 Felly, yn y cyfnod y Llanfformaidd yng Nghymru yn y ddiffrwng 14 ystod 2019, fe fyddai'n gofyn i fynd i ddifrif i ddechrau, rydw i chi'n rhan o'r ddweud o gyflwydd o'r ddiffrwng ffons o'r cyfnod i ddiffrwng sylwau, fel rydych chi'n gwybod bwysig ar gyfer gwaith y system. The first item on the agenda is for the committee to decide whether we wish to take agenda item 3 and consideration of all future evidence on financial scrutiny in private. Are we agreed? Thank you. The second item on the agenda is to continue our work on financial scrutiny, and this morning we'll be hearing from three panels of witnesses. We've got our first panel with us now. Good morning to you all. We've got Elaine Lorimer, the chief executive, and Mike Paterson, the head of tax. We've got Don McGill, the deputy director of environmental quality and circular economy for the Scottish Government. Good morning to you all. Ms Lorimer, I believe that you have an opening statement that you would like to make. If that is okay, that's fine. Thank you. I'm very conscious. Good morning, everybody, and thank you very much for asking Revenue Scotland to come and speak to you today. I'm conscious that it's the first time that we have met your committee. As Scotland's tax authority, we are responsible for the management and administration of those taxes that are wholly devolved to Scotland, which includes Scottish landfill tax, which was introduced in 2015. So far, around half a billion pounds of SLFT, as we call it, has been collected by us to fund Scottish public services. We work in an innovative partnership with SEPA, which creates the opportunity for our tax expertise and their environmental and industry expertise to be used to maximum operational effect. Tax can be used to bring about positive behavioural change, as well as, of course, be a source of revenue to fund Scottish public services. We see change happening in the landfill industry to be ready for the biogradable municipal waste ban, and we also see positive changes in the way in which waste is treated to reduce the amount that is going to landfill. We also know from experience that tax can drive negative behaviours or negative consequences, and there will always be individuals or companies who either choose to push the boundaries of the tax as much as possible to minimise their tax liability or, indeed, in extreme circumstances choose not to comply. For SLFT, that can result in more waste going to landfill than the policy intent and less recycling or, indeed, legal disposals of waste. This is where Revenue Scotland, as the tax authority, comes in to undertake compliance work to make sure that there is a level playing field for taxpayers and that everyone is paying what is properly due. If the policy is well constructed through legislation, the desired behavioural change should come as a result. We know from speaking to taxpayers and their agents that what they seek is clarity and stability in the tax system. They want to be able to plan their affairs with a reasonable amount of certainty. In the creation of taxes, Scotland follows a set of principles established by Adam Smith, certainty, equity, convenience and efficiency. From Revenue Scotland's perspective, that means that any tax should be clear and should be readily understood and should be underpinned by legislation that is robust and coherent. That the amount due is fair and proportionate to the taxpayer's ability to pay and that the tax should be easy to administer and collect so as to keep the burden of administration low and that the consequences of not complying are clear and straightforward for the tax authority to apply. In our view, those principles stand up well in the consideration of wider fiscal measures, other than tax, such as, for example, levies, to make sure that the policy is robust and can be successfully implemented. That was very helpful. My opening question is about what powers the Scottish Parliament has to introduce environmental charges. I want to ask a supplementary question about how it differs between the charges of tax and the levy. Maybe, Ms Lorimer, you would want to elaborate on your final point. The powers that the Scottish Parliament has in relation to taxes that we as Revenue Scotland would collect are the taxes for which they have wholly devolved policy competence. My understanding is that a Treasury and Scottish Government have agreed a set of criteria that would apply to any future wholly devolved tax that could be devolved to Scotland, and it is those taxes that our authority is responsible for. In relation to levies, the distinction between a tax and a levy can be quite fine. From our perspective, the taxes that we bring in, the revenues from that, go straight to the consolidated fund. The revenue income to the Scottish Government, a levy might not necessarily come straight into the consolidated fund, and perhaps Dawn could speak about levies more generally. There are a number of taxes that the UK Government and the Scottish Government have agreed should be devolved to Scotland in policy and collection terms. There are a number of specific taxes that there's agreement are devolved. You probably know what those are. There are things such as the Scottish landfill tax. There is also a power that allows the Scottish Government to create new environmental taxes, but that power requires us to seek the agreement of the Treasury, of the UK Government, before we establish such new environmental taxes. Then, as Alayne alludes to, there are things that aren't taxes but are fiscal measures, levies, charges and so on, and where they are for a devolved purpose and environment is generally devolved, then there's a good chance that that would be devolved. However, as Alayne says, there can often be a complex legal analysis required of whether something is a charge, a levy or a tax. In general, levies are probably easier to argue if they apply to the devolved environmental policy. Given that we have had a commitment from the Government to go a lot further in terms of emissions reductions just in the last week, do you feel that the Scottish Parliament has the powers that it needs in this area? I'm not asking people in the civil service for their opinion, and that's not a space that you'd like to be in. However, to deliver it on environmental policy objectives, not just at the moment but potential future ones, which are going to have to be a lot stronger, do you feel that there's maybe some other powers that the Scottish Parliament requires to do that? Again, as you can have alluded to, that's probably a question for ministers. I think that if you were to ask ministers, would they like the power to create new environmental taxes without requiring permission from the UK Government? I suspect that they would say yes. Is there anything that you see happening in other countries where they are going faster to realise the environmental objectives that would be useful for the Scottish Parliament to have if you look at others? Or is that something that you maybe don't want to think about? Again, I'd be reluctant to comment without any public statement from ministers to that effect. Okay, we'll move on then. John Scott. All right. Thank you very much. I'll just talk a little bit about the current status of environmental taxes in Scotland, and can revenue Scotland set out what the key challenges and lessons that have been learned in managing the Scottish landfill tax and how it has evolved over the past five years? How are you feeding that into the current consultation and the lessons learned, I suppose, on the devolved taxes? I definitely think that that's one for me. Obviously, revenue Scotland first started collecting SLFT in 2015, so we have four years of operational experience of collecting the tax. I might be useful for the—I alluded to it in my opening statement, but we're useful, perhaps, for the committee to know that the way in which ministers decided that we should collect that tax involved us being able to delegate some of our function to SEPA, that was recognising that, in Scotland, the collaborative approach that we like to take when we are delivering public policy enabled us to work closely with the environmental regulator, which enabled us, therefore, as soon as we started operating the tax, to do so in concert with SEPA. So, when we go out on site to look at landfill to deal with the operators and work with the landfill industry, we have the environmental regulator who really understands the industry there with us. That meant that we were able to keep our costs as an organisation low, meant that we weren't building up that level of expertise that was already there in a different public body. It also means that, when we are doing our compliance work, we can rely on the technical, scientific and analytical experience that SEPA has within their organisation. What we also found, though it's fair to say, when we started our work in landfill tax, was that this was a tax that HMRC hadn't prioritised in the same way as you would expect us to do. We only have, at the moment, two taxis that were responsible for SLFT and LBTT. Therefore, the approach that we took going out in concert with SEPA was a new thing for the industry. It's meant that we've been able to really get to understand the industry. It's meant that we've been able to really see what's going on in the industry. As a result of that, it's meant that we've been able to do a level of compliance work that wasn't perhaps done previously. That has with it environmental benefits, because it means that what we're doing is we're making sure what goes to landfill is in line with the legislation and the policy intent. It also brings with it, of course, revenue benefits, although that's not our major driver. Our major driver is to make sure that there is a level playing field across the industry in Scotland, because it is, after all, a commercial industry. Those are the lessons, if you like, that we have taken from delivering on the tax of the first four years. Excellent, thank you very much. How important has the landfill tax been in reducing waste going to landfill, and how has the tax interacted with other measures, including the landfill taxes and the rest of the United Kingdom? Of course, because Scotland has devolved responsibility for SLFT, we now have, in Wales, its own Welsh revenue authority, which has its equivalent to SLFT to landfill tax. We now have three tax authorities, if you like, operating in the United Kingdom in the landfill tax space. That means that, because there is devolved competence to Scotland and to Wales, there is, of course, the opportunity or consequence of devolution for the policies to diverge slightly. You could say that that is what happens as soon as you devolve something. It gives the relevant Parliament the opportunity to set the tax in the way that they would wish it to be for their country. What I could say by way of assurance to the committee is that we work very closely with our equivalent tax authorities, such as the BHMRC for England and the Welsh Revenue Authority for Wales. Of course, some of the businesses that we are dealing with in landfill, they do not stop at the border. They are indeed UK-sometimes-wide businesses. We work closely with the tax authorities so that we understand how our approach is diverging and how it is diverging, but it also enables us to share using properly regulated information sharing powers. We can share information in relation to our compliance work. I was simply going to comment on the bit about the effectiveness and the link with other policy measures. It is fairly self-evident that landfill has been steadily reducing in Scotland since the introduction of the landfill tax. In terms of household waste, for the first time last year, we have recycled more than we landfilled, which was a fairly significant