019, which was a huge decrease compared to previous years. Really worryingly what we have seen during the pandemic is that it completely turned around and in 2020 we saw a 17 per cent increase in alcohol deaths back to levels that we have not seen for over a decade. That has been the picture across the whole of the UK, so Scotland is not an outlier in that respect. That harm will have been experienced more severely in those deprived communities. Minimum unit pricing has always been about trying to protect those people who are at most risk of harm. There is, as you will all know, an on-going programme of evaluation led by Public Health Scotland that is looking at those questions actively as the policy goes through the motions that are being implemented. They are looking at those potential unintended consequences of the policy. What I can say is that, so far, we are not seeing anything of serious concern in terms of impact on lower-level income. In terms of alcohol-related deaths, how do we compare to the rest of the UK? Figures for 2020 for England and Wales came out before the Scottish figures came out, so they saw an increase of 20 per cent in their alcohol deaths. We were anticipating something similar in Scotland. We have had an increase of 17 per cent. That is unusual in historical terms, because Scotland has always had, or certainly in the past 10 or 15 years, a much higher level of alcohol-related deaths than our neighbours in England and Wales. We are asking questions about whether our increase has been somewhat contained by policies such as minimum unit pricing. We cannot tell at the moment, but it is quite surprising to us that England and Wales saw a bigger hike in alcohol deaths than we did, because that is different from what we would have seen in normal times. We are all hoping that this is just a spike because people are stuck indoors and maybe less things to do. We will see in the coming years whether that comes back down to the levels that it was before and then, hopefully, even lower still. As I said before, we know that roughly 27 per cent of people are reporting having increased their alcohol consumption. From UK data, we know that a lot of those people are people who are already drinking at hazardous or harmful levels. We think that we are seeing the effect of that acute one chronic. It is people who are dying who already had an underlying chronic alcohol-related condition and then have increased their consumption during the pandemic. That increase in consumption in that short term, if you already have a chronic underlying health condition caused by your drinking, will be enough to tip you over into seriously harmful consequences. We are really worried about the fact that we have seen the pandemic accelerate us towards a set of circumstances around drinking behaviour that we were already concerned about. Prior to the pandemic, we knew that the amount of alcohol that was being consumed at home during periods of lockdown increased to 100 per cent at times. People are reporting having increased the frequency of their drinking. Part of our drinking community has increased their consumption. Our worry is that behaviours that have been created during the pandemic may be carried forward even when things start to open up again. Increases in online sales of alcohol and home delivery services are all contributing to that. If we want to see a reduction, further action needs to be taken around looking at how we regulate online sales and home delivery services to put other protective policies in place that encourage people to reduce their consumption again. Adam, you mentioned in your submission about older workers. I guess the risk is that many of those older workers might not come back to work once for a low-end. Do you think that there is more that the Government can do to make sure that those workers are welcomed back into employment and given meaningful jobs until they want? Absolutely. There is a big concern that the end of furlough will mean that there is a higher number of older workers who are made redundant. The challenge around that will be people potentially tapping into their pension savings early as a bridge until they maybe find a job. We hear regularly of older people who might apply up to 100 times for jobs and not have any success in getting over the threshold, but that will then lead people in poverty or on lower income for far longer than their life. There is an argument whereby looking at the support for workers whether you look at all the workers as a group likely to be disadvantaged in the workplace being the group who are second most impacted by the labour market as a result of Covid. There is also looking at how the Scottish Government, with very limited cost, if not anything, would be to embrace and support notions and work around age-inclusive workplaces, something that we know. Age Scotland works with hundreds of companies and thousands of employees on that, but to make sure that there are better working arrangements, whether it is flexible working, whether it is support for people who are carers, whether it is better intergenerational teams and more support in the workplace, we can better upskill older workers with all the tools that they need for the future. We have heard of the past of the skills gap shortage in Scotland being over £300 million three years ago now, but whether there is an untaught resource here with older workers to be able to meet those challenges is a group of people who are willing to learn really hard grafters like lots of lots of different ages, but maybe being under supported. Another question that I had for you, Adam, was around health. Something that I get contacted quite a lot about is the difficulty for people to get doctor's appointments, and if you do get one, it has to be online. Has that been a problem for more elderly people, and is it something that the Government could be doing more about? I think that this goes back a little bit to the digital exclusion, and it has necessarily been the case that it is digital only appointments. There have been options on telephones too, but if you consider it again that half a million over 60s in Scotland do not use the internet on our last figures that more than that do not have a smartphone, then that has been very difficult. However, there has been research out there again, not to my fingertips, which have identified the challenges that older people have had with telephone appointments, of taking longer to articulate what the problem they have is in a very short space of time, and only being able to really talk about one challenge—a medical challenge—that is facing them and missing that, having difficulty actually getting an appointment in the first place. However, we have submitted a number of occasions and discussed with the Scottish Government about the need to ensure that there are face-to-face options as well, that we do not just move to a digital space. The challenge that we face in health with people at the beginning of the pandemic is staying away from health services, not with any kind of criticism anywhere—we are told to protect NHS—we will stay away, but then presenting themselves later with more serious conditions. The things that have not been diagnosed, but we do know that there is a challenge in people accessing non-face-to-face doctor appointments and what the impact will have on the health of the long-term is, as is yet unknown, but you can assume that it will not be great. Well, I would say that it is what is required in the budget going forward. Thank you very much. I would like to return to some of the points at the beginning. The discussion regarding preventative spend was of particular importance, especially given the real challenges that we have ahead of us. We are, of course, 10 years on from the Christie commission. Although those things are difficult to implement year to year, I was wondering whether the panel would reflect whether we have done enough to embed Christie in terms of the way that we both devise policy and structure the budget. The key word that has already been mentioned is cross-portfolio. Do we devise and implement policy in a sufficiently cross-portfolio way, and should the budget, rather than being structured around silos, be structured around outcomes? Go to John Dickie first, since he got the grilling on preventative spend at the beginning. The short answer is no. It is worth saying that it is hard to think of a better example of preventative spend than spend that will prevent child poverty and prevent so many of our children growing up disadvantaged and being held back as adults as a result. That brings me back to the big point that I was wanting to make. We have got caught up in talking about individual pressures on the budget and what we want to spend money on. It is about coming back to what are the outcomes that we want to achieve and is our budget process matching those outcomes. We have very clear outcomes from this Parliament and from this Government on reducing and working towards ending child poverty. We have got legal targets, we have got a statement that it is a national mission. We need to have a budget process that matches that and works in tandem with that. It is, as you say, to look across Government portfolios in terms of what the contribution that is needed from each bit of Government towards achieving that goal. I might just pitch the same question to Laura Mahan, mainly because some of the things that you were talking about are tax. In some ways, you were looking at the wider external benefits of levies. Again, the way that we are looking at our tax powers is that we are looking at those sufficiently in the round and the outcomes that they produce. I think that I would give the same answer as John. The short answer is no. I think that there is probably a gap between policy outcomes that are set out by the Government. I think that the Scottish Government does a really good job of focusing on preventative outcomes and making those big, bold targets. I work in public health, and I think