 As you can imagine today, our first item is to talk about Scotland's public finances in 2324, the impact of the cost of living in public services reform. So, welcome to the 24th meeting in 2022. I would like to welcome to the meeting Alison Douglas, chief executive of Alcohol Focus Scotland, Polly Tolly, director of impacts at Zerfys Scotland, who is attending instead of Rory Mer's CBE, you could not be here today. Catherine Murphy, executive director at Engender. Claire Reid, director of policy and public affairs at the Scottish Council for Development and Industry. Aaron Hill, director of policy and membership, Scottish Federation of Housing Associations. David Longsdale, director of Scottish Retail Consortium. And Stephen Smiley, deputy convener of Unison Scotland. I thank you, everyone, for your detailed written submissions. We have, of course, moved on a wee bit from the content of some of those submissions, given the fact that I think we're two chances of the ex-checkers since then, and obviously we've had this statement last week in the appointment of a new Government. We also, incidentally, invited the Scottish Chamber of Commerce to take part in today's discussion but have not received the response to our invitation. Exploring the written views of witnesses at committee meetings is an important part of our inquiry process, and this is the second time this session of committees have invited the chambers of commerce with no success. I consider it a curt case to this committee that on this occasion they haven't even responded, and I would encourage the chamber of commerce to contact us to discuss this, and in the meantime they're committing me well was to reflect on this when it comes to future inquiries. So we are very grateful for your attendance today and indeed your participation in person. We have around 90 minutes for this session, which is intended to generate a discussion, or rather be a straightforward question and answer session. If at any time you would like to raise a point, please indicate to the clerk, and I'll bring you in. Now I don't intend to chair the meeting where I did last week. Obviously, I mean I couldn't anyway, it's not a straightforward Q&A, as I mentioned already, but there have been so many changes that we may dot around a wee bit in terms of some of the issues, but we're trying to stick to some of the major issues facing us. Who would I want to bring in first? I think I want to bring Claire Reid in first, because taxation is obviously in the forefront of everyone's minds at the moment following the statement last week. You've said in your submission that, in my quote, Scotland competes with other parts of the UK and other countries to attract investment and talent, and tax rates are one of the factors. Scotland's ability to retain, grow and attract businesses and retain and attract key workers will be absolutely pivotal in generating the rates of growth that will make its public finances sustainable and fund improvements in public services and spending. So what is your view on where we should go from here with regard to taxation in Scotland? Thank you to the committee for inviting us along this morning. I suppose that just sort of take a quick step back from that question just to kind of reiterate, I suppose, where we are in terms of the priorities for the spending review. I think we're very keen that at this point, particularly when the indication is that we're either going into recession or are in recession, is that spending is focused on areas that support economic growth, whether that's around investment in infrastructure, attracting investment or supporting businesses to grow and to create new jobs? In terms of the situation that we're in at the moment, we released a statement on Friday to indicate that, whilst we welcome the support for businesses and households on energy, we do have some concerns about the UK Government's decision to cut taxes in the way that it has and also to increase borrowing to levels that certainly increase the risk to the economy. In terms of where we go from here in Scotland, we've probably had a range of views from our members around whether the Scottish Government should follow suit or not. I think that one of the concerns is about the potential increase in complication or complexity in the tax system in Scotland versus the rest of the UK, but certainly some of the feedback that we've had from members around attracting talent and growing some of the key sectors that you set out in the national strategy for economic transformation that are in the export plan and that are likely to be in the innovation strategy. Those are sectors that need to be able to attract talent. I think some of the concern is around if we start to diverge significantly from the rest of the UK, that could potentially be a deterrent for some of those sectors trying to attract new talent to Scotland. Okay, thank you. No-one has said they want to come in. Stephen, just in a contrast to that, then in the Unison's paper you said, and I quote, an IPPR Scotland report last year indicated that reducing the threshold for hiring contacts to £40,000 to £43,000 would raise £690 million. Unison, in fact, has made a number of suggestions in terms of how tax should be raised, so what's your view on how we move forward from the point that we are at following Friday's statement? Thanks very much for the invite today. You're opening remarks reflected on the changes that have taken place and the way in which the Government announced last week and the reaction to the markets and all the rest of it. I think that most of us are even more worried about the economic situation now than we perhaps even were last week. Our view is that the priority for economic growth is well understood and the creation of jobs would obviously some marriage union is in favour of. If, at the same time, however, we are forced into a position of cuts in public sector spending, which result in loss of jobs in whether it's local government or health or higher further education or any other parts of the public sector, we then have a reverse motion in terms of economic activity. Workers who work in the public sector spend their money locally, reducing their ability to spend either through reduction in their wages, which over the past 12 years I would remind people of the austerity that public sector workers have had to experience and the value of their wages have declined by something like 20 per cent, and that's going to continue in the current situation with pay rises below the rate of inflation. All of that is a drag on the economy. That purchasing power is no longer in the community, and local shops don't get spending and footfall that they need to maintain. We need to be careful not to talk about economic growth purely in terms of incoming companies. We don't accept the argument that the taxes should be cut or that the higher rate of tax remaining at its current level in Scotland will have any detrimental impact on the economy. The numbers of people that that involves are so small that we don't think that the talent that we have in Scotland would be able to cope with that. The other part of that is that it's not just about what people pay in taxes, it's what they get in return for their services. As a Scottish union official, regularly going down to London to speak to colleagues in other parts of the country, people will always come back and say, thank goodness we don't live in that country, because the state of services that we have up here continue to be better. They're not as good as they could be, but they're continuing to be better. So there's a balance between levels of taxation and levels of service provision, and we would argue that the opportunities that exist should be taken in terms of finding ways to raise tax from other areas. Our paper gives a whole range of different examples of where money could be raised to assist with the problems that we have at the moment. I would hope that the committee and the Government will start looking at a whole range of those areas where we could actually increase the public spending by raising that income. You said there, Stephen, that you didn't think that there was only any likely to be any behavioural change or any impact. About 16 per cent of Scotland's income tax comes from 0.6 per cent of high earners. Is Unison done any work to look at behavioural change and where the tipping point is? For example, I remember asking this in the Basque country some years ago, and their view was that, if there was a two or three per cent differential, there would be no behavioural change, but after that, that's when behaviour did start to change and it became more economically valuable to those who would consider such change, i.e. people who are highly high incomes and are mobile. I would ask that, and anyone else who is going to comment in this area what research you have in terms of behavioural change. It's not just opinions, of course, but it's evidence that matters. I have to confess that I don't think that Unison has done any specific research on that, which we quote on our own. We refer to the IPPR research, which makes comments about the banding, so we don't have any of individual research. What we do have evidence of is skill shortages and shortages in labour at the lower ends of the jobs market in social care. We continue to have a crisis as people are well known at the moment. There's a whole range of areas where people are key industries. The key workers who we all clapped during the Covid pandemic continue to be on very low wages and we continue to struggle to recruit people at that level. That's where the priority has to be. I think that there's sufficient talent. For example, in the local authority, the cleaner on a full-time cleaner would be on some £18,000 a year. The changes in tax will benefit them by a couple of hundred pounds at best, whereas the chief executive, who is on £180,000 a year, will get significantly more benefit from the tax. That chief executive is not about to start looking elsewhere for the work. They are part of an integrated service. I accept what you are saying, convener, that I can't present any evidence of that, but our strong belief is that that is not the priority area at this point in time. I found unison's submission really helpful in that the committee always has a whole range of organisations to come to wanting more spending in the areas that they prioritise, but very few folk are willing to come with proposals on how to raise additional money to pay for that, or what they would cut from elsewhere to do it. That being said, as much as I think the proposals that unison has brought forward in terms of revenue raising are tangible and mostly deliverable, even if they were collectively maximised, that wouldn't raise enough money to match the level of spending commitments that unison is looking for. I'm interested in what the union's view on prioritisation is. Is it free school meals? Is it increasing NHS funding? Is it keeping public sector pay-up in line with inflation? How should Parliament be looking to prioritise in a context where, at least in the short term of the next two to three years, we certainly can't do everything on your spending list all at once? The question that you've asked is excellent. I was going to ask something almost exactly the same. I'm moving on, but I'm trying to keep the thing to tax so that we don't end up jumping about completely. I want to try. I do want Stephen to answer that question at the appropriate point, but I want to try to keep to the issue of tax stuff. We can move on to that, but it's an excellent question. As I said, it was something that I was going to move on to myself. Do you want to ask anything on the kind of tax issue? It's the same question at its core about prioritisation. Some of the tax proposals in unison's submission would require primary legislation. There are new tax powers. I'm interested, again, of those given that the legislative timetable is pretty tight over the next couple of years. What are the brand-new proposals? Is it the local inheritance tax? Is it replacement of council tax? Which of those would you prioritise for parliamentary and government time? That's a difficult one. Thank you for the first last answer. Please write to me and advance some of those questions. I couldn't say specifically. Those are ideas that we've been discussing in unison for some time and have been subject to various discussions at the STUC level, for example, and previous submissions to various different committees here. I couldn't say in a category which one is the major priorities. That would be subject to, I think, to be