milestone. However, what I would say is that it is not the tax on its own that has achieved it. The tax has absolutely been a central measure in achieving that reduction in landfill, but it has operated alongside other policy measures such as improving recycling infrastructure investment in local authority, kerbside collections, and so on. It is an example of where the tax is central to achieving an objective, but where the overall objective might require other measures in addition to the tax in order to get the full benefit of what you are trying to achieve. I am looking for quite a short answer. The subject of data sharing, and you talked about sharing data between the three tax authorities in the island, but you are also talking about clearly data sharing between SEPA and Revenue Scotland. Are there any inhibitions in the current rules that are covering data sharing, both in relation to our corporate data, where I suspect probably not much of a problem, but personal data, particularly under the GDPR rules? I think that my colleague is going to take that question. We have not come across any significant barriers that I am aware of to date. That is fine, thank you. Moving swiftly on, what are the expected implications for tax revenue and on the recipients of the hypothetical revenue, that is to say the Scottish landfill communities fund of the forthcoming 2021 ban on biodegradable waste going to landfill? We know from current Government forecasts and Scottish Fiscal Commission forecasts that the expectation is that we will see a significant reduction in landfill tax revenues. We currently bringing in around £150 million a year in landfill revenues and we are expecting that to drop to around £30 million, if the forecast is correct. Of course, the forecast is dependent on the industry being ready more broadly for landfill to be reduced to that effect. And Brexit, what lightly effect is Brexit going to have on that? I am afraid that I have no view on that at all. Beyond your trick. Beyond my. The effect of Brexit on landfill and landfill tax, the answer is that it should be very little. We have enough landfill capacity in Scotland to deal with the waste that we generate in Scotland. If it was only, for example, there was a problem that occurred in terms of waste capacity in England and waste started flowing into Scotland, it would be a significant effect, but that is very hard to judge. I am fine, that is good, I find that very reassuring, thank you. Has there been consideration of taxing other parts of the waste hierarchy, for example incineration? There is no active work in the Scottish Government at the moment on an energy from waste tax or an incineration tax. I have heard the words incineration tax mentioned in waste management circles as it is something that will come next, as the next step up the waste hierarchy to try and push things up more into reduction and reuse. I have heard people speculate on it in the waste management world, but there is no active work on an incineration tax in the Scottish Government at the moment. So what should the objectives of the forthcoming aggregates levy be and what involvement has Revenue Scotland had so far in designing it and are you looking to other countries which have used aggregate levies? Well, of course, the policy for aggregates levy is for the Scottish Exchequer, not for Revenue Scotland. I am afraid of what international comparisons and what the plans are for the tax. That is a question for the Scottish Exchequer, not for me. Revenue Scotland stands ready to work with Government in the way that we have done with our other taxies to give our technical experience in terms of how a tax such as that could be administered well. So my understanding is that the Scottish Government has commissioned a report from environmental consultancy, Eunomia, on some options around aggregates levy and the future of it to know that report. As I understand it, it has not yet been completed and published, but there is some active work there on going from my tax policy colleagues to look at future design options for aggregates levy. So is Revenue Scotland advising the Scottish Government on any options for further environmental taxes that you can tell us about? The way in which we operate with Scottish Government is obviously that they are the leads in relation to policy. Therefore, once they come up with a policy proposal, we are very happy to work with them in terms of how that could be implemented from a tax authority perspective. We offer our technical expertise once that policy becomes clearer. Probably the biggest thing that is happening in terms of fiscal measures at the moment in the environment world is reform of the packaging producer responsibility system, which is not a tax, but is a kind of fiscal measure in that it tries to internalise some of the costs of dealing with packaging waste at the end of life. There is a major proposal out at the moment for a reform of that, where the Scottish Government is consulting jointly with the UK Government, Welsh Government and Northern Ireland on the major reform of that system to come in over the next few years. That is probably the biggest thing in the landscape at the moment in terms of a significant proposal for change. Is that to do with plastics? It is all types of packaging, so it is plastic, cardboard, wood, metal, anything that is essentially used in consumer packaging. Right, not very helpful. Finally, presumably if an environmental tax is working as it should, revenues should decline over time, so what does that mean for managing environmental taxes in particular, where revenue is hypothecated to support environmental projects? Is funding going to dry up for these projects? My personal view is yes, unless there is an alternative mechanism put in place, the way that landfill communities fund works at the moment, as you have identified, is that it is a percentage of the tax that goes to that fund, so if the tax revenues fall, unless there is a replacement put in place for it, the revenues associated with that fund will fall too. Right, that is great, that is fine, thank you very much. Finlay Carson. Morning, I am going to move on to the carrier bag charging. What information and evidence is available on the impact of the 5P bag charge and what effect it has had in Scotland, and how are those impacts recorded? The carrier bag charge was introduced in October 2014. The main piece of information that we have is from a year on study that was published in October 2015. It suggested that something of the order of £6.7 million was being raised from the charge at that point, and that the charge had achieved an 80 per cent reduction in the use of single-use carrier bags at that point. We have not since done a central collection of data for the charge, so the October 15 study is still the most recent information that we have on the impact of the charge. Has policy divergence in the UK caused any issues? How did you manage those? There are not any significant issues with divergence that I am aware of in terms of the way that carrier bags work. The nature of it is that people tend to shop in their local shop, if I can put it that way. There are not huge cross-border effects of the carrier bag charge that I am aware of. Of course, England Wales then brought in to effect their own carrier bag charge. They have recently brought forward proposals to adjust the design of their carrier bag charge to be much more like the Scottish designs. To the extent that there were any border effects, those are reducing and will reduce. What is the rationale behind a potential increase in the charge from 5p to 10p? Has that been partly driven by a preference to have a UK-wide approach? That is very much a Scottish proposition. Obviously, the UK Government brought forward its proposals. However, to be honest, the bigger driver is much more about just the normalisation of consumer behaviour around the carrier bag charge. There is certainly some anecdotal evidence that the initial effect of the introduction of the charge, the effect that it had on consumers in that initial phase, has gradually normalised and faded out at least a little bit. We think that increasing the charge to 10p will then give that another little step in terms of consumer minds and give them a further jolt, if you like, to consider ways to change their behaviour to avoid the charge. Do you see an end point? Should the Government have ambitions to phase out single-use plastic bags altogether? You said that it would tail off. Should a band be on the table? Most of the big retailers have made significant moves on this on a voluntary basis. A lot of them have moved away from providing single-use bags that they only sell in a bag for life. The market by itself has adjusted a fair bit in this space in terms of the activity of the big retailers. We might need some more information about where we currently stand and how things have changed since October 2015 before we considered any further measures of the nature that you are describing, Mr Carson. Earlier on, we talked about the difference between taxes and levies. With the plastic bags in mind, what are the implications of the charge being a levy rather than a tax? For example, how effective are the voluntary arrangements between retailers and revenues for good cause being? The real difference between a levy and a tax is that, in a levy, there is no revenue-raising function for Governments. There is no central collection of any revenue. It is for the retailers themselves to decide how to use the money that is raised and how to distribute it. A number of them voluntarily report through a Zero Way Scotland portal on money that they are donating and some information about how they are using it. There is an enforcement function in the regulations, but it is never to my knowledge being used. Our understanding is that compliance with the objectives and the rules of the charge is very good. I am not aware of there being any level of complaints about compliance as it currently stands. Finally, what lessons can be drawn from the carrier bag levy so far as it has been applied in the future for other environmental charges? One of the lessons that a lot of people have taken from the carrier bag charge experience is that quite a small change can have a big impact. It can be an effective way of changing consumer behaviour, even at a relatively low level. There are issues about how easy it is to change from the thing that you want to get away from to an alternative and in the carrier bag space. One of the things that is obvious is that there was a ready alternative available, which is the bag for life or the canvas bag or alternatives available. Those are the sort of lessons that I would draw from the experience to date. Can I ask about the expert panel on environmental charges? What are its main purposes? Who sits on it? When will it be expected to report? Its purpose is essentially to advise government on the use of charges and other measures for addressing our throwaway culture. Its focus is very much on single-use items. Its main focus today has been on single-use plastics and on coffee cups. The area in which it is furthest down the road is in the disposable coffee cups and the disposable beverage cups, whichever term you want to use. The area in which it is pretty close to providing an initial set of advice to Government. It has also started looking at other specific things such as plastic straws, but it has probably got a little bit more work to do in that area before it reports to Government. My understanding is that it is pretty close to reporting to Government on coffee cups. For example, it has been out last week testing some initial propositions with industry, NGOs and other stakeholders. My understanding is that the next step is that it will assimilate