that we have some big, bold targets in the public health field. We have seen some really bold steps taken by the Scottish Parliament, the minimum unit pricing being one of the key steps. That is a world-leading preventative policy. The Scottish Parliament has led the way with that policy, but when it comes to bending and the more immediate process of setting a budget, it is clear that the focus comes much more into short-termism. I think that there is a kind of disjointiveness there. As John has said, it is about taking a step back and looking at prevention as a long-term process, save money. A lot of our submission to the committee has been about the huge cost to Scottish society of trying to address the alcohol harm that we experience. £3.6 billion is the cost to Scotland of alcohol harm. £500 million of that is in health and social care costs. What international evidence tells us is that the most cost-effective ways of reducing that cost are through increasing the price, reducing the availability, taking action on marketing. I think that what is interesting in that discussion is that we are talking about where could the money come from. Everybody recognises that budgets are tight, but we still have big operations that make huge amounts of profit from products that are costing our society huge in terms of money, disability, life-years, death and health issues. There is a real imbalance there. Something needs to be done. Part of what we are proposing on our submission to the levees and the potential alcohol harm tax is to buy and recoup some of that profit from the big companies that are profiting from the harm that we are experiencing in our communities to offset the costs that we are needing to pay for to address those harms. However, policy-wise, 10 years on from the Christie commission, there are good aims and outcomes set out, but the budget process needs to match that. Moving on but related to that question, there have been a number of suggestions, both in this morning's meeting and also in written submission, that we need to have a look at the fiscal framework. I wonder, thinking about Christie, whether we need to look at the framework but we also need to look at how we can use and benefit from the fiscal framework. The fundamental outcome of the fiscal framework is that, if we see increases in tax revenues, we will have that money to spend here in Scotland. The risk of making a gross oversimplification is the best way of tackling poverty and the best way of tackling inequalities to ensure that more people are in employment and that employment is well paid. Do you think that we have sufficient focus on ensuring that policy removes barriers to employment and ensures that that employment is sufficiently well paid? Let us use the living wages as the minimum benchmark for that. I will offer that to anyone who fancies having a go at answering it. Polly, I see you smiling most broadly, so I will go to you. I suppose that the national living wage is not sufficient. JRF has done quite a lot of work to determine what a minimum income standard should be and what we find is that a lot of our clients fall short of that. It is very difficult for people to lead a dignified life with the level of income that they have, either through benefits or through employment. That is a significant challenge and it is something that we are thinking about a lot in terms of what we can do to improve that situation. There are two sides to that. There is the income problem and the cost of living problem. I think that the Scottish Government's work on the minimum income guarantee will be really interesting to see how that develops and see if we can get that to a place where it might help to resolve that issue. For us, the fundamental dilemma is that the cost of services, particularly for those who are experiencing poverty, are far greater than their income level. We talk about negative budgets a lot at CAS. That is something that people coming to our network experience every day. John John's point, our age held poverty, is an outcome that we wish to see. John John, I know that a lot more needs to be done to improve the nature of our labour market and to ensure that rewards from work are adequate so that parents can protect their children from poverty. That is a key strand of our submission and our work. There are two big pillars that need to be strengthened and improved if we are going to make progress on child poverty. One is around an adequate social security system, but the other one is about access to decent quality work that allows parents to juggle childcare and responsibilities with employment. A big chunk of that is looking at the nature of women's work and tackling gender inequalities in our labour market. From a budget point of view, what can the Scottish budget do that might help to improve the kind of work that is available there? I think that there are things that can be done by looking at business grant support and rates relief. How can we use those as levers to improve the quality of work and ensure that people who are being paid decent wages have secure employment so that they can rely on that employment and that they are able to balance work and family responsibilities? That was the other point that I think that it is worth making. We can use this budget to help to boost the economy and help to ensure that jobs are sustained and created. We know that investing in low-income families and cash transfers to our lowest-income families has a positive multiplier effect. They do not save that money and go immediately out into our local shops, local businesses and spend it because they need to. That helps to sustain and create jobs, so investing significantly now in social security will help in sustaining and protecting and developing jobs. I do not know whether Adam Orlaura wants to come in on this at all. I move on to a final step back. Covid has been, and it is an overused word, entirely unprecedented. We have seen situations of all sorts that we have never seen before, but we have also seen creative use of resource and policies. Just to give one example, we saw a virtual eradication of rough sleeping through very direct action, use of hotel rooms, and speaking to one chief executive of a charity that works in this sector, he said that the key observation that he would make is that there was very direct, individualised action that essentially was not hide bound by rules and regulations and very much looked at what that individual needs. In many cases, we have seen a very positive outcome because of that approach. I was just wondering whether the panel would reflect if there are any other lessons like that or, indeed, building upon that, how we need to do policy differently and whether there are any lessons to be learned from what has happened over the last 18 months in terms of doing things when, hopefully, we are on the other side of the pandemic. Another positive example has been the way that local and national Governments have worked together to find mechanisms for getting additional cash support to low-income families in the latter part of the pandemic. It took a while, but that happened. The pandemic, the Covid hardship payments that were funded at national level but delivered using local mechanisms around free school meal entitlement and provision of free school meals, made a real difference to families. We know that from the feedback that we had from working with parents and pupils in schools. That made a big difference. When different levels of government work together, think creatively, find the resources, and things can happen. There is also some lessons to learn in terms of where the balance of responsibility relies. We have enough families with children that rely on charity handouts, whether that was for food or material resources, clothing or all the rest of cash handouts. When we have a statutory system in place of the Scottish Welfare Fund, which is there to support a range of purposes but also to support families facing financial crisis and exceptional pressures, too often they did not even know that existed or that there had been barriers to accessing that. Getting the right balance of what is the responsibility of, should children be ending up in food banks or relying on charity handouts for food and clothes, or do we need to fix the systems that we have in place at a statutory level to ensure that, by right, families have the resources that they need to give their children the essentials? I agree with that assessment in terms of the measures that were put in place by Governments that substantially improved outcomes for people during the pandemic. Reflecting on that, what was very different at that point in time was the genuinely outcomes-focused and successive response across where we were sitting, the UK Scottish Government and the third sector towards supporting people to manage through the pandemic. That felt probably quite different to how the normal pace of work that we would normally have with Governments. Just thinking about the delivery of outcomes and at Christy, there is something there in reflecting on when we have that cohesion and that focus, we can work together to mitigate outcomes very quickly, as we are delivered very rapidly. At the time, we all felt not rapidly enough, but if you look back at the timetable of what happened and when, the measures that were all put in place were put in place pretty quickly at the outset of the pandemic, they did work. That was down to combined focus and cohesion and outcomes focus and working together. It shows the power of what can be done, if that is the framework that people need to work with. Do either of the others want to make a comment, Tom? It might be your last opportunity. I was just going to echo Polly there with regard to direct interventions. It is not an advert for Age Scotland to hear about where the Scottish Government was able to, with its budgets and new money, cash injections into service so that it could scale up eminently. Immediately to deliver what was required for people