fair, deliberations here among yourselves. I think that the point that we're making is that too much is said about a fixed budget. We've all got a fixed budget, or we're not entirely relying on what we get from Westminster. That's a critical issue, and we would certainly support the idea that the Westminster government should change its tacky so that there's more money in the public sector. However, in that, the Scottish Parliament has the powers that they can introduce additional means of raising funding, and we should be less shy about staying away from that because of fears of some people from certain quarters who would always come down and say, the tax dodgers aligns, for example. We'll always criticise anyone who suggests raising taxes. We should be looking at how we introduce a far more progressive taxation that will bring in more money. Those are just suggestions that I couldn't say which ones you should do first, but we should start looking at them seriously as a Parliament, as a country, as to how we make taxation more progressive. Thanks. I'll have to come back in later, community. Yes, sure. John, to be followed by Daniel. Thanks, convener. On the same theme, and as I've got David Lansdale sitting next to me, I was going to ask the Scottish Retail Consortium how they've— Sorry, Daniel. It's coming in after Daniel as well. All right. That's good, Ty. You can come in for it. So, because if I understood from their submission that they'd like lower business rates, they'd like probably lower income tax so that consumers have more money to spend in the shops, would you also take a view, like Unison, that we could raise some other taxes to compensate, or how do you see this balance between raising tax and losing money? Would you like me to come back in now? I understand, but you still eat your bit, don't worry, in a couple of minutes. So, thank you for the invitation and just in terms of reeling the film back a little touch, just to give the context of what our budget recommendations are about. Obviously, retail has been in the eye of the storm over the last two and a half years, somewhat perverse that we've had a very tough pandemic and then we're straight into this cost emergency, as the First Minister has described it. Obviously, retailers and their customers are facing into that, and that's the prism through which we look at the Scottish budget and our recommendations paper. Yes, we have put forward a number of tax proposals in our budget recommendations paper. In terms of business rates, just to pick up on what you were saying, Mr Mason, we've asked for a potential hike in the business rate to be ruled out, so we've not technically asked for a cut, but one can look at that as one does. In terms of income tax, in our budget submission, we talked about ruling out any increases for those on modest earnings. We also go on to say if there were tax cuts at the UK level, then we'd like to see those people on lower and modest earnings benefit from that, similarly. That was in our budget paper and obviously I can come on to that in a moment. In terms of raising new taxes, we tend to be somewhat not hugely in favour of additional taxes. We think that, obviously, retailers and other businesses are paying quite enough, as it is in several taxes. For example, on the business rate, it's at a 23-year high at the moment. If I understand the potential for next spring, we could be seeing a 10 per cent uplift. For retailers in Scotland alone, that would be an extra £60 million plus next year. We've obviously outlined a number of suggestions about how one might look at saving taxpayers' money or public expenditure. There's an entire chapter on that. I'm happy to go further and explain on that. In terms of research and evidence, there's probably a tremendous amount behind that, but there are a few suggestions that we've pointed to as well. I'm happy to come back on some of the other points. We will be covering other areas as we progress. If I can have another point at Claire Reid, if I may, from SCDI. If I understand you correctly, you didn't like the idea of fiscal drag so that, effectively, people pay more tax just because of inflation. Your argument was that productivity would be a better way of doing things. My question for you is more on timing. Even if we improve productivity, that is. We're probably talking three, four, five, ten years, whereas fiscal drag can help the finances now, can't we? Yes, but we think that there are things that could be done to support productivity now. I suppose that we are probably more in favour of thinking about how investment can be prioritised to support economic growth and to support the strategies and plans that the Scottish Government is looking to bring forward, not least the national strategy for economic transformation. Part of our focus is about saying that yes, tax is a lever that can be used to show up public finances, but we need to think about the consequences of that. The point on fiscal drag is that it picks up the point that was made earlier. We don't have any hard evidence either other than what members are telling us about the likelihood of people in those higher tax bans to either choose not to come to Scotland or choose to take their labour elsewhere. One thing that I would note just on that is that, from the data, the suggestion is that the number of people who will be in that higher tax bracket will go from 7 to 17 per cent by 2027 to 28. That is quite a large proportion of the economy. I think that we just have to think about the consequences of that. We would prefer to think about ways that we can support businesses now. We have asked our members and they have come up with a variety of things that would help them at the moment. David has talked about one of them, which is not to increase non-domestic rates in the spring. They have asked us to think about ways that the Government can reduce burden on businesses, not to introduce any other new costs to businesses in the short term, but to continue to support flexible and affordable childcare and to support them to invest in the things that they are having to do, such as reduce their energy costs and upscale their workers. I would say that there probably are quite a lot of things that can be done in the short term to improve productivity, and certainly are the case that we have made. On the broader point about higher tax rates in Scotland versus elsewhere, our perception is that people can stand a slight differential in Scotland from elsewhere, but we just need to be mindful of the gap that could widen up in the current context. Our focus is more on making sure that we have the right investment in the right places for the long-term sustainable growth of Scotland's economy. We will come back to some of those things as well. I have a brief comment about something that Stephen said earlier. It is quite important to note that a lot of Scotland's higher earners are in the public sector. We have quite a different profile of higher earners, so some of those tax points do not have the same impact in Scotland, which is quite important to understand. Before I ask my question, I ought to remind the committee of my register of interests. I am a director and sole shareholder in a company that has retail interests, which is probably understating the level of bias that I have towards the retail sector, quite frankly. However, let me ask David some key questions. What is quite interesting about your submission is your point about non-domestic rates and the proportion that retail pays. I was just wondering if you could elaborate a little bit further about the impact that non-domestic rates have on retail. To echo the drift of some of my colleagues' questions, what should replace it? It is one thing to say that non-domestic rates do not work, but should we be looking at something that is levied on revenue? Should it be a property-based tax or a land-based tax? Does SRC or BRC have a view of what might be fair and critically, what might be more in line or even synergistic with economic growth, helping businesses and driving the investment in the local environments that rates might not? Thank you for that question. There is quite a lot quite a lot in it. I was going to make it easy just because I like retail. You have a retail interest, absolutely. As a former retailer or somebody who has a stake in the business, I am acutely aware of your expertise in this area and experience. In terms of the proportion and the impact, there are essentially two key ingredients or outgoings for retailers. One is their staffing complement, the costs are on that, and the second tends to be their property footprint, of which the non-domestic rates bill alongside rents can be the largest component. As I said earlier on in response to John Mason, the poundage rate, for example, is at a 23-year high. It has gone up from 41 per cent to 49 per cent, which is some in the region of 20 per cent over the last 11 years or so. When it was brought in, it was at somewhere in the region of 35 per cent when we had the uniform business rate brought in about 15-20 years ago. It is one of the hidden taxes that is not called a tax rate, it is called a fancy name like poundage rates. It is somewhat hidden in that respect, so that is why it is such a big factor for the industry. Obviously, at a time, as you have alluded to, the sector, like other sectors, has gone through quite profound structural changes as well. More retailers have taken place now online than it was previously, and that has been accelerated somewhat throughout the pandemic as well. That is the sort of context in terms of the scenario in terms of why it is an important tax to the retail industry. On the replacement, that is where it gets a little bit thorny. Obviously, both Governments here in Scotland and in the United Kingdom level over the past 15 or 20 years have tried and some have attempted to change local government taxation, and it has been quite tricky at times as well. The long and short of it is that we have put forward a number of proposals and the Scottish Government has adopted several of them, so we have got more regular re-evaluations coming into effect from spring of next year. In theory, that should make the rates system more responsive to trading conditions, so that is a positive. The long and short of it is that we think that the poundage rate or the tax rate needs to come down on a more sustainable basis, and that is obviously one of the things that we have set out. I lie to that. We have a higher property rate in Scotland as a slab tax. We have interest in a finance committee of the Parliament as well, so if you are liable for that slab tax, that cascades right down your entire valuation as well. The reality is that there are 3,000 shops and 12,000 businesses overall in Scotland who are paying that, and that means that they are paying a slightly higher tax rate if they were sitting down south, for example. One thing that struck me was the fact that 20 per cent of business rates are being paid by retail when they are very crudely. It is about 10 per cent of the economy, which in stark terms sets out that context. I want to ask another question. I understand your weariness of things like the tourist tax, but individual levies like that can be useful levers for local government. If I am being candid, my worry is that introducing them one by one encourages local authorities to put them up to the max. I would rather see a basket of different levies. If we designed those correctly, could they not be beneficial by ensuring that local economic activity gets invested in towns, cities and local environments, which should be mutually beneficial both for the businesses that want to do business yet and for the people who want to live there? Is it about getting it right rather than being wrong in principle? I would be interested if other people have a view on that. I think that your point about having a less piecemeal approach to local taxis or taxis in Scotland and more coherent approach is the fundamental one, because we have had a number of those sort of taxis come forward. You mentioned the tourism tax, which I think is on the statute books or is going to be on the statute books. The workplace parking levy is on the statute books, but I do not think that any councils have implemented it thus far. We have obviously got some thoughts on that in our budget submission as well. There was an attempt immediately before the pandemic to end the uniform business rate in Scotland. I allow the 32 councils to set their own business rate. That potentially opens the door to local supplements and things like that. Certainly, a more coherent approach would