some of the feedback from those sessions before trying to finalise some report to Government on the disposable coffee cups issue. In terms of those single-use coffee cups, has the group been looking at perhaps differentiation in the way that a levy is applied? A compostable coffee cup, for example, should be charged at a similar level with non-compostable coffee cups? What they have been doing is looking at a range of evidence out there from various studies that have been done on both charging and discounting for coffee cups and different designs of trials and studies and pilots that have been done in different parts of the country and internationally, and they have looked across that evidence and tried to draw some conclusions about the effectiveness of different designs of charges, whether they will recommend any differentiation in terms of material types. I think that their focus has been very much on the traditional design of disposable coffee cups and how best to address some of the sustainability issues that exist with those as it stands. As part of that investigation, they have been looking at capacity in infrastructure, say, for composting or treating conventional disposable coffee cups. Has that been done? They have looked very hard at the current evidence around what is the infrastructure that exists for recycling of the existing model of disposable beverage cup. They have also looked at how various trials have influenced the level of recycling, how different incentives and infrastructure changes have impacted on the recycling rate for that particular waste stream. They have looked at all that kind of evidence. What about the potential for different levies or approaches across the UK? We have seen initial interest at UK level now. There is more of a focus on getting more recycled material into disposable cups. Is that a Scottish focus, or is there a look at wider intra-UK approaches? I suppose that you have been here before with deposit return schemes. Obviously, you have come to a conclusion on that. I am just interested to know where you are at with this. The panel is looking specifically at the Scottish context, although it has looked at evidence from across the UK and internationally. That said, it has acknowledged that there are big UK initiatives coming in the space. I mentioned producer responsibility for packaging, the reform of that. That will impact on coffee cups fairly significantly. They have looked at a range of measures across the waste hierarchy, across the product cycle, if you like. It is not just charging that they have been looking at. They have been looking at producer responsibility and other measures to encourage recycling. The main focus of their work is in the Scottish context on coffee cups. At the moment, we have found a major issue with cross-border effects on that, but we are still awaiting their final advice. Is there a need for certainty around the wider producer responsibility scheme first before moving on to DRS, for example, or Lavion on coffee cups? Is there a potential run-intended consequence if you do not have that wider framework of producer responsibility? There is definitely a value in making sure that the different components are designed in a way that they complement each other and work together. Certainly in the work that we have done as officials, we believe that that is eminently possible. It should happen fairly naturally if you get the design of the schemes right and that they are incentivising different things in slightly different parts of the market. The view that ministers have taken is that they do not think that there is a need to wait on producer responsibility before finalising the design of the DRS or moving ahead on things such as coffee cups. They need careful design to complement each other, but the view that ministers have taken is that that does not stop you from acting swiftly on the things that we can act on in Scotland. Will the expert panel continue in the future? If so, what is in its future work programme? It was set up with a two-year lifespan, so it started in June last year, so it is nearly a year into its work. As I say, its first major report will be on coffee cups as our expectation, but they have other things that they have started working on on straws. They have also had papers on things such as disposable cutlery and plates and things like that, so they will start moving on to other things over the course of the coming months. They still have another year to do further reports on other items. You have touched on the producer responsibility schemes. Do you believe that those need to be underpinned or enforced by levies and tax, or can they be driven by consumer choice? If I talk about the producer responsibility scheme for packaging, which is the big one, really the purpose of that producer responsibility scheme is to try and internalise in what producers pay the cost of dealing with the waste at the end of life, which would not naturally be built into the price of the packaging or the item that goes into it. It is based on a system of producer fees, so the producers, retailers and so on in the chain have to pay a fee for putting that material on the market. The current system is a very complicated system. It is based on a system of producer responsibility notes, which producers have to buy a certain number of based on the amount of material that they put on the market. What the current consultation is looking at is shifting that significantly on to the possibility of a range of different models that you might choose to reform that. By far the biggest thing in there is that the current producer responsibility scheme for packaging is only recovering about 10 or 15 per cent of the cost of dealing with that material at the end of life. What the EU circular economy package requires is that we move that much towards 100 per cent of the cost. The new scheme will raise significantly more money in terms of producer fees when it is introduced in around 2023. Are those consumer fees within or set by the producers, or is that likely to be an environmental labour and environmental tax? At the moment, it is set by the market in terms of the cost of producer responsibility notes and the export notes, which are a equivalent form of them. There is a market mechanism at the moment, which is incredibly complex to try and explain. The proposals for the future include a number of models that the UK Government and the other Governments have set out. Four different models that the future system could take from an expansion of the current system to something that is based much more on a producer fee. Is that a leviour or a tax? That would need a bit of further analysis before I could be absolutely sure in saying whether that will end up looking like a leviour or a tax in the future. That is a subject of a single-use plastic packaging particularly. I think that it is pretty obvious the difference between the UK supermarkets and maybe if you go into the continent like Spanish or French supermarkets, we have a lot of our fruit and veg wrapped, whereas if you go to a supermarket in Spain, it will be loose. Is there anything happening in other countries in Europe where is that a cultural thing or is that because they have more strict levis and taxes around that? Are there any lessons that we could be learning from those large supermarkets that do not have the same level of plastic packaging as they do in the Scottish, English, Welsh and Northern Irish stores? I am not aware of it being a tax issue in other countries that is driving this. I suspect that it is much more of a cultural issue. The packaging producer responsibility reform will start to bear on this issue in that essentially those people who use plastic in other packaging will be paying a lot more through the producer responsibility scheme for that packaging, particularly if it is difficult to recycle. The aim of the producer responsibility reform is to drive producers and retailers towards the absolute minimum use of packaging and to use packaging, which is more recyclable, so that is the absolute aim of the reform of the scheme. I want to explore a bit further the priority areas for new environmental charges and interaction with other policy tools, so whichever the panel feel it is appropriate to answer. As we have heard very helpfully, the expert panel's focus has been on single-use plastics. Can you possibly be viewed on exploring the big ticket areas that should be prioritised? There has been a lot about textiles recently, and you will know, but just for the record, the environmental audit committee has looked at the sustainability of fast fashion, for instance. There has also been issues around the sustainability of horticultural peat and its extraction. I wonder if you could highlight any areas that you think or you know are being looked at and how we can be as innovative as possible. There was work done some time ago on a hit list of what are the problem issues in the waste stream, and it was done with Dewey Scotland and SEPA and others. Aside from the single-use throw-away things, the big ticket items are tyres, mattresses—there is an issue about carpets and textiles, furniture—I think is on the list as well. There is a hit list of other things that are known problems in the waste stream, if I can put it that way. One of the things to be aware of is that the UK Government and its waste and resources strategy speculated on whether or did start to look up whether further producer responsibility schemes should be brought in for things such as tyres and mattresses and some of those other problem issues. I think that that is a definite area that we are interested in discussing with the UK Government. The three existing producer responsibility schemes, which are for packaging, for waste electronic and electrical equipment and for end-of-life vehicles, are regarded as reasonably effective. Are there some of those other areas that we should be expanding producer responsibility measures into? Is there a view on how the Scottish Government should prioritise areas for new environmental charges in terms of process and what weight should be given to different factors such as should they be principally based on the potential for positive environmental outcomes or existing levels of damage, or do other factors need to be balanced against the cost of administration, revenue potential and public and industrial acceptability? Is there any comments from any of you on that? Elaine McLean will probably help me a little bit here, I hope. In terms of taxes, there are two purposes. One is to change behaviour and one is to raise revenue. Some taxes are a combination of the two. On the environmental taxes, they tend to have to be slightly more biased towards the behaviour change than the revenue raising. Beyond that, the principles for the design of environmental taxes are much the same as for most other policy measures that are about fairness, proportionality and trying to avoid regressive effects. Elaine McLean, I hope that you can help me a little bit. Yes, that's right. It's the Adam Smith Principles that I referred to right at the very beginning. I think that from the administrative perspective, we want to be introducing things which are the cost of administration that is kept low. Our tax authority, for example, started from the basis of being digital by default. The impact on the taxpayer in terms of making the return is all done online. The fact that we have the relationship that we have with SIPA means that our administrative costs are well below the comparable tax administrations. Those are the factors that need to be taken into account in designing any scheme. The other thing that I would say is that it is important not to underestimate the importance of clarity, because if a new tax or a new levy is being