on the ground was successful. Age Scotland's helpline passed by the First Minister early March to scale up from taking whatever it was, 80 calls a day to upwards of 1,000 calls a day for people, because there was no other service for older people to do that. The Government then had to create something from scratch and then seeing the massive level of phone calls for information advice and access to services was really smart. With regard to the pandemic, direct interventions were services that exist already can scale up, not always just to do more of the same but to do much more when it is required rather than reinventing the wheel. That was really positive. The relationship there since then has been fruitful to show. I understand from the Government about what services exist from the third sector and other public services from the private sector, which can be used to make people's lives better. I think that it is a really positive outcome from such a difficult time. I suppose that I am in a slightly different position because we experience similar cohesion and coming together of multiple partners with a very clear focus and working at a much higher faster pace than we might have done, which ultimately resulted in some positives. That process also highlighted some significant challenges, and it goes back to a point that I made much earlier question about the mechanisms for rentability and transparency around what services are being provided by whom we are funded by Hot Pot. What was exposed earlier in the pandemic was that there is not a national overview of the level of support service across the country for people with alcohol issues and their families. We saw a crisis at the start of lockdown, and that is what brought the partners together. Suddenly, services were just not available. That is potentially not unique to our sector, but it is obviously working in health and social care. So many of the services and personnel in those services were diverted into Covid response jobs, away from their normal jobs. That included at a policy level in the Scottish Government. It left a gap, but then third sector partners had to step into the ill. I suppose that it exposed a weakness in the system, so putting a positive spin on that is helpful to know that that weakness is there so that we can start to think about how we protect against that in the future. While I would not ever want to repeat that experience again for anybody, it certainly has highlighted issues that we knew were bubbling away under the surface, but it has brought them to the surface. It allows us to scrutinise those and think about how best to respond. What I hope to see going forward is that the cohesion that we have had in that emergency response to the situation will continue as we try to build the Covid recovery and ensuring that those things that have been highlighted are part of that recovery and ensure that we are stronger in the future. Thank you very much, Daniel. I would like to thank all our guests. We are almost 20 minutes over time, so I am not going to ask any further questions. You will be glad to know, so I would like to thank you all for your contributions. I would like to thank John for coming here in person. I would also particularly like to thank Age Scotland for its policy on concessionary travel, given the fact that I will qualify as of tomorrow. I know who would believe it. Thank you very much, everyone. I will now call Halt until 20 past 11 for an exchange of witnesses and a natural break. We are just going to start in about 10 seconds. We now move to our second evidence session of the day on pre-budget scrutiny, in which we hear from Kevin Robertson, chair of the Scottish Property Federation, and Joanne Walker, technical officer of the Chartered Institute of Taxation and its low-income tax reform group. Joanne is joining us remotely, so again, members should make clear which witnesses would like to respond, and a broadcasting team will turn on their mics. I will aim to give both witnesses a chance to respond to questions, but if Joanne wishes to respond to a specific point, please indicate to me by raising your hand and typing R into the chat function on the BlueJeans software package. I should declare an interest as someone who actually does own a property and rents it out. I intend to allow around an hour for this session. Members have received copies of both witnesses' written submissions, so without further ado, I would like to welcome my witnesses to the meeting and start the session by asking a question of Joanne. In terms of your submission, you do not wish to put forward suggestions of particular powers for devolution or specific policy proposals. In terms of the Scottish budget and its taxation policies, do you believe that it conforms to Adam Smith's four principles of fairness, certainty, convenience and efficiency? Thank you for inviting me here today. In terms of offering no specific policy options, we tend not to advocate specific policies and tend to comment on policy proposals once they have been proposed. I think that we have suggested a few potential areas where there might be cases for reform, and if you want to ask me anything on those specifically, that is fine. I will do what I can to comment on any items. In terms of the four principles at the moment, it is difficult for the system to follow all four principles at one time. Whenever you have four principles like that or if the CIOT has 10 ideas for what the tax system should be like, then there can be a tension between obtaining some of them. For example, the two that are readily spring to mind are that, if you have a tax system that is as fair as it can be, it is unlikely to be simple, but it is just a natural corollary of that. It tends to make it more complex as soon as you try to make it fairer and account for different situations. Broadly, when new policies are brought in, I think that the Scottish Government tends to look at the four principles and ask about them, and sometimes it specifically says that a measure is aiming more to deal with one particular principle. You do not necessarily look at one particular, when you are looking at one particular tax or one policy, that would not necessarily meet all the principles itself. What we try to look at is for the holistic effect of the whole tax system and whether that appears to the principles. You have also suggested in your submission that a tax system should include simplicity, certainty and a fair balance. You are going to talk about the seven principles for the tax system, which should be cleared up today. It is simple, equitable, just, accessible and responsive, joined up and inclusive. Given the discussions that are currently on going with regard to national insurance, is that a tax that you feel meets those seven principles? With the current proposals that we are hearing from the UK, I have a few comments to make on those. Obviously, national insurance only affects employment income and self-employment income, so it does not even affect all the elements of income that are affected by the Scottish income tax, which covers the whole of income other than savings and dividend income. From the point of view of having a broad tax base, it clearly does not cover all the elements of income. From that point of view, it does not tackle some areas. It kicks in very early for a lot of income, which means that the income tax personal allowance is £12,570 this year, so that is £3,000 of income that is not taxable or is subject to national insurance. It will affect non-tax payers who are workers, who are employed or self-employed. From the point of view of Scottish tax payers specifically, those who have income between the Scottish higher-rate threshold of £43,662 and the UK higher-rate threshold of £52,770 will have a joint income tax and national insurance rate. Currently, it is 53 per cent if the proposed figure is 1.25 per cent, so that would go up to 54.25 per cent on that roughly £6,500 worth of income that people might have if they earn that amount. However, as I said, it does not cover the whole type of income, it only covers very specific earned income for people of working age. From that point of view, it does not meet necessarily all those principles. The next question is also going to be to you, Joanne, but I am also going to ask it off Kevin before I switch to Kevin specifically. It is based on someone else's submission. It is the STUC, the Scottish Tragedy and Congress submission, stating that it does not agree with freezing income tax for the duration of the Scottish Parliament. Governments cannot continue with their promises in regard to that, but what do you feel, Joanne? Do you think that that is something that should be stuck with the Parliament, or do you think that it should be reconsidered? I will be asking Kevin the same thing. I will be a bit unsurprised to hear that I am not going to advocate a specific policy. It does rather tie one's hands to make a promise like that. As we pointed out in our response, the tax leavers currently at the disposal of the Scottish Parliament are fairly limited. We have only got Scottish income tax and limited powers over Scottish income tax. All the other taxes that are national and devolved are relatively small in terms of the amounts of revenue that they can raise—land buildings, transaction tax and Scottish landfill tax. What it leaves with that promise to not touch Scottish income tax means that, at the moment, you are either reliant on completely new national taxes or the devolution of departure tax, which will again raise relatively small amounts or amendments to local taxes, in particular council tax on domestic rates and changes. Obviously, those revenues are more local than national. It limits the options significantly. There is a sneaky way in which Governments can allow income tax to go up by just not changing the bands whereby fiscal drag allows inflation to move more people into higher bands, so that can take place. What is the Scottish Properties Federation's income tax whether or not