be very welcome. In terms of individual taxis, we are open to discussions. We make clear in our budget recommendations paper about council tax, which Mr Greer highlighted on earlier on. We are open to that discussion. I guess where we would come from is what does it mean for consumer spending? Are we going to bring in more tax or less tax? What does it mean for disposable incomes? What do alternatives mean for businesses? One of the original ideas under the current Government here in Scotland was a local income tax. That had some implications for employers to administer it. At the moment, each of us administers our own council tax, so that is another aspect to it. The third aspect would be what would that mean for non-domestic rates, which is a key tax. Various considerations were up for those discussions. I have only two other folk who have said that they want to comment on tax, which David Greer said again. If anyone else wants to speak about the issue, please do so. I will let you in. I found it curious in your submission that you said that you want to reduce the number of local authorities, rates assessors, quangos and planning authorities. I do not want to go into all that, but I find it bizarre that you want to reduce the number of rates assessors. There is already a chronic shortage. How does that help, not having people to effectively assess properties? That is not a mischaracterisation, if I may, of what our position is. Savings might accrue from reducing the number of local authorities, rates assessors, quangos and planning authorities, as it says in the submission. We are not saying that we have fewer people undertaking rates assessments. What we are saying is that there is scope to reducing the number of bodies overall. That goes with the grain of the finance secretary when she unveiled the spending review. She talked about 200 public bodies in Scotland and maybe we need to try and reduce some of that. There is one rates body south of the border, the valuations agency, covering the entirety of England and Wales as well. The assessment body is not raised assessors as it is written here? Correct. That is an error in your submission. I would not say that, but it is certainly about the number of bodies. I could quickly open and have a quick look at the document, but we talk about the number of public bodies in their local authorities and others. We do make that suggestion. What was the comment that you were going to make on taxation, if you were going to make one? You asked about tax in the context of the new chancellor's growth plan on Friday. I have been asked a few questions and spoken quite a lot. Just to give you a quick heads-up on our position on that, we like the idea of reeling back on the national insurance contributions, increase both for employees and employers. Retail is the largest private sector employer, so you can imagine that it has quite a hefty bill when that was increased. That is a positive thing. Something that I got less notice on Friday was another U-turn that was on tax-free shopping. The Scottish Government wrote to the UK Government about this time two years ago, asking them to think again about resending tax-free shopping. It was good to see that U-turn announced on Friday. That will be beneficial for various parts of the retail industry in Scotland as well. Obviously, it is not tax but energy prices. The move to try and blunt the announcement and the impact on business was welcome. As I said, the income tax thing does not necessarily apply in Scotland. We have some ideas on our budget submission as to how we should proceed in a Scottish context as well. You talked about fiscal drag, but, of course, when it was announced on Friday, there was no change in thresholds. Is fiscal drag on a UK-wide basis as well as it is not? Yes, absolutely. I would agree. I was making a point that it can be a blunt instrument to bring more people into the tax threshold. It is part of the mix of tools that you will have at your disposal to think about that. I was making the point that in addition to thinking about the rates, you have already got the issue of the thresholds. The point that I was going to come in on has already been made with respect to that, but if I could just add a point on Daniel's point about the tourist tax. We are often asked—we have regular meetings with the civil servants within government about what businesses want at the moment. I think that there is scope to think about how tax happens at a local government level. We have encouraged in our submission completion of the local government's review and looking at the fiscal framework for local government. I would say that the message that we have had quite strongly for members is at this point. Facing all the challenges that they have in terms of rising costs, that is probably not the time to introduce new taxes on business. I would say that I represent 100,000 members in Scotland who would aspire to be in the higher tax brackets, to be perfectly honest. Low pay is still the scourge of the public sector and, frankly, Scottish society. There is merit in discussing, for example, the national insurance raise, which I think that most people around this table are probably at the time opposed, because that was taken money directly out of low paid disproportionately than the higher paid. I want to come in on the point about two points. One on the reduction in public bodies that David referred to, and I am glad of clarifying that it is not the assessors. It is the valuation boards that are already shared services that do not exist in every local authority. They are shared between Lanarkshire where I come from and it is an North and South Lanarkshire shared body. It does the assessors as well as the electoral role and other things that they are responsible for. I do not think that there is much merit in going to the centralised models that they have elsewhere. There is a point here about local accountability and local democracy, which I do not think that we can throw out the baby with the bath water when we are talking about that. The drive towards centralisation is not necessarily a progressive move. The tourist tax is just one example of where local authorities should be given more leeway to raise funds at a local level, which would be democratic accountable for if they wished to raise particular taxes, but specifically they would be raised— Sorry, Stephenie, you are not worried that some local authorities are Gell and Butte Highland and Edinburgh, for example, would benefit disproportionately from such a tax, as opposed to, for example, North Lanarkshire or Clackmannanshire or some other local authorities? From a Lanarkshire perspective, I would have to point out that there are lots of tourist attractions in Lanarkshire. I appreciate the point that you are making, my very dear holiday in Lanarkshire is a great place. The point is that local authorities should have greater flexibility and greater powers at a local level to raise taxes appropriately for local expenditure. I appreciate the point that you are making. I remember a previous debate that I suggested that there could be an element of pulling in tourist tax. Edinburgh, which would no doubt be the one that could potentially raise far more, could be a central pulling, so most of it could be pulled and could assist tourist development elsewhere. The point about tourist tax is what the money would be for. There would be concerns that it was simply to be used to fill the coffers of the local authority for no specific purpose if it was to enhance the experience of tourists and make the better visit attraction, and then there would be genuine benefits to local people and local businesses and local workers for that. The point is that local authorities should have more powers to raise those sort of things for local priorities. We should always remember that local democracy and local accountability has to be central to it. It is the idea that it can just continue to suck up essentially defeats the purpose in the long term. You need to have that local accountability so that local taxpayers, local businesses and local workforces can engage in discussions about what their priorities are locally. I do not think that we should forget that aspect. The tax raising has to be spread out, not just at a central level but at a local level as well. I will bring Alison in his last person to talk about taxation. In your submission, you have talked about increasing minimum unit pricing from £50 to £65, which is obviously another implication. In principle, we are advocating for a polluter pays tax in relation to the sale of alcohol. It really relates to what Daniel was talking about, the opportunity to raise funds at local level for investment in treatments, services and prevention and enforcement. Alcohol costs Scotland £3.6 billion each year. Despite what Daniel was talking about, the challenges that retailers are facing, there is no doubt that they have been making increased profits on the sale of alcohol as an unintended consequence of minimum unit price. If we look at what the business and regulatory impact assessment assessed at, it was £40 million of additional revenue per year. Over the four and a half years that minimum unit price has been in place, we are talking about £180 million of additional revenue. It is clear that that is going into larger retailers but also smaller retailers who are talking about how they are able to compete with larger supermarkets. It is not just a question of iniquity. It is also that this creates the unintended consequence that those retailers are therefore seeing alcohol as a more profitable part of their business, making them more likely to promote alcohol and to rely on that as part of their business model. We think that that is distinctly unhelpful when we have such a chronic relationship with alcohol in Scotland, one that has been getting worse during the pandemic with alcohol-specific deaths rocketing going up 17 per cent in 2020. In terms of both the point of principle of fairness and the additional revenue being used or public goods, but also the practicalities of how this is distorting business models, we think that attacks that are ideally based on the amount of alcohol sold, but if not then a proxy for that through non-domestic rates would be an extremely helpful way forward. I have to say that that was a number of suggestions about how we could raise revenue because obviously all the submissions are disproportionately weighted more or less in favour of additional expenditure. We are in a situation whereby there are significant in-year reductions in the money available to the Scottish Government. There was a 5.2 per cent real-time reduction in revenue, 9.8 per cent in capital this year, and that was with a 2.4 per cent inflation assumption, which has now been blown out of the water over 10 per cent. The point that Ross made earlier was very significant. I am going to let you answer the points that Ross asked in a minute, but first I want to bring Catherine in because there is quite a compelling submission from Engender about how women are disproportionately impacted by the cost of living crisis. I just want to ask Catherine if she can speak to that for a minute or two and look at what practical steps the Scottish Government can do in its 23.24 budget to try and change that. Thanks, convener, and thank you for the opportunity to speak to you today to the committee. First of all, it is someone from Coatbridge just to reassure you that there are lots of places to visit. I have been to Drill of Park many years ago. Drill of Park is very beautiful this time of year. I would say that the key messages that we would want to get across today to the committee are in listening to the discussion about taxation. There is some stuff that is relevant to that. The cost of living crisis is highly gendered. We are looking down the battle of a situation that is going to deepen inequality. Women are often the shock absorbers in families and communities with regard to poverty. Women have also borne the majority of the brun around Covid-19 in terms of limiting the impact on their families. To launch now, in the cost of living crisis, there will be serious implications for gender inequality in Scotland. It is really great that, at this moment, we are getting an opportunity to discuss how the budget could be addressed. In terms of the issues that are facing women, we have a significant and entrenched pay gap. We have wealth gaps across the life cycle. Women are overly reliant on social security. Additional caring responsibilities have major impacts for women in terms of access and employment training. Unpaid