introduced, we want to make sure that everyone understands its obligations so that the policy intent is delivered at the end of it. Sometimes there is a danger that tax legislation has a history of being complex. If we have the opportunity in Scotland to design things from scratch, our starting point would be to try and make this as straightforward as possible. What sort of analysis is there of any regressive aspects of taxes? What effect would it have on different parts of the population and people on low income and that sort of issue? It is difficult for me to answer. We know that, in Scotland, the way that LBTT, the lands and buildings transaction tax, is designed in a way that it is not regressive in that way. Landfill tax is an entirely different type of tax, so I am afraid that I am unable to comment beyond those. Did you have a comment on that? No, not beyond that. Landfill tax is paid by a landfill operator, so how that feeds through to the ultimate consumer is some way further down the chain, so the impact of the tax is potentially more difficult to measure, but that is where it brings into the measures. How most people pay for their waste management as a household is through their council tax, which has its own… I am sure you have your own views on the progressiveness of council tax, but that is the way that most people pay for their waste management. Lastly, from my perspective, for any of you to answer as appropriate, there are other tools in the box other than taxes and levies in terms of our environmental goals, of course. Are there key considerations? Well, there are, of course, but that is not very well put, but whether a tax or levy is the right approach in contrast with other tools, such as regulation and what my colleague Fin Carson has already raised about a voluntary approach. Is there any comment on any of that? Do you want to answer that, Mike? I think that the answer that my chief executive, Elaine Lorimer, gave earlier on in terms of revenue Scotland working hand in hand with the regulator provides a unique approach, indeed one that has now been copied across the UK. I think that the ability to do both or see both sides of the end-to-end analysis of what is happening in a landfill site. It is about horses for courses as well. It is what is going to be the most effective measure. The issue about cotton buds, where we have just taken the decision there that what you need to do is ban the plastic stem cotton buds, because a charge or a tax in that area probably is not going to change consumer behaviour to the same degree. It is all about an analysis of what is going to be most effective and most proportionate in changing consumer behaviour often. It is that judgment that needs to be made. In a number of those areas, I referred to landfill earlier, the tax might be only one of a range of measures that you might take to try to address the bigger issue, which is about waste minimisation and recycling. Do you expect me to say that, at the end of the day, we also need to raise revenue in Scotland to fund our public services and so on? Another trade-off is how do we raise the revenues that we require to be able to deliver the policies that the Government wants to deliver? Angus MacDonald, if I could just go back to Claudia Beamish's first point, which raised the question regarding horticultural peat, we know that RSPB Scotland and the SWT have suggested a levy on horticultural peat as part of possible measures to address the issue of unsustainable peat extraction. I asked the cabinet secretary about this some time ago, and she said that she did not think that we had the power to deal with that. Has that been looked at recently? Is there any intention to introduce it? I am not aware of work on a levy for a horticultural peat. What I am aware of is that, in significant regulatory measures around extraction of peat for horticultural purposes, I have not got to hand with me today. My understanding is that, essentially, you need a licence for large-scale peat extraction, and that a much stricter view is being taken of renewing those licences where the purpose of extracting the peat is for horticultural products. Fyng Carson? As you are aware, we are currently looking at a climate change bill. The committee was quite concerned about the lack of information when it came to the finances around about the bill, and last week the First Minister declared a climate change emergency, which would suggest that we need to put new actions into place a lot more quickly than we thought otherwise. Would that suggest that there is likely to be more emphasis on tax-raising to generate the income that you have mentioned to address some of those climate change issues, but also to accelerate consumer behaviour? That is not something that I am able to comment on, because that would definitely be a matter for my colleagues in the Scottish Exchequer who look after tax policy. I think that that is probably a question for ministers, as it currently stands, with a bill active in Parliament. I think that that is probably, at the current time, a question that is much better directed to ministers, I think. Well, here is a hypothetical question from a tax-raising point of view and you spoke, minister Lorimer, about raising revenue being important, and presumably important in a sustainable way. As those taxes that are introduced deliver behaviour change and therefore the taxes themselves reduce over the long term, in terms of having the money that you had previously enjoyed constantly reducing, does that of itself mean that you will need to continue thereafter to keep on introducing new taxes to keep you in the standard of choice to become accustomed to that? Well, I would be the choice as to whether new taxes are introduced or not is not mine. I am simply the administrator who delivers the collection of an administration of taxes once Parliament has passed the requisite legislation. However, clearly Scotland requires a certain level of revenues to be able to fund policy, and that is a choice for ministers and for parliaments as to how they raise those revenues. However, we stand ready certainly to collect any taxes that we are asked to do. Thank you. I have a, before we close this session, something that was mentioned really early on in the session in which I rang a bell with myself and my colleague talking about non-biodegradable waste or non-recyclable waste and a no-deal Brexit situation. We heard from colleagues in the waste sector that there could have a situation where that waste, which is normally exported on to the continent, could be building up at ports. In a situation like that, where you mentioned that there was quite a lot of landfill capacity in Scotland to deal with that kind of waste, what would happen in a situation where maybe the rest of the country did not have that capacity? In terms of tax, how would that work? How would that tax be collected if there was a flow of that waste into Scotland and dealt with? And how would that affect our targets in terms of... I'll let you go, John. There's two things I want to say here. One of the key points is that we don't want to landfill recyclable waste if we can at all help it. For some of the waste that's exported, it's recyclable waste and it's only as an absolute last resort that you would end up... It would only if we were in a real crisis situation that you'd end up even thinking about landfill for that material. But then in terms of the technicalities of the tax... Well, it's the landfill operator who's responsible for the payment of tax and therefore if the waste was disposed off at a landfill site in Scotland, it would be the landfill operator for that landfill site that would pay the tax, which would therefore mean that it would come into the Scottish Consolidated Fund. It doesn't matter where that waste comes from. It's where it's disposed off. Again, in terms of the waste targets, I think it's where the waste is generated that our stats are based on rather than where it's disposed off, but I think I'd need to double-check that. I don't think there's any more questions from colleagues. Thank you very much for your time this morning. I'm going to suspend this meeting briefly to allow the change in panel. Welcome back. We now move on to our second panel of witnesses this morning, and I am delighted to welcome Michael Kerrns, economic adviser to the Office of the Chief Economic Advisor and Urs MacKahn, Deputy Director of Economic Strategy in the Office of the Chief Economic Advisor for the Scottish Government. Good morning to you both and thank you for coming in. It is our days, and I realise that what we're about to ask you is about something that has only just begun in terms of the wellbeing economy Governments. Can you, for starters, set out how the wellbeing economy Governments came about, who's involved and what the Scottish Government's objectives in engaging and with it in coordinating are to get us going? I'll kick off by just saying something about its inception, how it came to be, how we got here and my click and move pick up in terms of who we've been engaging with, and we can talk about next steps. We're still really fresh from our meeting just last week, so our first policy lab, which is a part of a core part of the wellbeing group of Governments, kind of function. We had that just last week on Wednesday and Thursday, so we're still trying to reflect on the discussions of the day, so bear with us as we catch up and talk about them at the same time. You'll know that we launched our economic strategy in 2015, which set out our approach to economic growth in Scotland. Within that, there was a new concept of inclusive growth, and that firm emphasises that our growth had to be a different approach. It had to be more about inclusion, sustainability and economic growth that benefits all places in people. Since that time, since it was published over the last two years, we've been working around what does inclusive growth mean in practice, how do we design policies that actually work, how do we recognise the trade-offs, be able to meet those multiple, but sometimes conflicting objectives as well. Our office has been doing a lot of work over the last two years understanding what does inclusive growth mean in practice for practitioners and policy makers and evidence and measurement and data and so forth. Last year, we published the national performance framework, which went a bit further. It set out our vision for what Scotland's performance as a whole should look like, and it brought to its heart the issue around wellbeing. We believe that inclusive growth and wellbeing are very much aligned in terms of its principles. One looks at the specific attributes of growth, whereas the wellbeing agenda looks a lot more broadly at a much wider range of factors. We began to talk about the economy in terms of wellbeing. Since that time, we had an inclusive growth conference in 2017. At the start of the conference, the First Minister held a breakfast session with international delegates, who were quite interested in understanding what does a wellbeing economy mean for our Governments, how do we act on that, what does that mean for measurement, how do we describe its success and how do we create policy thinking around it. That is how the wellbeing group of Governments came into effect. Since then, we have been talking to a range of countries who are interested in getting beneath the skin of those terminologies and those concepts, and how do we collaborate, how do we get officials together at that very working policy, working level, in terms of understanding what works in other countries and what does not. Do we face similar challenges? Our objectives have always been that we find similar small advance economies, or maybe not other economies who are interested, but who are grappling with