the income tax should be frozen for five years or not? Thank you for giving me the opportunity to come here this morning to speak to you on behalf of the Scottish Property Federation. I do not know that we have really got a specific view on that. I think that it is more for the politicians to decide on the policies around freezing it. What we would not like to see is that other taxes are frozen and then property taxes, which could frustrate future investment in the economy, are increased. That would be our view on it. I think that I can understand why Governments might want to make those policy commitments, but I think that there needs to be flexibility in the system to react to the economic situations. Thank you very much for that. You said in your own submission that our members are clear that tenants who compare and should do so and those tenants who need support should be helped to wear a property when it has any means to do so. Can you just expand on what you mean by that and in what way that support could be provided? Yes. The property industry, as you probably mostly know, is the dependent on investment in property. That enables us to build and create the environment that we live in. A lot of the money that comes into property investment could be our own pensions, or businesses. There are various ways in which property investment is funded. What we have seen through the coronavirus act is that our traditional landlord and tenant relationship in law has changed. We think that it has been good that we try to protect businesses. Our landlord members have worked closely with various tenants, particularly the retailers, to try to help them throughout the pandemic. What we are saying is that we would prefer that we revert back sooner rather than later to the existing landlord and tenant provisions and normal contract law than extending the provisions of the coronavirus act. I have some statistics for you here that the BPF, which is the British Property Federation, did a study of over 16,000 retail, hospitality and leisure property leases across the UK. We found that 77 per cent of the rent owed from March 2020 has either been paid or an agreement reached on arrears, including payment plans, waivers and rent holidays and deferrals. That means that only 23 per cent of rent owed since March 2020 remains unresolved, for property owners and tenants who have not yet been able to agree how this debt should be managed. That includes a small minority of tenants, 14 per cent, who are currently refusing to speak with property owners despite a proactive approach to reaching an agreement. Our members are clear that those tenants who can pay the rent should pay the rent, and those tenants who need support should be helped for a property owner as a means to do so. I would also add that, if you look at it as some of the investors in property, it could be our own pension funds and things like that, whereas some of the retailers might be owned by private equity. It is just trying to get that balance right. While we have worked throughout the pandemic and our industry has worked throughout the pandemic with the tenants, we think that the sooner we get back to normal landlord and tenant relationships, the better. That will help us to stimulate more investment in the built environment in Scotland. I think that that is something that the Parliament is going to spend some time deliberating over in the months ahead. However, going on further into your submission, Kevin, you have said that planning and tax incentives to encourage mixed-use developments could support regeneration and help to realise the ambition of 20-minute neighbourhoods. I am just wondering if you can maybe advise us to work to planning and tax incentives that you have in mind there, and if Joanne could comment and see if she has any ideas in that particular area as well. Again, if I can just quote you some statistics, but the impact of the coronavirus on the property industry has been quite extreme. 2020 saw a fall in year-on-year investment in commercial property of some 50 per cent, representing a reduction of £1 billion in activity. Our largest commercial sector Glasgow experienced a fall in new office demand of over 50 per cent compared to 2019. Meanwhile, the Scottish retail consortium reports that one in seven shops across Scotland are now lying vacant. The BBC also reported at the weekend that more than 8,700 chain stores closed in the UK in the first six months of 2021 on the high streets, shopping centres and retail parks. That is 50 a day. City centres have suffered the worst while retail parks are faring better. The store closure figures were collected by the local data company on behalf of a county firm PWC. Our industry needs a fair and effective business environment in which to invest, develop and support the occupation of commercial residential and public buildings in places. On to your question about what we should do. We would like to see the continuation of support and business rates reductions if necessary throughout the coronavirus period. One of the things that our members are particularly concerned about—I am sure that it has been the subject of much debate in the Parliament—is the empty property rates. We feel that the impact that the coronavirus pandemic has had on the retail sector and our town centres and the needs for us to get back to recreating them and getting people back to using those facilities. It has also been exacerbated by the internet and the use that we are all making of it. We think that it is unfair for the continuation or the existing regime of empty property rates. We think that that could hinder future investment in our towns and city centres. I think that I will want to explore that in further depth. Joanne, do you want to comment on the question that I asked about tax incentives to communism access development? I agree on the empty property non-domestic rates that I attended around table a couple of weeks ago that were looking at regeneration of town centres and how to do that. It was raised a number of times on the issue of empty property rates and discouraging investment, because, as Kevin has indicated, a lot of retailers have gone out of business. If an investor would choose potentially to invest in an empty business property, they would then have the issue of finding a tenant. Unfortunately, because of the situation at the moment, there is a fear that they will not be able to find a tenant of any kind, so they are left with an empty property that they would have to pay the rates on. It is acting as a significant disincentive. One of the things that was discussed and one of which is out with the current powers that Scotland has is that there are a number of disincentives to regenerate properties and to regenerate brownfield sites within the tax system, both the empty properties rate and the VAT regime. They could be altered to not only encourage investment in town centre properties but to effectively discourage developers going to greenfield sites ahead of brownfield sites, because that is in particular an issue with the VAT incentives at the moment. They encourage them to use greenfield sites rather than regenerating and refurbishing disused brownfield sites. Obviously, that is not within the powers of the Scottish Parliament or the Scottish Government at the moment, but that might be something to consider if the VAT were to be devolved or in terms of negotiating with the UK Government and actually discussing with them what they might do. I will leave them to the end if there is time, but I am keen to get other members in. I will first be followed by Joan. I ask about two issues that are effectively about the accountability and the scrutiny within tax and spend, which is a prime consideration for the committee. It has been said several times, particularly during the last session of Parliament, that the committee tried very hard in this angle to ensure that there is good quality scrutiny of the decisions that are made in the Parliament. What do we have to do to improve on the scrutiny and accountability of the tax and spend system? We have had other committees in this Parliament who have investigated several aspects of it and have come down on the side that there has been, in some cases, gross mismanagement, procurement and whatever, and that does not help with the public accepting what tax system exists. Do you have any suggestions on what we could do to improve the accountability of the tax and spend system? I see you nodding, Joan. Yes, would you like me to come in first? Thank you. The CIOT and ICAST, before the elections, were published a joint manifesto for what we would like to see and to build a better tax system. Obviously, Scotland has had a good start, and the Scottish Government has taken a consultative approach, but there are always improvements to be made. One of the things that we would like to see that would help to improve scrutiny is to see an annual finance bill process. Obviously, that system is not necessarily perfect at Westminster, but there are things that Scotland could change about it. It does not have to be an exact replica of the Westminster system. For example, as we are doing now giving oral evidence to you, the finance bill that goes through the UK Parliament, there is no oral evidence from expert witnesses. If a finance bill system was adopted in Scotland, it would allow for oral evidence sessions, as you are doing now. That would hopefully strengthen scrutiny. It would also play another role. It is really important to improve public awareness and understanding. Having a set finance bill process would help to raise the profile of the Scottish tax system among the public. That would then allow to build on other ways of improving understanding. We would also like to see a longer-term approach to policy development. Obviously, that is not always possible. The way that the Scottish Parliament works in terms of not necessarily having a majority means that sometimes it is necessary to have negotiations before the close-to-the-budget