childcare and domestic work is highly undervalued. Generally speaking, the care economy is something that is massively undervalued in Scottish society, as it is in many other countries. However, that is one of the things that I want to say. There is massive economic potential within the care economy. It is worth approximately £8 billion a year. There are major opportunities for investment and strengthening of the care economy, and that would have a massive impact on gender equality. In terms of labour market inequality and occupational segregation, that is something that is also impacted by women's caring responsibilities. To go back to your point about what can be done in this budget, one of the things that I would really want to underline is that inequality in all its forms—particularly gender equality, which I am here to speak about—is systemic and structural. It requires a systemic and structural response. Some progress has been made in Scotland in recent years around gender budget analysis and integrating a more systemic budget in human rights and gender-based budget. However, we have a long way to go, and we have a whole raft of practical, enforceable recommendations from bodies such as the Equally Budget Advisory Group, which are there ready to go and which I would encourage the committee to look at and to integrate into your pre-budget scrutiny in as far as you can. How revenue is raised and how it is spent and everything in between impacts women disproportionately and deepens inequality potentially if we do not get it right. That would be the thing that I would say is that we need to have a more systemic approach in Scotland. At the moment, we have made some progress, it is tentative, but we need to do more in terms of building that systemic response in terms of how our budgets are designed, how we raise revenue, and the ways that we raise revenue do not deepen inequality. I will go back to what Stephen said about taking a disproportionate amount of tax from income and not wealth, which impacts women disproportionately. How we raise resources, how we spend them, and how we evaluate them once we have spent them. Are we really achieving the outcomes that we want to achieve with the budget? We can speculate, but the only way that you are going to measure that is if you have a much more systematic approach to lessening inequality in Scotland. That is what gender and human rights budgeting offers you. Okay, thank you very much for that. It is very helpful. Any colleague who was just a comment on that is happy to do so. Michelle, you are the only person who is indicated that they want to speak although I am going to let Stephen in in a minute, as I mentioned. I myself indicated that I wanted to bring in Catherine because I was so struck by the submission from Engender. You have already highlighted the systemic nature of the issues that permeate every budget line and every facet of society. Just off the back of tax, I was reading yesterday that the proposed changes that were announced as part of the mini-budget last week, 80 per cent of the benefit and higher-rate tax will be realised by men, and 77 per cent of workers earning too little to pay tax at all and therefore derive no benefit whatsoever, 77 per cent of them are women. I took a clear message from what you said in your submission about that, although some good works have been done so far, it does not go nearly far enough in holding every single other committee of which we lead on the budget, but who will also give some views to account to set out specifically how their proposals will both impact on women and thinking about that backwards impact and also benefit women to start to really move the dial in terms of equality. My question then is, would you be in favour of this committee putting a firm recommendation that every other associated committee in the Parliament must do that, and indeed—I do not want to put words in your mouth—every submission into this committee, and I would gently challenge everyone here likewise to set that out, because I feel as though, despite some good efforts and some willingness, it feels as though this is Groundhog Day in terms of conversations that impact on women, but you are obviously the expert. I know that you are dying to come back in, but Daniel and Claire also want to comment, and then I will let you round up on the three. I think that your point about the systemic nature is absolutely spot on. I think that especially thinking about social care, disproportionately women that work in it, low pay, but we are also seeing spiralling costs of people stuck in hospital. I mean, I am hearing constant stories of elderly people who are going home. I think that the systemic thing can be both the big macro, but it is also very specific. I would just be interested in hearing your reflections on that. Thank you. I was hoping to come in on another point about prioritisation. If I can add one point on what Catherine said, I would completely agree on the opportunity to think about health and social care, particularly social care, as an area for investment. Some of the work that we completed last year working with academics and the data lab suggested that thinking about ways in which data and technology could be used to support that sector could actually bring huge social and economic benefits. I just wanted to say that I agree with that point that Catherine made. I am going to come back to you on that before too long, but Catherine, do you want to respond to those points? Yes, I absolutely agree with you. I would say that when it comes to mainstreaming, you might have heard of the phrases of mainstreaming, and that is about integrating a gendered response into everything that Governments do. What tends to happen when that is not being done as well as it can be is that you get prioritised projects that are around inequality and gender, which you need, but that becomes the fig leaf by which Governments hide, and it happens all over the world. What you need is a twin track of the investments in specific projects that are entirely aimed at reducing inequality, such as equally safe, etc., that we have in Scotland and that are great projects, but you also need an integrated throughline through everything that you are doing. The situation that you were describing in terms of committees is very much evidence of that, is that we tend to get invited, for example, so I am very grateful to you for inviting us today to the Equality and Human Rights Committee, because that is where gender is dealt with, but that is not where those issues should be dealt with. Also within the budget we are seeing that, so you have the kind of Fairer Scotland statement, which is very good at articulating what those priority projects are that are specifically aimed at dealing with inequality, but it is dealt with separately to the core budget, and what we really need is integration right through the core budget and through lines to see, well, this is how you are raising money, this is how you are spending it and we are evaluating to see if you are achieving the outcomes and if you are lessening inequality through that investment and through that revenue raising, and that is the key to it. It is not an easy task, but it is one that we can take incremental steps to all the time. I would just say in response to your question specifically, that I completely agree with you, and I think that there is no area of policy where women are not impacted differently in some way to men and often more severely. The cost of living in every post-profeasible way—I mean, I was reading an article recently about the highly gendered nature of inflation and the way in which consumables are all sorts of goods that are gendered goods, as they say. Inflation is higher in many of those goods, so women are feeling it at every possible level that it is possible to feel it at in terms of squeezing on already and over-predominance in low incomes and part-time work and care responsibilities and agenda pay gap, et cetera, and inflation on top of that is highly gendered, so I completely agree with you. I think that you have spoken really passionately, Catherine, about that issue. I suppose that we would fundamentally agree with that, but I would want to broaden that out in terms of consideration of the national performance framework and outcomes and driving that whole approach through the entire budgeting cycle. I think that what we are really keen to see is that true consideration of the delivery of the outcome for people and communities in budget setting, in tendering, in all of the different facets of spending money, because we believe that that is potentially going to assist in addressing some of our fundamental issues as a society, whether that is gender inequality or income inequality. I think that that would be my ask of the committee as well as taking that gender approach, thinking about how the NPF is going to be driven forward through the budget setting process, please. Okay, thanks, and I'm sure you'd agree with that, Catherine. Okay, so we're going to move on now because, obviously, the time is marching. The point that Ross made earlier on is a very pertinent one. A lot of the increases in taxation, if the Scottish Parliament was to agree them, would have to be implemented from April because, obviously, we have to do that under the Scotland Act and we're faced with funding pressures of £1.7 billion in the current financial year, so how do we deal with those, given the financial strake jacket the Parliament actually has, Stephen? I think that politicians of all colours will talk about priorities and trade unions only any difference. I think that we all understand that we cannae get—we've got a wish list that was not going to be delivered in April, and that's understood. In the current situation, our priority, in terms of the point that I would absolutely agree from what Catherine said as a trade union that's 75 per cent female, we experience this all the time. We need to focus on that question of equalities, climate change and the targets that we have to reach for that are also have to be core to what we do, but the moment the priority, far as we're concerned, has to be about enabling people to get through the cost of living crisis. That means putting money and people's pay packets appropriately in the discussions that we had recently with the Scottish Government, the Scottish Government and the Scottish Government about local government pay. The additional monies that we've got from the Deputy First Minister and the First Minister in our late-night sessions were about trying to achieve what we referred to as a flat rate outcome so that everybody gets the same. We didn't get that, but we did get for everybody below £40,000 a flat rate. The effect of that was that the lowest paid in local government, who are hugely prominently female, were getting offered and are being consulted at the moment on a pay-off of 10.5 per cent of an increase. That doesn't change the world for them. It's not life-changing amounts of money, but it does mean that the trade unions have prioritised trying to say that money needs to go to those people in greatest need, which happens to be the lowest paid, which predominantly is female. We would say that that has to be the priority. I know that the Government will be in discussions with every other sector of the public sector, trade unions, about pay and all the rest of it, but that needs to be recognised. We cannot continue to provide the kind of services that we want to provide on poverty wages and therefore that needs to be a priority. Beyond that, we would say that we need to prioritise anti-poverty measures in the Scottish Government. I have taken a lead on a whole number of the free period products, for example, which is a great world-leading thing, which fundamentally addresses the question of poverty. The expansion of free-skilled meals would be another example of that, but I come back to the point that Catherine made about the care economy. One of the things that we shouldn't do is that we shouldn't spend huge amounts of money on structural change that won't actually achieve any change to the actual services that are being delivered. The proposal for national care service, where hundreds of millions of pounds will be spent on drawing up and running another organisation, is not a sensible approach at this point in time. Any money that we have for investment in care needs to be invested in care, not in infrastructure, moving the gold poster, moving the offices and transferring staff and all that. That would be one of the things that we would say has to essentially be dropped. That is not a