similar big issues of the day, economic growth, climate change and social inclusion. How do we get together and understand what that means for how we measure success in the economy? That is where it has come from, essentially. We have been developing this since 2017. We have had a number of meetings, which Michael can go through in a wee bit more detail. Just last week, we had our first policy lab, which is a core part of the wellbeing group of Governments. The policy lab is really just about identifying common areas of interest between Governments and getting officials together to try and bring together policy experts and work through what are the common challenges, and how do we go forward in tackling them, and what are the big issues? How do, for example, New Zealand do wellbeing budgeting? How does Iceland, Scotland and New Zealand think about natural capital and its challenges around sustainable tourism? Those are all topic areas that were suggested by the countries, and when we find common ground, we decide that it would be suitable for a policy lab. Last week, our policy lab concentrated in three areas that all three countries who attended were really keen to explore further. They were around performance frameworks and wellbeing agenda, including learning a wee bit more about New Zealand's wellbeing budgeting, child poverty and also natural capital and sustainable tourism. It was a one-and-a-half day session, so we touched on common issues, explored issues around measurements and policies and challenges, but there is a consensus that this group will move forward and look at some of the issues in a bit more depth. That strikes me listening to you that the narrative around performance is going to be a tricky thing. It seems that a long-term vision and wellbeing is something that is more difficult to quantify and measure, so there may be a long side to your work has to be a shift in narrative about how things are reported, for example, even in the media around politics. My colleagues now, Fink Carson, have questions for you. Our wellbeing is really defined through the national performance framework at that high level. What we are doing across government is really trying to think about how our policies align to the outcomes that are set out in the national performance framework alongside that we are trying to define inclusive growth and really understand how local areas, communities, regions measure inclusive growth and then how we take the learning and measurement and understanding of that and build that up to a much national strategy and thinking around the economy. You mentioned natural capital and sustainable tourism and so on. Will your work involve looking at the national parks and how those two organisations are setable? I can already clearly show that there can be sustainable economic growth coupled with sustainable tourism and natural capital being gained from that. Will that be part of your work to put wellbeing, whatever, into practice? It may well evolve into that. The first policy lab we had touched on high-level issues, so recognising some of the big common challenges around natural capital and sustainable tourism, we talked about the type of visitors that each country is experiencing, how they may be creating externalities and negative externalities, how we combine that with the need to want to grow certain sectors, especially around tourism, but to balance that with the wider wellbeing and inclusive growth agenda. We did not touch on that during the policy labs, but we expect that this might be something that naturally evolves out of those discussions with policy experts. I should say that, while Michael and I are representing, we formed the secretariat for this group, but we are not certainly the policy experts in a lot of the areas that might be picked up in a wee bit more detail. I do not know what you want to add. I think that that is right. It is just really for the policy experts in each respect of government to take the lead on and identify the areas that they want to investigate a bit further. Thank you, convener. Good morning. What is wellbeing budgeting and how can the concept be used to protect and improve Scotland's natural environment? Wellbeing budgeting is really about trying to spend according to the outcomes that you want to achieve. We do not really need to be clear about what we think our wellbeing outcomes look like and that is actually set out in the NPF. What we will learn from New Zealand, I will not go into too much detail because our report is under embargo and it is being published at the end of this month. We look forward to seeing that being published. They have taken a top slice of their budget and tried to apply test and learn and sharing approaches. They have tried to apply a wellbeing budgeting approach to say 10 per cent of their total budget spend. What they have done is identify what wellbeing priorities mean for them. They have looked at the evidence and said, well, those five or six things can possibly define what wellbeing progress means for our society. I guess from that what they have done is taken evidence and looked at what impact does that have not just on wellbeing but on distribution, on economic growth and a whole range of dimensions. The New Zealand approach has gone at bids from partners and agencies who have put together bids for spending on what they think wellbeing budgets and spend looks like. They have assessed them on a number of criteria so that criteria can be set by their ministers beforehand. It consists of things like, is there good evidence of the impact? Do they have good line of sight to their wellbeing outcomes? Is there evidence of good evaluation already put in practice? Do they recognise some of the trade-offs that this wellbeing policy might enact and how clearly do they set that out? I think that, from what we heard last week, they got around 500 bids from across New Zealand and they assessed and scored them based on those criteria that they set out in terms of how well they met their wellbeing priorities. The wellbeing priorities were set out quite clearly in advance and I think that they are going to fund according to which one of those bids best meets outcomes. Okay. I am notwithstanding the fact that you have published your report at the end of the month, are you looking at any practical changes to the budgeting process that could be made to analyse or encourage allocation of budgets to maximise wellbeing through ways of identifying and targeting, for example more preventative spending for spend to save? I should just say that it is New Zealand that are publishing their report at the end of the month. It is New Zealand? It is New Zealand and not us. No, right, forgive me. That is all right, but in terms of your last question about preventative spend and thinking about outcomes-based budgeting, I guess that would be best answered by DGX checker colleagues who are working around spending review and budget decisions. We are doing a bit of analytical work being analysts in the Office of the Chief Economic Advisor thinking about how does predictive analytics help us to understand better the value of preventative spend and their projects that are into very early-stage development. There is a whole list of issues to work through as you do something about predictive analytics just around how you get the data that you need to understand what the risk factors of certain groups of the population or early intervention are. We are using the wellbeing group to try to understand more about how other countries have used techniques like that to understand better preventative spend. Is there a particular interest to this committee to preventative spending in terms of our budget process? Is there any, given the preliminary work that you have done, as I understand it, is there any obvious, as it were, low-hanging fruit where your preventative spend can help the natural environment or not? Nothing that has occurred to you yet or maybe there is something that is obvious? Unfortunately, none that I am aware of in that context at the moment. I was interested in the New Zealand approach to top-slicing budgets and encouraging bids around particular themes. Are there any more mainstream approaches to looking at whole government budgets that are put in place by Governments? Are there structural difficulties in the way that Governments operate? We see ministerial portfolios. Sometimes there are concerns around silo mentality within Governments and executives as well, so how do you get that joined-up holistic approach to wellbeing? I think that that is really effective. You have set out what the challenge is in trying to do outcomes-based budgeting and it is something that we are really keen to learn from and hope that this platform through the wellbeing group of Governments will enable us to do so. I am very conscious that budgets are based on portfolios and departmental spend, but it is about understanding how we take that step back and looking at outcomes and spend according to that. I do not think that I am in a position to explain that very well at the moment. It is not something that I deal with, as it is part my job. I am trying to engage with the OECD on that. They have done quite a lot of work on this wellbeing agenda. I have recently written a report on wellbeing approaches in central Government, so that has got some recommendations on different approaches being applied in different Governments. I think that that is what is interesting about the New Zealand Government approaches that they give additional scoring to budgets that collaborate across portfolios towards that common ambition. I think that that is a crux of the wellbeing agenda. I move on to questions from Claudia Beamish. Thank you, convener. Good morning to you both. I would like to focus a little bit more on the national performance framework and on the underpinning, I hope, by sustainable development goals, the UN goals. It is obviously very important. It is really building on the points that have been made already. I do appreciate its early days for you, but our national performance framework does try to break down silos. I happen to have been on the round table for that for a number of years, and we have seen quite a lot of progress. You highlighted in your initial comments something about child poverty, and that is something very high on all Governments and parties' agendas. Is there anything more you can say about that in relation to the national performance framework and also how that might fit with our brief? I am sorry that I am not the policy expert on child poverty, but from what I have heard from my colleagues, what they are doing in terms of understanding the broad range of actions that need to be taken across portfolios and different areas of Government to tackle child poverty is something that they are looking at in terms of their overall framework and how they start lining that much more broadly across the NPF. From our discussions, it is recognised that the solution to child poverty does not sit in one area, it sits right across Government and beyond, and it is about understanding how we start to align all of those and give a line of sight to those NPF frameworks and outcomes. I think that New Zealander is particularly interested in child poverty as well, because that draws on the intergenerational element of wellbeing, and I think that that also ties to when you start thinking about intergenerational aspects, the sustainability and environmental discussions, but I do not think that that is incorporated in our NPF, but obviously child poverty itself and the indicators and outcomes that we have. I am thinking of the connections with wellbeing and child mental health and access to the fresh air and also air pollution issues, which all affect all of us, but the young and vulnerable