time being finalised. Ideally, if there is a longer-term approach, it allows for better consultation and better tax policy development. On that theme, do you feel that there is a need to ensure that there is greater coherence between the UK and Scottish Governments about the timing of some big financial information budgets? One of the concerns that we have put to us is that it is very difficult for planning ahead, whether it is Scottish Government or UK Government, because the timescales are apart from each other. Therefore, there are lots of unknown variables that matter to Government and to economic advisers. Do you feel that some of that problem would be dissipated if we could have a better coherence over timescales? Yes, definitely. That has been an issue for the past few years because of various issues with delayed UK budgets. Obviously, that has had a significant knock-on effect, especially given that the UK can publish its finance bill, but it does not have to be passed until July, because it has the ability to have a provisional collection of taxes, even if the act has not actually been passed. Obviously, in Scotland, we have to have the budget through and all the resolutions through in March before the start of the tax year and also for the local council budget. Therefore, it has had a significant effect. Better timing, better co-ordination between the UK and Scottish Governments on that. Better communication may be behind the scenes to allow even if it is not necessarily on a public level, but if there could be some indication so that there are not rabbits out of the hat whereby I understand that the cabinet secretary does not know what is in the UK budget. The Scottish Government officials have no idea what is in the UK budget until the whole of the UK public does. While that, in some ways, is fair, in terms of planning for the Scottish Government, is not very sensible. Obviously, there is a question of the renegotiation of the fiscal framework, which has to take place very shortly. Again, it has been put to us that there are elements in that framework that may be difficult when it comes to coherence between the two Governments, particularly in terms of some of the technical aspects of that framework. Do you have any comments to make about any of the technical difficulties of the existing fiscal framework, which is 2016 until just now? I am not an expert on the fiscal framework, but having a broader review of it would be helpful of the nature along the lines that the Scottish Government is proposing in terms of encompassing tax powers and whether there needs to be more of them and more borrowing powers. One of the things that I think I am right in saying is that borrowing is not allowed to extend beyond one financial year. Obviously, that does significantly limit. Having a look at the whole package, that will be important to think about what would be most helpful to Scotland to have within that fiscal framework. You made an interesting comment to the convener about some concerns that you have over the question of contracts between the tenants and the people who are renting the property. You felt that some of the legislative changes that have taken place have not been particularly helpful. Could you just expand on what you meant by that, Mr Robertson? Yes. For years, the property legal system has been fairly worldwide renowned and that framework has allowed investors to come in and buy office buildings, invest in our town centres and build shopping centres. That money comes from various sources. What we are just seeing through the coronavirus act and the moratoriums on rent payment and the procedures that were put in place for non-eviction of commercial tenants are just steps that we think might and we feel and we are getting indications that that could potentially prevent large institutions from coming in to reinvest in our town centres if those continue to prevail because there was a system in place that seemed to work quite well. There is a concern, not just here in Scotland but in the UK as well, that those provisions—we all accept that they were necessary to protect businesses when we didn't know what we were entering to when the pandemic hit those shores. However, as we move forward, we are just putting a flag out there that the property industry needs stability, it needs long-term certainty. Again, I will make the point that sometimes a lot of the investment is not just private landlords, it could be county council pension funds, it could be the mine workers pension funds who I used to work for. Those business pension funds and investors need stability and they are just not going to invest in the built environment to the same extent if they think that there is a threat that they might not be able to get the return because they can't effectively deal with the property if someone decides that they are not paying. Over the years again, we have seen that some tenants are using other means to avoid paying rent. We have seen that in the retail industry with CVAs, etc. We are just flagging up that there is a potential concern going forward. If the balance goes too far, it could prevent future investment in our towns and centres, and we need that as we rebuild from where we are today. Absolutely, thank you. That is very helpful, Mr Robinson. Thank you. I join before my Daniel. Thank you so much, convener. If I could just return briefly to the empty property rates that the convener asked about. I mean, my memory was that we had properties that were sitting empty for quite a long time periods and the owners appeared to be hoping or expecting that the property value would go up and they would make the property that way, so it did not really matter whether they put somebody into it. A specific example from my time, which the convener may also remember, was the post office in George Square, which sat—we are a beautiful building right in the centre of Glasgow and just sat empty for ages. Is that not why we brought in the empty property rates and is there not a risk that it slows development down further if we did not have them? I think that that is a fair point. I think that we are in a changed world since we were thinking that we quoted some statistics about the one-in-seven shops that are empty. Generally property owners and a deal-in property have done it for 40 years. We want to go on and make things happen with it. It is not normally, through choice, that you do not want to accept rent, particularly if there is the burden of empty property rates. I would say that the problem for the landowner has become more acute and, again, going back to what we need to do to get the property industry back and working again, is that we need to review it. I think that that is what we need to do. I do not know how we prove that someone is deliberately holding back to get a higher rent, but, in my experience, people are generally—when they buy a property, they want to get income from it, or if they buy it to develop it, they want to develop it. We can maybe talk later about the reasons why there might be delays with that. It is time to review the economic shock that we have had. I think that we need to do that. I picked up from your submission and from the Scottish Chambers of Commerce comments like matching the UK tax rates, maybe cutting property taxes, incentives with LBTT. All of those might have arguments for them, but, on the other hand, if the Scottish Government, Scottish Parliament, takes in less money from those taxes, we have to cut the NHS or cut local government. At this time, when everybody is struggling and clearly the NHS is under pressure, can you justify cutting any taxes because it will have that kind of knock-on effect? I would not be advocating any cuts to NHS budgets on that. I am looking at it from an economic perspective and an industry perspective. We are just making some suggestions of how we get our industry working again. The revaluation was last done several years ago, and it has been recommended that the revaluation takes place. That has been deferred in the past couple of years. There are less retailers to take those properties on, so we are going to lose the take from the rates anyway, because there will be less, unless we still get empty property rates and people are paying that. What we are saying is that it is potentially a downward spiral for property and for our town centres unless we look at other ways. We accept that you have to fund the NHS and things like that, but what we are saying is that we also have to think of the consequences for our billet environment, because we all want to have thriving town centres and nice places to visit, so it is a balance. That is helpful. Another area that you mentioned was in the planning area and planning departments, particularly that planning departments and councils should get more funding. Maybe you can clarify for me and the general public. I would have thought that planning might be a self-funding exercise and that the fees that come in match the costs. Is that not the case? I am not sure that it is, but I think that councils determine how much of the planning fees goes towards the budget for the planning department, but it is down to the individual council to decide. What we have seen over the years is that the quality and the timing of decisions by the planning authorities are getting longer and we are not getting our quality service. Again, we think that that might put the Scottish property industry at a disadvantage in terms of seeking investment. If we are dealing with a global pool of capital that we want to invest throughout the world, throughout Europe, throughout the UK and then in Scotland, and if they get choices to go to other cities where they think that they are getting a quicker response and that they will get planning permission and get more certainty about it, then I think that they will make the decision to do that. We are all competing. Is it going to pay slightly higher fees if they have a faster service? Yes. I know when our members have confirmed that. During 