priority, the priority is the delivery of care. Ross, you asked the initial question, so do you want to follow up on that? Yes, I am interested. Beyond national care services, as a good example, we would share unison's view on that. As a tangible example, there is a lot of other stuff in the submission, though, that all of it ticks the boxes that you have outlined there, Stephen, in terms of priorities. Whether it is free-skilled meals or, I presume, unison's main focus on increasing funding in HE and FE is not just equity for students, but because there are substantial numbers of low-paid workers in those sectors. How do we prioritise between those different areas of spending that would all raise wages of low-paid workers, lift children out of poverty, but we cannot do all of those at once is the issue that we have, so should it be free-skilled meals or should it be public sector pay, should it be more funding for colleges or more funding for universities? In principle, in our utopian world, it should not be a choice between those, but in the next few years it will be a matter of choices. We will have to make them, but I would be keen to know what the trade union movement's priorities would be. I am tempted to say that, so it is your job to do it. That is what we are actually for, Ross, but I will give a stab. Our priorities are saying that people need to be able to cope, they need to be able to heat, they need to be able to buy their food, they need to be able to buy their clothes for the kids, so that is why pay is not just about pay for workers, it is about how our people right across the spectrum survive, and that includes that for the knock-on effect, as I said earlier on, about the economic impact of that of people spending money locally. That generates economic development elsewhere in the economy, so we cannot get away from that fundamental that people, workers need to get paid an appropriate rate when inflation is heading towards wherever sky-high rate is heading towards, we need, as a Government, the responsibility to say that we need to enable people to do that. The other aspects of it I think are part of that, so we should talk more regularly about the social wage, you know, so free school meals and free prescriptions. We have members in unison, as I said earlier, and we go at lots of meetings now, so we have members in unison down south who are coming to the union saying that I cannot afford to pay for my prescriptions. Now, in Scotland, we do not pay for prescriptions, so that is a really important thing. Now, where the priorities are all that lie are a difficult one, and I do not envy the Parliament's difficulties in that, but a combination of prioritising pay, looking at where we can raise the additional income from. One thing that I should have said earlier on, we could increase the take from council tax without primary legislation, by increasing the bans, for example. I think there has been a consensus about changing the council tax for many, many years. We will never get around to doing it. It is too hard. It is too difficult. I am not sure what the reasons are. We should continue that work, but in the short term, there is no reason why we could not introduce additional bans, so that people in the bigger houses and the bigger properties pay a bit more. Now, I do not have off the top of my head to tell you how much that will bring in, but that will bring in some money. It is a combination of saying what the priorities are is ensuring that people do not go into poverty, that people do not starve, that people can heat their houses and all the rest of it, along with looking to see how we can increase the pot, if you like, so that the choices might be less difficult if we have a bit more extra money in the pot. I have now got five people who are keen to come in, so I will take you in the order that people indicated that they wish to come in. First, I will be clear, followed by Daniel. One of the things that jumped out at me in terms of how money could be saved, if you like, from the public sector, is your section on digitalisation. You said, and I quote, As been estimated that Scotland's health and social care data could be worth £800 million every year and deliver an estimated £5,400 million in savings for NHS Scotland, 38 per cent of its current budget and three times its predicted budget shortfall by 2025. The sheer magnitude of those figures lept right out at me. Given that two thirds of NHS budget goes on staff costs, I am struggling to see where a 38 per cent budget saving could be made. I wonder if you can tell me how that could possibly be delivered on over a time scale and what the implementation costs might be, as well as the contribution that you are going to make in the first place. I will take that point first and then if I can make a comment on the prioritisation. We undertook quite a big piece of policy work last year in conjunction with the data lab at Strathglad University and the healthcare sector to look at how health and social care could benefit from better use of data and technology. It is called Mind the Gap, if anyone wants to look it up. I think that we did circulate it in Parliament. What could we achieve if we really started to embrace data and digital in both the health and social care sectors? The figures that you are referencing came from two UK studies that we applied. I appreciate that those are broad assumptions, but they were applied to the same assumptions. There were work carried out by Ernst and Young and work carried out by Dell looking at, one, the potential social and economic benefits from changing the way that we use data and technology. Some of the social benefits that they had estimated were reducing the number of falls that people might have, or using technology to predict when someone might have an asthma attack and the consequences for them and the healthcare system of that. There were social benefits and economic benefits that they calculated from. Thinking about how technology could either be used in buildings or used in delivery of healthcare, including reducing the number of sick days in the wider workforce and in the health and social care workforce. The bigger number that will be apportioned to Scotland, according to our chair of population, was about all the different ways that data could be used. That stretches from making buildings and facilities in the health and social care workforce. The £5.4 billion a year and the £800 million is specifically for the NHS. Would that be right in saying that? No, actually both. The £800 million was an estimate of economic and social benefits from investing in data. Up to £5 billion of savings were from applying data and technology right across the health and social care workforce. The states, the upskilling of workers, the use of technology, the creation of a single patient record and the potential commercialisation of anonymised patient data. Working with academics and other experts in this area, we looked at all the opportunities for improved patient outcomes and a transformed health and social care system. One of the recommendations that we made was for a transformation fund to be set up to enable some of that innovation to happen at peace. Over what time period would it take to implement that? A lot of people have said to us in evidence last week and, indeed, in submissions this week that if you give us money to invest in XYZ in five or ten years, we will deliver such and such savings, but the problem is that we have, as I think we would all agree, that that is something that we are keen to do, preventative agenda. Some of us, John and I, were on the finance committee 10 years ago, and we discussed all that, but the issue is how do we actually deliver in the financial year 23-24, which is staring us in the face, it is only a few months away. There are real issues about we want to invest more, but what do we disinvest in, in the meantime, to free up the resources to be able to do those kind of things? Our view was that the health and social care data strategy that is being considered at the moment is a good place to start, and the people who are looking at that will have quick wins and longer-term agenda items that they can implement, but I imagine that if you talk to any GP, surgery or health board, there are probably things that they have that they could invest in and they are very aware of things that could make savings now with investment. It would be interesting to think about that transformation fund as something that could be perhaps taken from other budgets, but used to generate change and pilot change in the short term. Just on the wider point about priorities. Just before that, what kind of timescale would be able to deliver these savings? Realistically, you are looking at a five to ten-year time horizon, but that is not to say that you have to wait for five to ten years to change to happen, but you make a start and you can start to affect budgets. The point that I just wanted to make was around priorities and the conscious of time, and Stephen has spoken about increasing the pot. Fundamentally, as an organisation, we have other organisations, councils, universities and colleges, for example, so we represent the whole civic society. We ultimately want to get to the same place, we want to get to a place where we have good public services and we have a well-being economy for Scotland, so I just want to make that point up front. I think that maybe where we have a slight disagreement in the moment is in terms of how we get there. One of the things that we would encourage the committee to be thinking about is, in addition to how do we spend the pot and how do we sort of re-prioritise, is what is it that we are spending, sorry, of the things that we are spending on, how many of those are going to make the pot bigger in the long term. So our concern in looking at the figures were around the reduction in 16 per cent in funding for enterprise, tourism and trade, 8 per cent in funding for colleges and universities. Those are all critical sectors that create economic growth and will allow us to increase tax revenues over the long term for all earners, not just high earners. That is one point. The second point, in what we are hearing from members at the moment, is that there are a lot of good plans and strategies that the Scottish Government has on the books. The national strategy for economic transformation is a good example. We have spent a lot of time, our blueprint and where those ideas have come from, we took a year working with our members to develop that and put some of those ideas forward. We have then spent the best part of the last year working with the Government to make suggestions about where change could happen and the policies that could be taken forward in the national strategy. We have also got members who have asked us about the energy strategy, the good food nation strategy. There are great plans that can transform the Scottish economy, generate new high-paying jobs and attract investment, but they need the support to do it. Our concern at the moment is that the national strategy for economic transformation, we must deliver on that to create the long-term revenues for Scotland that we need to have the public services that we want. Our plea would be to think about the prioritisation of spending and think about support for investment in infrastructure, particularly for rural areas, investment to support the innovation strategy, which is a forthcoming investment to support the export plan and investment for universities and colleges, which will provide the skills and needs that we have to create new well-paying jobs in Scotland. I want to ask Stephen Cushan that, but before I do, just on that point, I think that one of the key issues that we have got, both from the way that the private but also the way that the Scottish Government conceives productivity and growth, is that it views public services as not being almost part of the economy. When public services are about 45 per cent of the economy, they drive innovation or should be driving innovation, should be driving productivity and should be the foundation for growth. One of my criticisms of the end set is that it does not have a clear space for public services and public sector within that vision for productivity and growth. I completely agree with you about public sector pay. I think particularly that the very long-term squeeze that has been put in local government has had a direct impact on pay amongst some of the most critical workers. However, we are now facing, I feel, a real crunch and one that I do not think there is enough active discussion on, in that the public