and how those connections can be made. Are those issues that you will be able to be looking at in the future, in your policy deliberations, do you think? We certainly hope so. In relation to the sustainable development goals, could either of you comment on how that fits in? Obviously, this work is international and there are international commitments, so it would be useful to hear from either of you both about those goals. The NPF has aligned itself to sustainable development goals as well, and through this work we will be making sure that both are visible and upfront in the discussions around the policy labs. Collaboration on this project with other Governments ties into SDG 17 that promotes fostering collaboration towards the goals. Specifically, this group helps us to deliver on that one SDG, but the whole wellbeing agenda ultimately helps us to deliver all of them. Will there be regular updates on the issues on a website that all us can look at? Yes, absolutely. We are in the process of developing the website at the moment. We have a placeholder website at the moment, but as we start to conduct more meetings and produce papers from and outputs from the sessions that we have, we hope to make them openly available to all. You have already mentioned one paper that sounds very interesting that I did not know about, which is the only CD one. For policy makers and indeed people at all levels of government and citizens, to be able to look at this to see how we can take these very important issues forward would be really valuable. Has your work fed into the development of strategic environmental policy in Scotland? In particular, the environment strategy, which is under development, has the potential for an agricultural bill. I am interested to know which departments are over your work and are actively collaborating with you, or are there particular departments that have a particular interest at this point? We reach out to all departments across Scottish Government as part of our overall oversight on the economic strategy element and looking beyond and thinking about how this agenda incorporates contributions from everywhere. In terms of the environmental side of it and colleagues who work on that side of the strategy, we are keen to engage with them as we develop not just our metrics on inclusive growth but trying to understand how we build the whole environmental indicators as part of our whole outcomes framework. We are engaging quite closely with them and want to ensure that we keep joined up right across Government. But not specifically on the environment strategy at this point? Not at this point. We have had some early conversations with them. What about the role of the Scottish National Investment Bank? Clearly, a bank has got a very joined up mission-based approach on climate and a number of other missions that relate to inclusive growth. Is that something that you have been again invited in to provide input into? Yes. We are again close a link to some of their analysts that sit within the office of the chief economic adviser, so we have that ability to mean close links as they develop their agenda. Is there anything specifically coming out of that engagement at the moment? Just in terms of their missions and the read across to how they prioritise and choose to fund, it is about understanding what impact that has on overall outcomes. Angus MacDonald, where does growth feature in the concept of a wellbeing economy that also maintains and enhances natural capital? Basically, is there such a thing as green growth? I think that this is the ultimate debate, and it is really about understanding and being honest about the trade-offs that we are willing to accept as a country as we pursue all of our objectives around economic growth, environmental sustainability and social inclusion. As far as we can, we need to be mindful about pursuing policies that are able to have a positive impact on all three, but where ultimately they do not, we need to be really honest and clear about the trade-offs and what else other actions we can do to mitigate some of those negative impacts that might arise. That is something that we are very mindful of as we start to think about developing our own analytical underpinning to this kind of work. How do we start accounting and really taking those trade-offs and synergies into account in terms of our measurement framework and our impact assessments? The central purpose of Government at present is sustainable economic growth. Is that a term or concept that is applied internationally? Does that sit comfortably with inclusive growth or what other countries are pursuing? Does it need to evolve? We describe inclusive growth as inclusive sustainable economic growth in the sense that inclusive growth has to be something that is able to deliver in the long term and has that long-term transformational effect. In terms of inclusive growth agenda, we are really mindful that we have to grow again within our existing parameters around financial and environmental sustainability. Internationally, it tends to get used in the same way, but there is no real tight definition of sustainability when it comes to defining economic growth. That has always been quite lucid in its concept. Is there anything to learn from the other devolved countries such as Wales, Northern Ireland or even Ireland itself, a country of comparable size to New Zealand and ourselves? We have engaged with officials in the Government of Wales recently and hope to engage with them in future meetings. Another report worth mentioning is from the Carnegie Trust UK, which has written a report on wellbeing and devolved Governments, which highlights some of the agendas and programmes being in place in Northern Ireland, Wales and Scotland, which might be worth circulating. There is definitely a lot to learn closer to them, as well as from further afield like New Zealand. Could you ask a little further on the definitions that we work with in terms of the prosperity of all of our country, of all of Scotland? Are there examples from elsewhere that you can either highlight to us now or perhaps let us know about as a committee, on whether there is a commitment by countries to sustainable development specifically rather than sustainable inclusive growth? I do not know, to be honest. My colleagues, I will have time for a last question. You believe your code. I was going to push it a little bit further. In terms of what we can learn from other devolved administrations, I have been pretty struck by the work of the Future Generations Commissioner, not just to work on young people and language and environmental sustainability but a whole range of other areas. If you were to look at what we do in Scotland with the NPF and our current frameworks and what they do in Wales with the Future Generations Commissioner, where is the gap? Is there added value that the FGC is bringing to Wales that we do not have yet in Scotland? What is that gap that exists? That exists? That is something that we want to explore and we are really mindful that the Future Generations Commissioner will be quite keen to learn from it in terms of how they are doing it and what the gaps are in Scotland in terms of our policy-sufficiency gaps. You are just going to touch on the intergenerational aspect that I mentioned before that is in the New Zealand's loving standards framework. I think that is what it comes out from the Future Generations Commissioner's work. What about in terms of advice for public bodies? Is that a function that is currently undertaken on environment policy elsewhere in Scotland? Is that a specific function of the FGC replicated or not? I do not see public bodies being held to account exactly the same way where you have SNH, you have CEPA, but there is not that commission to really look at whether policy is being generated that will really deliver future thinking. For example, the M4 expansion in Wales FGC has taken quite a strong role in scrutinising that. Is there an equivalent body in Scotland? We do not have an equivalent body in Scotland as far as I am aware of, but it is certainly something that is worth looking into. Thank you very much for your time this morning. We look forward to seeing what comes out of your work and I am sure that we will have you back again to report on what you have been up to. We will suspend the meeting briefly until I end the change in panel. Welcome back. We now move on to our final evidence session of the morning on infrastructure and carbon. I am delighted to welcome Iain Russell, the chair for infrastructure commission for Scotland. Good morning to you, Mr Russell. I am going to start off with a blanket question to get us started on this topic. We understand that the commission members were appointed only just in February. We appreciate that you come in here today so soon to talk about a very early stages of your work. You plan to report on infrastructure ambitions and priorities by the end of 2019. Could you outline the immediate plans and priorities in your work? Good morning, commissioner, and thank you all for inviting me to come and talk with you this morning. We were appointed in February by the cabinet secretary, Mr Matheson, and given two tasks, one to come up with a 30-year vision of Scotland's infrastructure by the end of December, and, secondly, by June of next year, to give him advice on how to deliver that. He gave us a very clear instruction that this should not involve sitting in a room thinking about what the answer is, but to go and engage as widely as possible across Scotland and more internationally to gather evidence on both the vision and the delivery. So, our priority has been to set out as broad as possible an invitation to people and organisations to contribute evidence. We set out that invitation at the end of February. At the end of last week, we had about 120 submissions from across Scotland and more widely, so the commission's priority at the moment is going through that evidence and drawing out the key aspects of it to allow us to create more focus in the coming months on the commission's work. Evidence gathering is the phase that we are now in. Thank you very much for that, John Scott. Can I ask you about the expertise and what expertise does the commission have on its board or through other channels on environmental issues? For example, assessing low-carbon infrastructure by diversity impacts, marine planning, etc. The commission is broadly spread, both public and private sector. We have a range of specific skills, including environmental and low-carbon, on the commission, but I think also and importantly in answer to the first question that is really about gathering evidence from other people. We wrote to five and a half thousand organisations and individuals asking for evidence. We are going to hold five or six regional forums across Scotland, which will give people with expertise, including environmental and low-carbon expertise an opportunity to come and talk to us. We are going to use social media to reach a younger group and get their views on Scotland's infrastructure. In the autumn, this perhaps goes particularly, Mr Scott, to your question. We expect to hold a number of expert sessions where we really, as a commission, drill down into particular topics. I would expect the areas that you have mentioned to be a major part of that. With a particular emphasis on low-carbon infrastructure? I think that low-carbon, but more generally sustainability. The overall objective that the cabinet secretary has given us for the advice that he has asked for on the 30-year vision is sustainable, inclusive economic growth. I was sitting at the back listening to the previous end of the discussion about exactly that subject. So, essentially, Blue Sky is thinking about a fascinating opportunity for you and others? I think