2021, the annual average decision time for major development applications was 41.3 weeks. Those are from Scotland's chief statistician, which recently published annual statistics on planning performance in Scotland. It was 41.3 weeks, and it is now almost eight weeks longer than the 32.6 weeks for the previous year. Again, we know that everybody said difficulty working with Covid and adapting, and we think that the planning service has done a good job in getting up and running, but we are falling behind and it is taking longer, and the number of major applications is also falling. We need to look at all those things in the round and make sure that we can get a performing property sector, because we are quite a major contributor to the economy. I accept that. I will switch now to Ms Walker. I did not ask you to come in on any of those points if you want to come in, you are more than welcome. However, the specific first question that I had for yourself was in your submission, and I think that this is following on from Liz Smith, and you may have already answered that. It says that, prior to the pandemic, the Scottish Government had been considering methods of improving the tax policy making process and the legislative processes for taxes, and you would like to see that work through. Is that purely a finance bill or is there a bit more to it than that? Obviously, the Scottish Government is currently consulting on a new framework for tax, which effectively deals with the policy making process point. You mentioned the devolved taxes legislation working group, which was jointly chaired by the Scottish Parliament and the Scottish Government, and the CIOT. We were sitting on that, and we would like to see that work picked up. Yes, hopefully, the outcome of that is a finance bill process, and that is the main thing in terms of the legislative element that we would like to see as an outcome, but for the reasons that I mentioned earlier. Okay, thank you. Another one I will aim at you, although Mr Robertson may want to come in as well, I do not know. However, the voluntary sector—I think that they do this every year, but they have been asking for multi-year funding and a bit more predictability, which Mr Robertson mentioned. In practice, because I accept that you are looking at the practical sides of this, is it actually possible for any Government, be it Westminster, Scottish Parliament or even local government, to make that commitment and to work that way multi-year rather than the annual process that we have at the moment? Yeah, I can see that it is probably difficult, because you want to be able to adapt and be flexible. I think that the business want certainty, the voluntary sector want certainty, and that is really helpful. One thing that we have suggested recently in relation to environmental taxes with the UK Government is another broad road map with a view to achieving net zero on climate change. A road map approach in which you have a broad direction of travel, but you do not necessarily specify individual items. You have broad steps along the way and a direction of travel so that people can understand where you are heading to. From that game, some sense of certainty and stability is probably quite a useful thing. There was a corporate tax road map that the UK Government produced in about 2010, and that worked quite well from corporate taxes point of view. It is difficult, especially when you have events like Covid occurring, and it throws up all sorts of unexpected demands. If you have a broad direction of travel with the caveat that you have to remain flexible. With an example of that being landfill tax, we basically say that we are going to keep raising landfill tax to try to discourage landfill. That would be a sense of direction without actually taking all the rates. That would be an idea. The idea may be that you have the separate fund to do with that that you are paying into and a sort of guarantee that that is going to continue. That is me unless Mr Robertson wants to come in on any of that. I was just on the point that Mr Robertson made about planning. I once read an article by a retiring chief executive of West Lothian. He was asked how West Lothian was able to attract a disproportionate amount of investment, given that it was post-mining and it had been one of the poorest authorities. He said that he focused very much on turning planning applications round within four weeks, either year or nay, as an indicative. That gave him a competitive advantage with our local authorities. That is a point that you have made well. I will mainly focus on high streets in the comments about retail. Before I do that, let me get my declaration of interest out of the way. I refer members to my register. I am a director for company with retail and stress, and I am a member of AUSDAW, the shop workers union. Before I ask those questions, I would like to turn to a question that I asked the previous panel about pitch it in a different way. Last week, the committee was looking at the impact of taxation decisions that have been taken in Scotland. We should have seen an additional £500 million through the changes that were made by the Cabinet Secretary for Finance, but we have only seen £150 million uplift. The reason for that is because of the fiscal framework and the way in which that works. Fundamentally, the income tax receipts per capita have increased more slowly in Scotland than the rest of the UK. What does that say about the way in which we have been applying taxation policy? The fundamental question that elicits for me, which I put to the last panel, has the Scottish Government been sufficiently focused on increasing the number of taxpayers in Scotland? Are you getting people into work and ensuring that when they are, they are sufficiently well paid? Surely that is the best way of ensuring that we have money for public services in Scotland. It is probably more for Joanna in the first instance, but I would be interested in Kevin's response as well. I agree that the more people we can get working in contributing, the better. I do not think that I would get much more to say than that, but I do not know enough about the tax fiscal system, I am afraid. Jen, are there any sort of oppositions that you have about the way that taxation operates in Scotland? Thank you. Obviously, partly the fiscal framework operates, partly because of Scottish income tax. It partly relates to different forecasts and that can affect what filters through at different times. However, I agree that it is important for us to have more people in good work that pays well. Obviously, part of the tax system Scotland only has limited Scottish income tax powers. Obviously, that includes over employment income and self-employment income, but it is basically just the ability to set the rates and bans. The personal allowance is set by the UK Government, and that is set currently at £12,570 and rose quite significantly over the past few years. That means that I think of something like 4.5 million adults in Scotland. Only 2.5 of them pay tax because the rest of them are either not earning enough or not earning at all. That highlights the issue that the adult working population in Scotland is a little more than half within the proper tax system. Obviously, some of those will be paying national insurance contributions, because, as I mentioned earlier, that kicks in at a lot lower level. However, it means that there is a significant group of people that are not paying at all any tax in Scotland. I would like to move on to retail. I wonder whether we are sufficiently concerned about the impact of Covid on the retail sector. If you consider that 10 per cent of employment stems from retail and associated industries' largest source of private sector employment, if you couple that with the fact that we have seen as a proportion of retail sales, online sales have increased by about 50 per cent. Indeed, all those online retail sales, according to the ONS, about half are from, and I love this euphemism, non-store retailing, but I think that we all know which big non-store retailer that starts with an A that that is probably referring to or has a lion's share of, and with furlough coming to an end. Are we about to see a cliff edge for our high street retailers? If they are trading down 20 per cent or 30 per cent, which the current figure shows, that is just not sustainable, is it? What are the consequences of that? I will go to Mr Robertson first. You have made a very good point, and I think that that is why we are advocating a lot of the things and asking the Government to pay attention to it, because we think that when furlough does end and these shops are going to be fighting for survival, would they consider to be penal rates and that their competitors are sitting in dark factories or whatever and able to supply online? Is it really worth it for them? Some of them have already adapted to the challenge, but as someone who cares and works in the bill environment, we have to think what the implications are going forward. We are all keen to move to net zero and to take on board sustainability. There are going to be other costs, capital costs that have to be invested in shops, etc. Going forward to make those buildings more sustainable. Cliff edge might be a bit far, but we are certainly in for major challenges in the retail sector. Do you have any observations about retail? I do not have much specific to add to what Kevin has said, but I think that it probably requires a very broad and holistic review of the whole position and to bring in various elements. Following on, you have alluded to the need to look at non-domestic rates and that is certainly something that I would completely agree with. I was wondering if you would agree with the assessment that the fundamental problem is that non-domestic rates do not reflect the balance of retail trade within the economy. If you look at non-store retailers, they are just paying rates for what is a warehouse rather than reflecting the fact that those are sales to direct