sector pay bill is about £21 billion out of a total budget of £44 billion. We have also had vague suggestions from the Scottish Government that they want to reduce public sector headcount to pre-Covid levels. I am being really blunt and I am just really worried that there is a big crunch coming and people are not being honest about it. At the very least, I think that there is a genuine challenge about how people in public sector need to pay increases to meet their bills. When you have that high-level pay bill, that is difficult. I wonder if there is a unison view. Do you share my fear about the lack of frankness about what may be being considered in terms of public sector headcount? To a certain extent, I do not think that it was perfectly hidden in the finance sector to talk about a £30,000 reduction in headcount going back to pre-Covid levels. That is 30,000 jobs of predominantly, relatively low-paid, and because it is low-government, it would be predominantly female jobs as well. Any economic development to create jobs would be undermined by that loss of jobs in that area. I think that that would be a real mistake. We have always argued that the public sector is a driver of the economy. In some areas, the public sector is the only main employer. The school, the local hospital or the doctor's surgery create jobs in local areas. Start chipping away at that, you start undermining the local economy as well. In South Lanarkshire, where I come from, we have a large rural area. The school and the local health sector are the only things that provide real jobs. People do their shop elsewhere or they do it online. The local shops are all closed and so on. If we squeeze the public sector in that way—it frustrates me that people talk about productivity and public sector as if we did not have thought of that before. I have been in the local government for a long, long time and I remember all the different best values and lean working and all the different management schemes that have come in in order to try to squeeze more out of a reduced workforce. There is nothing more to squeeze in local government. My colleagues and I help to say the same. Further education has been squeezed really hard over the past few years. We continually want more but we are continually giving less funding for it. That cannot continue. We are at a crisis point and a whole range of areas. People talk about growing demands on care. We cannot recruit enough people into care. I am on the bank for care because every day I get emails saying, can somebody cover a shift in one of the local authority homes? That is the state we are in. It is the same in the early years. We all understand the need for excellent childcare but we struggle to recruit and retain people to work in that field because the wages are not great. The whole productivity in public sector language is just where it is squeezing more out of fewer people. That cannot go on. We need to invest in public services in order to create the safer, better communities and more equal communities that we all aspire to. There is no other way around it. You cannot undermine the public services in a way in which the squeezing public sector funding over many years has. You end up having an economy that is starting to crumble because the social infrastructure is not there to sustain people in work because they have to look after their parents or their kids and so on. That is integral to the future. I am trying to get into so many people. There are so many people who want to speak on track as many folk in as possible. In terms of your submission, you have said that we believe that funding for affordable housing should be prioritised alongside health and social care and social security spending in the coming budget. I think that there is a lot of sympathy for that. You say that investing in high-quality affordable housing should be understood as preventative spending, which saves money in health and social care, social security and other systems. You also talked about calling for increased investment in advice services. There is no doubt in music to Paulie's ears. However, how do we do that? How much additional investment are we talking about? Increasing investment by what? 1 per cent? 5 per cent? 10 per cent? What do we de-prioritise to be able to afford that, given the financial street jackets that the Scottish Parliament is facing? Just to come back to some of the earlier points about prioritisation, I agree with colleagues who have said that this budget should absolutely prioritise the cost of living crisis. However, there are short-term and long-term measures to do that. To come to the short-term measures, over the past few years, SFHA has distributed the social housing fuel support fund element of the fuel insecurity fund on behalf of the Scottish Government. That part has been about £2 million every year for the last three years. Generally, it has been spent over a period of four to six weeks in previous years. This year, we had £2 million worth of bids in 48 hours and £6 million worth of bids in the first week before we had to close that. We are not going to be able to meet all of the demand from housing associations to deliver on the immediate issue of the cost of living crisis when it comes to fuel. On the short-term issues, we need more investment in direct support for people to pay the bills. Housing associations do a huge shrinking in real terms. Where should that come from? Additional taxation, as we have discussed earlier on, or from other budgets? If so, which budgets? Or do we have a combination of the two? That is the issue that the Finance Committee faces every year when everybody suggests that we should have more money now and through investment in the future. The difficulty is that the financial street jacket is in, so we are looking for real suggestions on how we can yes, prioritise, but what do we de-prioritise? I absolutely recognise that challenge. What I would say is that I am not going to tell other Government departments or other areas of policy what should be de-prioritised. For me, that immediate and emergency response needs to be the number one priority for revenue funding right now. Housing associations work tirelessly to support tenants who are facing the cost of living crisis and who are in poverty, but what we are seeing is, as Steve has just described, the social infrastructure around us crumbling, so the Food Pantry Network, for example, advice services all really struggle to provide the services that are needed, so we need to see an element of that. On the longer-term response to the cost of living crisis and some of the points you raised around developing homes, there is a 110,000 home target over the next 10 years, and, unfortunately, we are not in a position to be delivering that given the current economic crisis. Over the last 12 months, the cost of building homes increased by 17 per cent on average across our members. Over the last two years or so, it has gone from £160,000 per unit to more than £200,000 per unit in most cases. That pressure is seeing the viability and longevity of contractors at a local level put under enormous pressure. We are really concerned that, if there is not sufficient investment now, the problem only grows. When we talk about prioritisation, we talk about outcomes and the outcomes from developing affordable homes are huge for the savings that people make individually. We know that the cost of renting a social home is around half the cost of renting a private home. We know that there are enormous health and wellbeing outcomes or enormous economic outcomes of developing homes. That could grind to a halt over the next few years. The intervention for UK Government and the outcome of that over the last few days has devalued the pound. That will only make building more expensive. If interest rates go up, that will make building for housing associations more expensive. Ultimately, we are facing a crisis in the development of homes, which will only lead to more difficult choices further down the line. If we do not build the homes that we need, the cost of the health service will increase. The number of people out of work will increase. I completely accept the strait jacket that the Scottish Government faces here, but it is about prioritising spending that has long-term outcomes. Others have spoken about using the national performance framework, the outcomes within that, as the lens through which we view our investment and long-term investment. In new and existing homes, decarbonisation is important. We cannot get there probably in detail today. We need to be driving a lot of that. The only other point that I would make just around some of the financial implications of policy development over the last few weeks is around Scottish Government intervention on rent. We know that social rents in Scotland, as I said, are around half of that of the private rented sector. We also know that social rents in Scotland are lower than anywhere else in the UK, and that has been a key driver in poverty being lower in Scotland than it is anywhere else in the UK. Ultimately, that has been done without Scottish Government intervention. Having worked in Wales and other parts of the UK in the social rented sector, often Government policy has driven the unintended consequences of rent increasing. There is a real concern about what that intervention from Scottish Government does to investment. To give just one example, because this is really important about the long-term financial implications here, ultimately the legislation that is being proposed will not stop housing associations putting up their rents on 1 April, if the proposals are as described. However, what it does to lender confidence is enormous, so one housing association that I have spoken to in the past couple of weeks was due to refinance a £90 million facility, so around half of that was refinancing what they had already. The other half was to develop new homes. The half that was for developing new homes will now not happen, because lenders have been completely spooked by Scottish Government intervening in rent policy for the first time. When we talk about long-term consequences, long-term priorities, it is the unintended consequences that we need to really explore. When it comes to rent and when it comes to the cost-of-living crisis, housing associations will always prioritise affordability for tenants, and we are all in a position of accepting that it would be below inflation when it comes to 1 April this year, because it is simply not acceptable to put rents up by inflation at the levels at which they are. That would have had an impact on the business plan, but unfortunately the intervention over the last few weeks has made that challenge even greater. Given that a significant proportion of rents comes from housing benefit, what are the treasury implications, in other words, of additional funding coming to Scotland of the impact on Scottish housing associations and local authorities? We do not have exact figures, but between 65 and 70 per cent of rents to housing associations has been paid by housing benefit. When the UK Government cut social rents in England in 2015, the IFS did a really important piece of work, which demonstrated that there would be almost no benefit to the tenants and all of the benefit would be felt by the exchequer. I am assuming—I have not got the figures in front of me—that it would be a very similar outcome here. Ultimately, Scotland will be losing out on investment in housing and in communities as a result of that policy. The unintended consequence of that is the treasury gains in London and Scottish Housing Association, Scottish tenants and Scottish communities losing out. What would the practical impact be for housing associations if they got less incomes and said the freeze did go beyond March? Would you cut back on maintenance or that kind of thing? That is my first point. The second point is on the kind of capital expenditure. What is your thinking if we are assuming that we are going to build more houses or should we be doing more on the retrofit side to try and improve heating costs and all that kind of thing? Have we got the balance right between building new houses? Passive house comes into that as well, because I have some in my constituency—very high standard but more expensive. How do we get the balance in there? On the first point, that will inevitably vary from association to association depending on their individual position. Given the difficulty of developing homes at the moment, a number of associations are taking decisions to either pause development programmes or consider that over the next