that there is a gap in our armory at the moment. The Scottish Government's definition of infrastructure, as you are probably aware, covers 13 or 14 different areas. Everything from transport, energy, water, all the way through to health education, housing. It is a pretty broad canvas. Each of those individual areas have their own plans. What is perhaps not evident quite so much at the moment are the linkages between those plans. I think that that is the focus for the commission's work during this year. We are looking at natural capital as well. I am thinking of an ecological network. Central Scotland Green network sits within the national planning framework as a major piece of infrastructure that is reflected within the planning system. What are the opportunities to look at the natural environment and natural capital, particularly in relation to what we need to do to tackle the biodiversity challenge and the climate challenge, as major national infrastructure projects? For example, a national ecological network is something that has been discussed in this committee and in the chamber on numerous occasions as a major piece of our carbon sequestration biodiversity enhancing infrastructure. Is that something that is within your remit and is within Mr Matheson's interest, or are we talking primarily about bridges and stuff? I think that it is broader than bridges and stuff to play that back to you. But it does involve long-term investment. I think that that is the theme here. The starting point, I believe, for the cabinet secretary's request for the commission is advice on how the public sector and the private sector, both nationally and locally, should focus its investment over the next 30 years in order to better achieve sustainable, inclusive economic growth. I am sure that that will embrace the areas that you have reflected on. I made a note of that as you were speaking specifically. Is it mentioned in the remit that we have been given word for word? No, but I do think that it is implied in it, and it is certainly something that the commission would want to take evidence on. If you were able to point people in our direction on that, we would be very happy to engage with them. In terms of the engagement that you are doing, you have written out to 5,500 organisations. Will there be a specific expert thematic grouping around natural capital and environment? Will there be a group looking at Scotland's rainforests, the peat bogs and their carbon sequestration potential? Is that a national asset, a national part of our infrastructure? The commission has three people working for it. I am the fourth. We are a small but perfectly formed group, so we do not have the volume of people to devote to specific areas. What we are trying to focus on is specific groups of organisations that can provide us with evidence to cover a wide range of topics, including the one that you are asking us about. If you are able to direct us towards or point people in our direction for your interest or any of the other members of the committee's interests, we would be keen to engage. We do not have all the expertise and we certainly do not have the answers, but we are keen to gather evidence that will help us to advise the cabinet secretary. You are going to be going out to different regions, because there are a lot of different solutions based on geography. Is that a key part of your work to be out in all areas as much as possible and getting local feedback? It absolutely is. That was encouraged by the cabinet secretary and is something that the commission has set its sights on doing in any event. I think that we will probably end up with six regional forums. I myself have had an invitation to go to the Outer Hebrides to hear what they are doing. I have accepted that invitation with great pleasure and anticipate doing the same for Orkney and Shetland, so it is islands as well as mainland Scotland. Good morning to you, Mr Russell. Building on Mark Ruskell's question, I appreciate that the cabinet secretary has given a remit in relation to infrastructure definitions, if one would call them that. Is there any room for manoeuvre in relation to, for instance, adding on something such as green infrastructure in view of how important that is to the wellbeing and future of Scotland? I think that there is every opportunity to add to the remit realistically to perform a useful function in what is now seven or eight months. We have got to be pretty focused in what we look at and what we advise on, but I am clear, and I think that my interpretation of the cabinet secretary's desire is clear, that low-carbon environment-sustainable green assets are absolutely within the remit of the commission. What he defined for us was a fairly high-level remit, building on the Scottish Government's existing definition of infrastructure, and I think that he has left us to interpret at the next level of detail what we go into. The sort of discussion that we are having now is immensely helpful to land. I was particularly concerned in view of, you will be aware, as everybody on the committee is aware of the UN report on nature, which came out yesterday, the high-level report. In view of that, I would very much hope, not least in view of that, that green infrastructure could be one of the high-level definitions, but perhaps that is for the committee to consider as well. We move on to questions from Stuart Stevenson. I want to focus on a bit more on low-carbon and perhaps low emissions, but before doing so, I wonder if you could perhaps tell me how this relates to the UK Government's critical national infrastructure. There are 13 headings in that, two of which appear to touch on the interests of this committee—probably energy, food and water, perhaps. How does that relate to it? Now, it is worth saying that my take on the critical national infrastructure—and I used to have to work within that framework in my professional life—is about maintaining the status quo ante. Is it fair to say that you are about creating the new rather than protecting the old, but how does it relate to that existing national infrastructure, legislation and practice? I think that we are about stepping out 30 years ahead. Looking back to today, the cabinet secretary has asked us to advise on how plans for the next five years provide a platform for that 30-year vision. We are being asked to join up the future to the present infrastructure terms. Of the categories that you have mentioned, energy and water are definitely within our remit. Food is not, I think, but I may be missing a subtlety there. If I am on behalf of the commission, we would certainly like to take that on board. Well, my immediate reaction is that food might be something that you would consider. It was certainly, I suspect, to be of interest to us and this committee more generally, if it is not within your remit as well. Anyway, your 30-year horizon takes you to 2049, and now, with the Government adopting what the UK climate change committee has set as climate change targets—in other words, zero greenhouse gas emissions by 2045, that is within your period. Just to throw you the curveball that is a few days old, has the adoption of that target changed your thinking on how you will deal with not simply low carbon but low emissions and, indeed, perhaps in carbon, in particular, negative carbon emissions so that we can offset those areas of our life where such as agriculture will be virtually impossible to get to zero? We need to make sure that other parts of the equation work. I do not think that, in answer to your question, it has changed our thinking. I think that it may shape the areas in which we gather further evidence over the next two to three months. I just want to repeat what I said earlier that what we are being asked to do is not to think ourselves of what the answer is but to gather evidence from as broader church as we can as to what other people think the answer is. As reports and advice both within the UK and internationally come out during this year will certainly be building that into our thinking in the way in which we gather evidence and then transform that into advice to the Cabinet Secretary. Since we started in February, the last couple of months have been very much about making people aware of the existence of the Commission and our remit and asking for initial evidence. As I mentioned, that call for initial evidence closed on Friday. We have been very pleased with the diversity of the response that we have had. We are now beginning to go through that evidence. Your question is very pertinent and I am sure there will be further reports and advice from all Governments and all parts of Governments that will influence our thinking and our evidence gathering particularly over the summer. We need to start drawing conclusions by September or October time if we are going to report to the Cabinet Secretary in December but certainly over the summer there is an opportunity for us to cast the net more widely. Finally, you said that you were looking at a five-year horizon as well as the 30-year horizon. Will you do the 30-year horizon first so that you can then infer what needs to be done in five years rather than looking backwards and projecting forwards to five years? I say that in context because my last professional responsibility 20 years ago was precisely doing this only when I was working to a 25-year horizon. We found it immensely useful to try and posit 25 years out to help us to understand what we need to do in the first five years. I can give you categorical assurance. It may be the only answer today that I give you categorical assurance on that we are starting with 30 years and working back. I would like to look at the position of the Commission on the Potential for Infrastructure. What do you see as the potential for infrastructure to lock in behavioural change and also look at greenhouse gas emission reduction? Part of our remit is to think about the delivery of public services and the interaction of public services with individuals both in the public and the private sector. The thinking of the Commission is not about an item of infrastructure per se, but what that leads to, whether that is service delivery or behaviour or other impacts. The behavioural changes that are being considered are those within our remit that would lead to the objectives that we have been given such as sustainable, inclusive, economic growth, low carbon, a more diverse society, etc. We have been given almost like outcomes, if you like, and asked to think about what the infrastructure is needed to deliver the behaviour that would produce those outcomes. On a practical basis, at the moment, we are waiting with Bairie Bebbeth to hear what the South of Scotland transport strategic review will come out with. My constituency has one of the busiest trunk roads in the UK and the third busiest port with a high number of freight lorries or HGVs. There are campaigns for reopening railway lines and whatever. When that review comes forward, is it likely to be referred to you or do you take that review and look at the evidence and make recommendations on the back of that report that the Government will publish any time soon? Our remit involves receiving reports such as that consultation document, such as that, but really joining them up to other areas of infrastructure. If you think of a dozen or so pillars of infrastructure of which transport may well be one, I do not think that the commission has the time or the expertise to second-guess one of the long-term plans for a particular pillar of infrastructure. However, what we are about is saying, if that is the plan for transport, how does that connect to the plan for energy, housing or healthcare? What are the interconnections and the interactions between them to deliver the behaviours and outcomes that you were