consumers. Fundamentally, even if you look at rates, it is only notionally connected to rent. The assessor might come up with a rateable value, but there is no direct correlation to what people are paying in rent. Do you have a system that is in that sense broken and potentially has a real impediment to recovery in the sector? Am I over-egging that? Do you agree with that assessment? I would generally agree with that. I think that there is a challenge out there. It is at a world level. The Governments throughout the world are grappling with how to deal with taxing the big internet companies. That is a real challenge. It is unfair on the smaller retailers. For years, we have been fortunate when you think of it. The contribution that the retail sector has made in balancing the Government books is generally that the retail sector has had the highest rateable values. We are seeing the seismic shift that we are all involved in and choosing to shop online quite a lot, particularly through the pandemic. We have a real challenge for the retail sector. That impacts on our built environment and how that will change and adapt. We are now talking about 20-minute neighbourhoods and more local centres. There is a whole host of things there. We need to think—that is why we are bringing it to the Government's attention, because we need to think fully about retail town centres. The future of offices are people going to get back and work full-time in offices. There is a whole host of things that could affect our future. There needs to be an alternative. In the longer term, what does that look like, but also are there steps in the short term? What should we be using as the basis for taxation? Should there be some sort of generalised sales tax? Should rent be taxed directly? I know your response to this next bit. Should landlords be taxed rather than tenants? I know that you are going to say no, but nonetheless I will put it out there. Is there something that we can do in the short term about addressing online retailers? Could we create a new category of either warehouse or retail premise that enables us to use the existing, albeit imperfect, regime to tax the massive increase in sales that the non-store retailers have experienced over the past 18 months? I think that that is all the good points that you have made. My simple answer is that we need a review of the system. We need to look at it holistically and to look at the pros and cons of doing various tweaks or fundamental changes to the system. At the moment, the rental value basis and the fact that rental values have historically been higher on retail is changing. If there was a revaluation, it has been put back to 2023, but if there was a revaluation, the take from existing retail is going to fall. I think that we need to do a review and I am not quite sure what the procedure would be, but the thinking behind the internet retailers in big sheds paying effectively industrial just seems to be unfair when you look at the value or turnover relative to their overhead costs. I think that our review is what is required. I will resist the temptation of having a rant about the revaluation process. I will leave that for another day. I wonder if Joanne has any sort of thoughts or observations about the need for reform of non-domestic rates or any views about what should replace it. I probably have not got a significant amount to add to what Kevin has said. Obviously, there are other ways in which companies are taxed, some of which are not corporation taxed, which is not within the Scottish Parliament's gift at the moment. Obviously, there are international negotiations on going about those things. I suppose that it is trying to do something holistic and meshing all of those in and seeing what is the best solution and whether it is a combination of those things. Clearly, non-domestic rates may need to be reformed in some way, whether that is treating certain properties in a different manner or whatever. Thank you very much. That is my round. I am not at all. Thank you very much, Daniel, and it is Michelle to be followed by Douglas. Good morning. First of all, Joanne, thank you very much for your submission. I enjoyed it greatly, but in the interests of time, I am probably going to confine my questions to Mr Robertson. Secondly, I should declare that I have an interest in some bitolet property and I am also an ambassador for the all-party parliamentary group for fair business banking, which is based out of Westminster. What I wanted to do, Mr Robertson, was to gently challenge you on a discussion that came in earlier about your comment about the well-respected property legal system being undermined of changes to the landlord-tenant relationship. That could create a barrier to much-needed future investment. I suppose that my challenge is that, in the light of the considerable uncertainty in the trading environment, surely, as big a factor in that is access to finance for businesses and the risk appetite of lenders, be they private equity or banks. Would you reflect that that was also the case? That is a fair point. When we are looking at the issue, we also have to take into account that some of the people who are investors in existing property stock may have lending sources and, if the tenants are not paying the rent or have the ability not to pay the rent or are not being forced to talk to their landlord, that might put individuals, companies or property owners in jeopardy with the banks. That is an issue. I was interested in what reflections your organisation has made on the desire for home working or at least a version of hybrid that we have seen today. How that will cause a necessity change of the people that you represent? What kind of reflections have you got on that? That is quite a big subject. It is all quite new. We are all trying to find the new norm, and the new norm might differ for different organisations. Some organisations are seeing increased productivity by working from home, others are seeing difficulty with it, others are encouraging people to go back. Our industry is still trying to come to terms with it, and we are looking at whether we need more offices or whether our office requirements are going to shrink. In terms of house building, people are looking at introducing more space in houses for home working. We are still in a state of uncertainty. We do not really know yet, but my own view is that we will see some businesses that will go for a hybrid model, some businesses that want 100 per cent people back. That might increase the demand, as people might want more space, because we were getting squeezed into smaller spaces, but because of the pandemic people might want more space. For our young people, we need people to be coming together for collaboration and ideas. It seems to be that that is good and healthy for business and people's wellbeing. Generally, we see that there is still going to be a need for offices. The full extent of the pandemic is still to be worked out, but we are all working to see it. I think that we have seen various comments from major internet companies saying that they want all our staff back, other companies saying that they are going to go for a hybrid model, some people are not working on a Monday, some are not getting into the office on a Monday and we are also looking at a four-day working week as a Government. I think that there is a lot there. The pandemic has driven the debate forward and we will find out soon what the outcomes are going to be. I take from that that that is an area that both you, on behalf of your members and your member organisation, will be reflecting on, given the long-term nature, often, of property. Moving on from that, one of the themes that I have been following up is that we know that diversity makes an economic contribution. What reflections has the FPF made on supporting women-led businesses that you represent, given that the diversity gives economic contribution? The SPF and the BPF are very inclusive organisations. One of the things that I took on in this position is that my predecessor was a lady and she was in a senior position in the property industry. We also have women in property in Scotland. We are looking to broaden it because, yes, you are right, traditionally property has been male dominated and we need to do more about that. As part of my tenure at the Scottish Property Federation, one of the things that we are doing and encouraging is futures and what we are doing is that we are now engaging with the young people in property. Again, we are quite an aged industry and we are looking to bring forward people with less than 10 years experience who have set up a programme for mentoring. That is all with a view to becoming more inclusive but to get fresh ideas into the thinking, your question about offices, about retail, all those things. I think that we need fresher thinking from the young people who are going to be here a lot longer than I will be here. That is part of our inclusive agenda. I assume that you may look at the membership on your policy team that, when I checked out today, has three women to 23 men, so that is 13 per cent. Those things are all—we have seen through business and it is not making excuses, but it is not happening as fast as it could potentially do, so it is something that we are all working towards. Another area that groups together in your submission, you note the desire for increased capitalisation of the Scottish National Investments Bank, of which I agree, and I also comment on the need for a national infrastructure agency of which I also agree. In the light of that, would you support increased borrowing powers for the Scottish Government to enable those much grander ideas? I am a bit concerned that through the course of this discussion, we are intending to focus on the small taxes, the LBTT and so on, rather than the shifts that really make a difference in terms of economic growth. Would you support that? I would not be against it because I want to see Scotland thrive, I want to see our economy grow, I want to see us