few months. Development will be the first place that you would look. Inevitably, the longer the impact of any rent freeze, rent cut or whatever it might look like takes hold, that would have an impact on maintenance. Again, England is fairly instructive here with what happened with the 1 per cent rent cut. We saw planned maintenance budgets drop off a cliff, we saw job losses and we saw, unfortunately, community investment. I do not think that that has ever really recovered in England community investment. The social benefits of housing associations were well ultimately suffered in that instance. We may see similar here. I do not want to be alarmist because we were looking at modest and moderate rent increases this year anyway and would have had a situation to manage, but there are long-term consequences across a business plan. When it comes to the right balance, ultimately, we share Scottish Government's ambition to do both of those. That requires huge amounts of investment, huge amounts of work on what supply chain looks like and huge amounts of thought around how we get that balance exactly right. At the moment, the worry with retrofit is that the homes we build now will provide additional financial capacity across the business plan in future to do more of the retrofit. If we do not build those homes, our capacity to borrow more into the future to deliver on the decarbonisation agenda becomes constrained. It needs to be a fine balance of both, but if we stop developing now, decarbonisation will become harder in the future. I have a whole load of sandstone tenements, which are incredibly difficult. It is expensive, I accept, to retrofit them, but I sometimes wonder if we should be doing more of that. We ultimately need to be doing more. At the moment, we are in a phase where Scottish Government is reviewing the energy efficiency standard for social housing. The proposed second version of that standard probably did not go far enough in terms of net zero. For me, it was not closely linked enough to the ambitions around fuel poverty either, and we need to align those more closely in the standard. There is a bit of work to do to get that right. What is really important is that we now get the fabric stuff right. When you look at some of those tenement buildings, that is going to be really difficult. People are talking about heating solutions such as heat pumps and distributing. They will not work in the tenement buildings unless you have that fabric right in the first instance. What we need is a clear sense of direction around what the standard is going to be following the review from the Scottish Government, and, as part of that work, some concerted work around what the right funding mix is. The split that we have at the moment, which is broadly 50 per cent Government funding, 50 per cent private lending to build a home, probably is not going to balance out in the same way on retrofit. We have not quite worked out, A, what the full cost is, and B, what the right financial mix is. There are three actions that you need to get us there and to be doing much more of it. We are probably going to need more Government grant. We are going to need some concerted effort to reduce costs, probably through collective procurement, through a much more national plan around what we do on retrofit. We are going to need to unlock some of the financial constraints that housing associations have. We are probably, as a sector, not going to be able to absorb all of the lending on ourselves that will be needed, because the bill is far greater than the bill that we are paying to develop homes at the moment. There may be solutions, for example, through the national energy agency. Could we use that as an off-balance sheet lending vehicle? The Future Generations Commissioner in Wales has done some really interesting work around how you might use the energy service company, for example, to do some of that. I think that there are solutions. We are not quite there yet, but if we can focus on the fabric first and approach for now, that will set us up once we are a bit further down the line. I thank you. Alison Duffol and my Ross. To return to a point that you had made about the consensus that we should be trying to get upstream and prevent problems in the first place, rather than waiting until they become very expensive to turn around. We have underestimated the potential for public health interventions, which cost little, if nothing to the public purse, to prevent non-communicable diseases, which claim 83 per cent of all the lives lost in Scotland each year. Just last month, a new alliance, the Non-Communicable Diseases Alliance, which is a group of 20 charities and royal colleges, published a list of eight asks of Parliament and Scottish Government, which are for legislative changes to control the price, the availability and how products, tobacco, alcohol and unhealthy food products are marketed in Scotland. The British Heart Foundation has estimated that around 10,000 lives a year could be saved if we reduced the consumption of harmful products. There is a tendency to think that that prevention is very much a long-term endeavour, but looking specifically at alcohol deaths, alcoholic liver disease can kill somebody very quickly. If we look at the profile of recent deaths, the fact that we saw a 10 per cent reduction in alcohol-specific deaths, which are 90 per cent alcoholic liver disease in 2019, and an increase of 17 per cent in 2020, shows how quickly harm can be affected by changes in levels of consumption and patterns of drinking. So there is a real short-term benefit, as well as a longer-term benefit to these preventative actions, which, as I say, cost little, if anything, to implement in terms of the public spending. I would like to jump back a bit to something that Claire said a couple of moments ago, because she listed some areas where public spending is going to be reduced over the next couple of years, particularly enterprise and skills areas in particular. I do not think that anybody would pretend that that is a good thing, but the SEDI's position is also against any new business taxes and not just an increase in income tax but an opposition to fiscal drag through keeping the rates as they are. If there are areas that you are looking to increase spending but without any new revenue, there must be areas of public spending that you would de-prioritise elsewhere, could you expand on that a little bit, because I am otherwise not sure how to resolve your tax position and the spending priorities that you have outlined? We have already touched on one area where we have identified that there are potential efficiencies to be made in health and social care. Although we recognise that there are pressures there, that is one area where there could be savings to be made. I suppose that the size of the budget for health and social care relative to the cuts in other budgets, which are proportionately much smaller, would suggest that there is potentially some rebalancing that could be done. Just one very brief thought to David. You made an interesting remark. I think a while ago now in the conversation about opposition to income tax rises on those of modest income. I just pushed you a little bit to define modest income. Are we talking about the cleaners on £18,000 that Stephen mentioned, somebody on an average salary in the kind of mid-20s? Or are we talking about folk on £40,000 who with fiscal drag are heading towards the point of being hit with the higher income tax rate? We haven't put that explicitly in our budget recommendations paper, but we were talking about those on the bottom two or three rungs of the Scottish income tax ban, so start our basic intermediate. Obviously, we have put forward a number of suggestions in the paper, in our budget recommendations paper, on saving money. I guess just picking up because I didn't get the chance to come back on what Alison was saying earlier on. We would suggest that the committee give short shrift to the idea of putting an additional business rates levy on retailers. I am happy to follow up in writing, as to why we do not support that notion. Partly for the reasons that I have articulated earlier on, retailers are already paying a poundage rate. Many are paying a higher property rate on top. Many will pay the business improvement levy on top of that. In Alison's paper to the committee that she talked about, it would be akin to the large retailer's levy that was enforced in the early part out of the last decade. If I remember correctly, that cost a lot of money. That went into the general kitty and did not go into any specific pot in terms of preventative spend. The third point that I would make is that Alison's paper goes on to talk about transparency in public spend. She quotes that as £148 million spent on alcohol and drugs, harm reduction, but it talks about it being unclear as to what that money has been spent on. Indeed, it goes on to say that it is difficult to say if further investment is needed. If money is already being spent on reducing alcohol harms, then it sounds like, based on her analysis, that needs to be the focus of making sure that that is well spent as opposed to bringing in a new addition of taxes. I will let Alison come in in a few minutes to let you know that we are already at 11 o'clock. I do not want the session to continue much longer. I will let Paulie and Catherine in and then I will let Alison respond to David. We will then wind up this session. We will then briefly ask about transparency and then I will give you some due notice of this. I will ask all of our guests what they would prioritise if there was one thing that the Scottish Government could do in this 23-24 budget. That is one, not two, three or four. One thing they would prioritise above all else in this forthcoming Scottish budget. I want you to think about what that would be and to articulate that after we have discussed briefly transparency. First of all, we will have Paulie, Catherine, and then Alison. That is really challenging, but I have got the floor so I can ask for two things maybe with one just now. You are getting one and one only. I suppose that Aaron already articulated a point about funding for advice services. Our advisers now are giving 20 per cent more advice than they did in the pandemic and we are not really into the winter yet, so there is a real crisis for citizens advice. That is because of a long-term pattern of poor funding and I think you were asking about how to prioritise. Rather than thinking about what, I think that your point about transparency is a good one in that. If you do not have transparency between the outcomes and where the money is being spent, it is really hard to make decisions about where to place that money to realise best value. The things that you would ask for is thinking about building funding systems that allow for that transparency, that allow for that outcomes focus and that allow for focus on preventative spend. That really is our ask in terms of this committee, is trying to push forward that agenda and push forward the transparency but also that relentless focus on outcomes because that is the only way we are going to overturn some of these issues that we have discussed today. I notice on your submission you said that for vulnerable clients with complex needs there is simply no substitute for local face-to-face advice in person with a trusted empathetic adviser. Despite the push for digitalisation, I am absolutely 100 per cent in agreement with that, not least because I was myself as a vice volunteer way back in the 1980s. Just before I let Pauline in, I should give the apologies of Liz Smith who has had to leave because she has a funeral to attend. I just wanted to bring together a couple of things that have been discussed so far, just to use them as an example of the gendered analysis, equality impact assessment and the necessity of them. In terms of the point that we were making earlier on, that Stephen and others were making around local authority cuts or efficiencies, cuts to childcare education, social care and transport, those are things that are going to impact women's ability to participate in the economy to a disproportionate extent. Women are not just recipients of support, they are drivers of the economy, so the extent to which those cuts should be analysed for their impact on women because if they are not, you risk a false economy in terms of making those cuts and the limitations that they will place on women in terms of participating in the economy going further. The other thing that is also an example of that is digitisation. Whilst I am entirely supportive of that agenda, there