referring to in the earlier question? My final question is on the back of Stuart Stevenson's question. Given the recent update of the climate change recommendations, what is your view on the scale of the challenge and the need for real-time action so that the urgency to put new policies in place? How will that affect your work? I think that it is back to the are we starting with the 30 years or the five years? We are starting with the 30 years, so if we start that far out and look back, that should inform the priorities that we have over the next five years, five to 10 years, et cetera. In infrastructure terms, for the next five years, a lot of the projects that will be delivered over the next five years have already started. In planning, if not actually, on the ground. In reality, working back from a 30-year view, we are probably going to have more influence on the projects that start in a five to 10-year time period than a one to five-year time period. However, we have been asked to comment on one to five. Mark Ruskell, do you have a full-out question for me? How would you see your work dovetailing with the strategic transport projects review then? What would you see as your role in that process and at what point? I'm sorry, I didn't mean to interrupt you. I think that our role is to take that consultation document and draw inferences from it for infrastructure more widely. I don't think that the cabinet secretary sees the commission's role as being one of commenting on or interrogating or trying to second-guess a review of a particular pillar of infrastructure, in this case, transport. I think what we're about is taking that, having a review of it, and thinking about the interactions between it and other long-term plans for electricity or water or housing or healthcare. We have already had discussions with Transport Scotland and will continue to do that, but more in an engaged way where we understand what their plan is so that we can interpret its consequences elsewhere on infrastructure. Does that make sense? It does. It's a picture that we're trying to understand a bit more clearly, but how does that overlap with the roles and responsibilities of councils, for example? I think that the advice that we're giving to the cabinet secretary will have to be looked at and interpreted by public and private sector Scotland as a whole. I'm sure that the Scottish Government will want to, having taken our advice, think about how it wants to go about achieving those areas of our advice that it takes on board. The commission is very aware that a lot of infrastructure in Scotland is maintained and delivered by organisations that are not the Scottish Government. In a sense, this is providing an umbrella report, but there's a lot of delivery and investment organisations that are not actually the Scottish Government itself and local councils, local organisations would be part of that. Can I go to Angus first and come back to you? Yes, of course. Okay, thanks. Camila, with regard further to the infrastructure plan and advice, which has already been touched on by colleagues, can I specifically ask how you plan to make your advice on any long-term infrastructure plan coherent with the statutory climate targets, which, as we know, the 2045 emission reduction target for Scotland and 2050 for the UK? How do you intend to ensure that it is coherent? Going back to our remit and the provision of advice for this longer-term vision, that's not going to involve us in looking at or recommending specific projects. It's going to be more themes and interconnections between different pillars of infrastructure, consequences. If you build this, you're going to have to think about that. So the statutory constraints or objectives across all infrastructure, and not just the one that you've mentioned, but there are other statutory points that we need to take into account, will have to be reflected in our advice, but they'll appear not as project-level advice, they'll appear as more strategic-level advice, because I think that's the nature of the report that we're being asked to produce. We have neither the time nor the expertise to go into individual project levels. Mark, back to you. So how should we understand and score the climate impact of competing infrastructure projects? Well, that's a good question. Perhaps it's one for your committee to have a better answer for than me at this point, and I'd welcome coming back and hearing your thoughts on it. But I think from our point of view, we've been given a broad goal, sustainable, low-carbon, inclusive economic growth. There's no figures in that. There was an earlier question about negative carbon emissions, and that begins to get you into that, that subject, I think. From our point of view, we're not going to recommend in our advice to the Cabinet Secretary specific projects, so we're not going to get into a trade-off at project level. What we may get into is a trade-off at types of infrastructure level, and I think that's one of the interesting themes that we'll need to draw out. I mean, your committee is asking extremely good questions. We have just embarked on evidence gathering, so this is very helpful to me in shaping the way we go about drawing evidence and how we think about the evidence that we get, but we're not going to have all the answers until the end of the year when we deliver our report. So would it be your intention then to provide your advice to different committees within the Parliament based on particular themes? I'm not sure how you would at this stage, and it's very early days, but how you would wish to interact with committees or obviously looking at budget decisions and the NPF? I think that our remit is to report to the Cabinet Secretary, and when we've done that, we'd be very happy to come and discuss our findings with yourselves, and I have already said to other committees we'd be happy to meet with them either individually or in a committee session formally or informally, but I think that in fairness our first report goes to the Cabinet Secretary. I suppose this is a daff ladi question to get right down to practicalities, and I'll give you an example again. It comes from my constituency, but it would be equally relative to any other constituency situation, so we have a port, and if the Government decided that the sustainability of the long-term future of that port was really important, but there were two ways to do that, and that was either to upgrade the roads leading to that port, or to reinstate a railway line or build a new railway line, and one was substantially more expensive than the other. Would it be your job to advise the Government that, potentially, when it comes to carbon or long-term sustainability, the railway line might be the best solution, even though it costs initially four or five times more? Your argument would be looking at the greenhouse gas potential reductions from a railway line, electrified rail line, or whatever. Is that what you will do in practice? We have been in our remit. We have not been given any fiscal constraints, but we have been asked to take account of what is inevitably a constrained budget over a 30-year period. We are not being asked to make financial trade-offs as such, but we are being asked to take account of the financial position. I expect that you are right. I think that there would be, within our report, alternatives. It seems to me highly unlikely, even at this early stage, that we will come up with one right answer. I think that there is more likely to be some scenarios from which to select options. Probably not at a project level as detailed as the example that you have given, but more thematically, I think that there may well be some scenarios that we offer to the Cabinet Secretary as different ways of achieving the end objectives that he is seeking to take advice on. Claudia Beamish Thank you, convener. Really following on from that, and then I have another question for you, Mr Russell. Could I ask whether there is a process that you are able to identify whereby you can look at the lock-in of the concerns about lock-in for new high-carbon projects? I am not going to recommend one, but I am wondering whether you are using one or whether that is in your thoughts. Michael Russell It is not something that we have turned our thoughts to yet, but I am sure that we will, over the summer, as we start to think about the evidence that we are gathering. Claudia Beamish Thank you. While I appreciate the point that you make that you are reporting to the Cabinet Secretary, do you have measures or will you be developing measures whereby you can assess the success of the low-carbon remit that you obviously have as part of your remit? Michael Russell I think in our report, we almost have to find some way of recommending not only the methodology for delivering the vision which the Cabinet Secretary has asked us to report on from January to June of next year. That is the second part of our brief. Beyond that, how the vision and the delivery is refreshed periodically and the outcomes measured. One of the things that the commission will hope to have achieved by the end of its life is a degree of cross-party support for a long-term vision. We can all discuss individual projects and aspects of it, but we would like to try to help the Scottish Government to get broad support for a long-term vision and the refreshing of it and the measuring of the progress towards it, including in the area that you have mentioned. I do not think that we will get any more questions. Oh, I saw you, John. You have wanted to ask a question. Thank you. If I have understood you correctly, Mr Russell, when you say developing themes, would that be at the level of, for example, from your own background of energy? Would that be different types of energy provision renewables, or tidal, or wave, or hydrogen, or are you being invited to look into that future orb to see which one you suggest to the Government that they might back at that level of approach? I think that we are not being invited to be that specific. It may well be in the evidence that we gather that we see pros and cons that lead us to advice that would suggest to the Cabinet Secretary that those two or three paths might be better than those two or three paths. So the remit has not been to be that specific, but in the evidence that we see, that might give us a basis, a sound basis, for advising the Cabinet Secretary generally, but maybe not quite as specifically in the areas that you have referred to. And will your evidence gathering presumably encompass universities as well as individual businesses? It will, and in the 120 or so pieces of evidence that we have already received universities are represented within that as our colleges. Thank you very much. I think that I will probably speak for everyone who would like to accept your invitation to come back and speak to us again after you have reported to the Cabinet Secretary. I think that your work is going to be very interesting and will inform quite a lot of our scrutiny as well. Thank you very much for your time this morning. Thank you very much. Thank you all. I am going to suspend this session. No, I am not. That concludes the committee's business and public today. At its next meeting on 14 May, the committee will be taking evidence ahead of consideration of amendments to the climate change bill at stage 2. The committee will hear from the Committee on Climate Change in relation to its updated advice to the Scottish Government. The committee will also be considering a response to recent correspondence from the Finance and Constitution Committee on the EU frameworks and will consider its annual report for 2018 and 2019. As agreed previously, we will now move into private session and ask the public gallery to be cleared as the public part of this meeting is now closed.