having a good quality of life, so anything that we can do to improve our economy and take Scotland forward, I would support. Thank you. Going back to domestic rates and empty properties again, I am from the north-east to Scotland and I have been really concerned over the last few years, the amount of, I would not say, old commercial properties being knocked down just to save on domestic rates and I guess that has got an environmental impact, new premises being knocked down, it is going to have an impact on valuation role and all seems a bit short term. Is that something you would agree with and what do you think could be done over the next couple of years to mitigate that? It is a concern. I went out to visit some of our towns at the weekend just to have a look and see how they are doing and some of them look quite tired, quite sorry, and lots of agency boards on them for shops to let. Again, it indicates that people are trying to let these properties, but the demand is just not there, particularly during the pandemic. I share your concern that, over time, we will lose buildings because people cannot afford to keep them. What is the solution? We as an organisation are working and we are collaborating with Scottish Government town centre initiatives. We are talking to councils and we are trying to come together to come up with ideas. Some of the things that are being talked about are permitted development rights and things like that to give owners the ability to develop these properties without needing a full planning permission or a new tool to go through a formal application process. There are various initiatives that are being looked at. Again, we need Government help and intervention. We need to improve our landscaping, our townscaping and our streetscapes and make the town centres more accessible. We need to improve public transport and get people in there. We are not really encouraging cars, so we need to get other ways to get people wanting to come back to the town centres. I share your concern. Again, that is why we are highlighting the empty property rates, because we think that it is a disincentive investment. For the reasons that were mentioned about retail in time, we are going to see further decline in our built environment. Has there been any analysis done on the valuation role that has probably decreased because buildings are being knocked down? In town centres where buildings cannot be knocked down, because they are probably listed, there is still going to be a loss of income from that. Has there been any analysis done of what the impact on the Scottish Government's budget is? I do not have any figures for you. I am asking to try to get more research done about impacts through Covid. That might be one of the things that we can pick up, but I do not have any figures for you at the moment. I am going to touch on a couple of areas that we have not covered so far. One is that we tax that Michelle mentioned, the land and buildings transaction tax, which still brings in a few bob. I am quite intrigued by the difference in the submissions in terms of that. Kevin Yous said that we are particularly concerned about the 10 per cent tax band and believe that its threshold should increase to half a million pounds. However, Joanne, in your submission, you talked about that falling temporary lease of stamp duty land tax, obviously, south of the border for first-time buyers—sorry, 2010, 2012, before LBT came in. HMRC undertook an evaluation that concluded that the majority of the 1 per cent tax relief between 15 and 70 per cent of that was in fact capitalised in higher prices. Have you done any assessment on what the impact would be in terms of revenue for that? Obviously, there is not much point, and I was increasing the threshold to try and assist the sector. If at the end of the day all it means is that prices are put up and revenue declines, and no one is any better off in that regard. No, we have not got figures for you on that, but I could probably come back to you on it and we can try to get some calculations done. Our view was that it is inhibiting the ability of families to move to larger properties because you have 10 per cent tax above 3.25 per cent, whereas some of the house values and prices in some of our larger cities and suburbs are exceeding that. We are just making the point that it might be helpful to families to think about that again. Do you think that it is LBT or house price inflation that is more likely to inhibit people moving to larger properties? In places such as Edinburgh, we are talking about North East, where you can buy a palace for £0.5 million in a house. I have a five-bedroom detached house with a garage and it costs me £145,000, so there is a big difference between house prices across the country. What is your view on that? We do not know for sure what the result has been of the measures taken during Covid. That previous research suggests that you cut LBT or SDRT. It is partly because you are sending out the message to people that they are paying less tax on it. That creates higher demand, presumably, so that pushes the prices up. In terms of what is stopping people moving, it has been a suggestion that prices have gone up quite significantly during the recent period in which the LBT was cut and where SDRT has been put in the rest of the UK. There is a point about potentially needing to review the rates and thresholds. To some extent, it has been in place since 2015. There have been changes since then, but it is always important that, if the average house price has now gone up significantly since the introduction of LBT, there has to come a point where you review rates and thresholds to see whether they are still relevant and appropriate. We would always suggest that you need to increase the tax take from the Scottish income tax to freeze the thresholds, so that, as people's incomes go up, they pay more. That is a way of increasing the tax take in any tax, but we would suggest that you need to review any amounts that are fixed in legislation, whether they are reliefs, thresholds or allowances. The high street is under pressure. We have already heard and discussed it. We have talked about a 50 per cent increase in online sales. If the UK Government decided to tax online retail to try and create a balance in high street, is that something that you would support? If so, do you feel that some of the revenues that are raised should be assigned to the Scottish Parliament? We are using those retailers in the dark buildings. If the UK Government raised it, it could be part of it, but it could be assigned to Scotland. Joanne, do you feel that, if the UK Government did go down that road and assigned it, that would allow the Scottish Government to possibly even reduce rates in high streets? If more money is coming in, for example—obviously, that is not happening yet, but if it was done—that would allow the Scottish Government an opportunity to reduce rates and make the high street more competitive? Obviously, it depends on how it filters us through in the block grant. Potentially, if you get more money from another source, it allows you to look at reducing taxes in other areas or bringing in different reliefs to assist in changing the balance of the make-up of the tax resources that you have. Keven, on compulsory sales orders, it was a commitment, a manifest commitment of the SNP in 2016. It was not delivered in the last Parliament, partly because of the Covid pandemic. I have asked a written question about that. I was referred to a question that was submitted by Paul Sweeney. When I went to that question, it was that question that has not yet been answered. I wonder whether a body swerve is there. I wonder whether compulsory sales orders are something that the Scottish Property Federation would support. A lot of high streets and other streets have been blighted by buildings that have been left 15, 20 years empty and it has been difficult to get them moved on. I know that, in the last Parliament, there was cross-party support for that. Is that compulsory purchase? Compulsory sales orders. Basically, someone has got a delict building that has been sitting on for 20 years by an old primary school, an old pub, an old house or whatever and they just aren't doing anything with it. Planning permission has long since passed away with it and nothing is getting done. If nothing is done within three years to refurbish it, it could be forced to sell at auction or whatever. We explored that at the local government committee and there was, as I said, cross-party support for that. Is that something that the Scottish Property Federation has looked at in terms of being able to help the high street to make it more attractive for people? Do you have any comments on that? Yes. It is something that I have worked with in the past. I know that it is compulsory purchase orders and that is what we have implemented in the past. Is that something that is being forced to sell at auction or whatever? I am sorry, I am forcing him to sell it. We, in talking in part of our collaborative approach to working with the Government and the councils, look at all those options. If someone was being deliberately obstructive to an overall benefit for a community or a high street, we would support that they are forced to dispose of the property or for the council or whoever to come in and buy the property to enable improvement to a town centre or another situation. We would be in favour of that. We want to see good high streets and good public buildings. We want to see investment. If people are beliting that, we would be supportive of the need to be the appropriate rules and regulations and how it goes about it. However, we would support the principle of that. I probably would not comment on that. It is not really in our remit. I was not sure, but I will give you the opportunity anyway. We have come to the end of our time. I would like to thank our guests. I will have a two-minute break to allow our witnesses to depart and then we will continue with the rest of the session.