also has to be analysis about what jobs will be lost through digitisation, and often that is the lowest paid jobs and often those jobs are done by women. There is also an element about people who are on low incomes and women in particular, how do they access the benefits of digitisation. Those are all great things to be talking about, but we need to have that analysis of them. The only other thing that I wanted to mention is that you have asked about what you should be prioritising and what you should be cutting. We have, in gender, done a huge amount of work on the specifics of the tax system, but what I would recommend to you is that, in terms of human rights standards, it is quite clear that you should be working on the minimum, safeguarding the minimum core standards for the most vulnerable. The SHRC and the Scottish Women Budget Group have done a lot of really good work on how to maximise available resources, what can be done within the limitations of the Scottish tax system around local government taxes, council taxes and what could be possible in the area of addressing tax evasion within the limitations. That is not in gender's work, so I cannot claim it, but I would encourage the committee to have a look at what the Scottish Human Rights Commission has done in that area. As I mentioned earlier, the additional revenue that retailers have accrued as a consequence of minimum unit price based on the Bria assessment would amount to about £180 million over the last four and a half years. It is not just a question of the accrued comparison with the public health supplement. There is additional money that the retailers have benefited from as a result of minimum unit price. We believe that there is proof of concept of the effectiveness of minimum unit price in reducing consumption. When we reduce consumption, the benefits are disproportionately felt in the most disadvantaged groups. We have an opportunity here to continue to reduce health inequalities by maintaining minimum unit price, and we believe that we need to up-rate it in order to ensure that we optimise the benefits going forward. In terms of the revenue from a public health alcohol harm prevention levy, we believe that there should be greater transparency over how that money is utilised and that it should go towards alcohol treatment, where we see a massive alcohol treatment gap even before the pandemic alcohol services were inadequate. The last assessment, which is now almost 10 years old, showed that only one in four people with dependency were accessing treatment, but we now see a fifth fewer people entering treatment prior to the pandemic as when that assessment took place. We have a big gap, although there has been a significant additional investment, most of that is earmarked specifically for drugs. Although we have a recognition from the Scottish Government that we have twin public health emergencies of alcohol and drugs, the response has, to date, been far greater in relation to drugs than alcohol. We are not recognising that one in 15 of all deaths in Scotland is due to alcohol. We need a proportionate response to that problem. Thank you very much. I should say that my father died of alcoholism, so I am very sympathetic to some of the comments that you have made. We are going to move on to transparency. How has the Scottish Government afflicted its commitment to fiscal transparency in the spending review, and how can it best ensure that spending in the budget 2023-24 can be properly identified and tracked? Some people did not actually answer that question in their submissions, but you said no comment. Why was that? That is because it is not our area of expertise, and we do not have member feedback on that, and perhaps, with hindsight, I should have asked our members for views on that. Fair enough. That is fairly succinct. Do you have any other comments that people want to make on transparency clear? A quick point on transparency and just a very quick point, if I may, on the discussion that we had about digitisation and productivity. Our vision for digitisation of public services is that we hope that it is a positive one. One that allows every employee in public services to have the tools. We are all sitting here with phones, laptops and what have you. We all have the tools that we need to do our jobs, and one where service users can choose to receive that service in a way that suits them. It is about choice, I think. Anyway, I hope that that has come across as a— An issue about digital exclusion, but we will not go into that. No, I totally agree. It is about designing it to ensure that people are not excluded. Just on the point of transparency, we have made a recommendation for something called a prosperity impact. It does not exist at the moment, but it is something that we would be happy to contribute some thoughts on what it might look like. I think that it is really good back to my earlier points about thinking about spending. During the Covid pandemic, we talked about the foreharms to the economy and health, etc. I think that it is not losing sight of that and the discussion today. I suppose that hopefully we have tried to make the point that we need to think about how we are going to grow the economy long-term. We would encourage you to think about assessing spending proposals also in the context, not just in terms of outcomes, but how they are contributing to Scotland's long-term economic prosperity. Thank you. Any other comments on this issue, David? Thank you, convener. On the broader point about transparency, one of the upsides of the arrangement that we have at the moment is that the finance secretary, presumably November-December time, will make an announcement about tax rates. That gives employers and individuals a few months of a sense of what they have to do to make that happen, to make it work and to work out the budget implications for them. That is a good thing. We are in favour of as much predictability and certainty as possible. Clearly, if you were to shift away from, to say, the business rates being set by ministers to councils, there might be a risk that councils will set the business rate at the time they set their own council budgets for the year, which, if I understand it, tends to be February time, which is obviously only a handful of weeks before the start of the new financial year. Anything that can give more predictability and certainty is a good thing. I think that I am right in saying that in the programme for government there is a commitment to a review of regulation. We are hoping that that comes up in the emergency budget review statement. I am assuming that it is over the next week or two. In order to give as much certainty to firms going forward as to what is going to progress in terms of devolved regulation, but also what is going to be paused or, indeed, jettisoned. We, of course, are committed to carrying out pre-budget scrutiny and trying to influence through the evidence that we take from organisations and people at yourselves that draft budget. Then, of course, we scrutinise the budget itself over a number of weeks, including in the chamber itself through debate, whereas in the UK the chancellor stands up and says, this is a budget. It is quite interesting to look at the different systems. Anyone else want to comment on transparency if not we will move on? Sorry, Stephen. It is not my area of expertise, but I think that experience in workplaces is the greater engagement with the workforce, the better. Some of the innovations and some of the solutions to some of the problems are better found by engaging with more people. I appreciate that dead easy to say and difficult to structure how that would happen, but I think that there is a greater need for greater engagement. Frankly, part of that is illustrated by some of the discussions that we have had here, where ideas are floated around the table and you quite rightly could throw back at us, but what about? That is the kind of process that I think is necessary. I would say that the greater engagement from Australian perspective would be appreciated, and I am sure that various other stakeholders would also want that. How that is manufactured or how you create that, I am not sure about, but I think that the more open we are about the discussions, the better. I cannot agree more. I have worked in the third sector and the public and private sector. When I was working in the private sector, there was a staff suggestion scheme and it had almost no impact. How can the company save money and do things better and better? Why do not you incentivise people so that they get a share of the savings? The company brought in a scheme whereby employees could get up to 10 per cent of what they actually saved by doing things more efficiently. They were absolutely inundated by suggestions because there was an award for the people who were making those suggestions. Obviously, they were not all implemented, but I think that incentive had certainly stuck with me. Anyone else on transparency before I go on to the next question? Very brief point, just as part of that. What is really needed in the longer term is better data in terms of budget decision making. At the moment, you do not have access to good enough data in terms of, particularly from my point of view, equality-based data, disaggregated by gender and so on. You are not really able to track impact to the extent in that a lot of the decision making and how it is aimed at addressing those issues, there is not sufficient through-lines in terms of transparency because a lot of the time you do not have the good enough data, it will be making the decisions about impact. That is very helpful. I am going to move on then. As I set the header of light to everyone's number one budget priority, I am going to ask for volunteers who want to go first to say what they are, and I keep emphasising their number one budget priority. David? If I may dislyte on the point that you made, convener, if the Government takes forward any of the suggestions for savings in our budget recommendations paper, I am very happy to get 10 per cent of the savings emanating from that. It might help pay for any of Alison's tax increases, who she wants to see increased. Joking aside, we have sick recommendations, key recommendations in our paper. I think that you have challenged us to a light in just one. On the basis that Mr Swinney might take forward some ideas on income tax, I will focus instead on something that can help to keep down short prices, which is to rule out an increase in the business rate in the coming financial year. That would be our top recommendation. Thank you very much. Anyone else? Briefly, I would say that investing in women and investing in women who are on low incomes has a major return for society and for the economy. It builds more resilient communities. I would say that the one thing is that investing in women on low incomes through social security and improving the social care system in Scotland, but also for this particular committee, making sure that the decision-making that you are making as part of this budget process is not having untold, unseen consequences that will worsen in equality. It is a broad one, to ensure that the recommendations and the delivery plan for the national strategy for economic transformation is properly funded. Thank you very much, and Aaron. If we want to deliver the 110,000 home target over the next 10 years, we need to act now, so it needs to be around investment in affordable housing and the associated benchmarks increasing in line with costs. I would suggest that the Government is persuading to drop its current proposals on a national care service and the monies that they would then be saying would be invested directly into improving care, including specifically introducing the sectoral bargaining, which would address the issues within the care workforce to improve the situation for them. An alcohol-horm prevention levy on retailers to recue the additional profits from minimum unit price would only require secondary legislation, which is very quick and easy to implement. Any measures that get cash into people's pockets, so whether that is direct cash support to people or services like ours that support income maximisation? Thank you very much. That is very clear also. I am going to wind up this session now, and I want to thank everyone for their very helpful contributions, which of course we will put into a report. We will certainly be questioning the Deputy First Minister, but he is also a finance secretary, of course, on these when he comes before us. I am now going to call a break until 11.30 when we will go into private session.