 Good morning and welcome to the 11th meeting in 2024 of the Finance and Public Administration Committee. The first item on our agenda today is to take evidence from the minister for community wealth and public finance on the aggregates tax and devolved taxes administration. Scotland Bill, I would like to welcome the minister to today's meeting and also give apologies for Ross Greer, who has had to attend another committee this morning. The minister is joined today by Scottish Government officials, Jonathan Waite, aggregates tax bill team leader, Robert Souter, senior tax policy adviser and Ninian Christie, lawyer Scottish Government legal directorate. I welcome you all to the meeting and invite the minister to make a short opening statement. Good morning, convener and good morning to the committee. As the committee will be aware, the 2014 Smith commission included a recommendation, which was agreed by all parties, to devolve powers related to the commercial exploitation of aggregates in Scotland to this Parliament. That was then provided for in the Scotland Act 2016. This bill uses those Scotland Act provisions to set out the key elements of a Scottish aggregates tax. In addition, the provisions in part two of the bill are intended to support the efficient and effective collection of all devolved taxis by Revenue Scotland. The development of this bill has been informed by partnership working between Scottish Government and Revenue Scotland and extensive stakeholder engagement. In addition to a consultation, which ran from September to December 2022, proposals have been informed by meetings of an expert advisory group. I would like to thank all those organisations who have and continue to support the development of the legislation and preparations for the operation of the tax in the future. Scottish Government officials, along with representatives of Revenue Scotland, have visited a number of different quarries, other aggregate producers and businesses focused on the production of recycled materials. I have also visited primary and recycled aggregates businesses, seeing first-hand how they are supporting Scotland's economic and net zero priorities. Overall, the bill provisions set out a Scottish aggregates tax that will broadly align with the UK aggregates levy. That provides for a responsible and proportionate approach to the transfer of powers. It takes into account both the views that I have heard through the consultation process and the limited data available regarding the operation of the UK aggregates levy in Scotland. As you may be aware, there is, for example, no Scottish specific data held by HMRC regarding the volume of taxable material in Scotland or on the volume of materials that moves throughout the UK. We are thus reliant on survey data and estimates based on production shares. There are, however, some important areas of distinction in this bill, with specific legislation to address compliance concerns relating to unregistered quarries and Revenue Scotland's ability to take a more tailored approach to tax administration and compliance. In addition, the bill will provide scope for the Scottish Government to take a more distinctive approach to the tax in future, one based on operational experience and an improved evidence base. The bill is focused on the establishment and operation of the Scottish aggregates tax. As was the case for previous tax bills, it does not set out a specific tax rate. I appreciate that the committee has a strong interest in what any future tax rate might be. However, the proposed introduction date is two years away and decisions on any tax rate should be set out as part of the Scottish budget process. We have, however, worked collaboratively to develop this legislation, and I want to do the same in relation with the tax rate. I will therefore work closely with stakeholders to inform the setting of the tax rate. Without wishing to pre-empt that process, stability and continuity will, of course, be important considerations as we initially devolve this tax. Moving on to part 2 of the bill, the proposals are all intended to support the effective and efficient administration of tax by Revenue Scotland. Although I recognise that there was no formal consultation on part 2 and appreciate the concerns raised by stakeholders, the proposals are fully supported by Revenue Scotland and reflect detailed engagement with the tax authority. I note that the committee heard recently and directly from representatives of Revenue Scotland about the benefits of the provisions and how they might be exercised. The proposals include either minor changes, create consistency with powers already applying in Scotland to UK taxes, or will be subject to full consultation prior to bringing forward any regulations. Closing, the bill seeks to deliver on cross-party agreement to devolve further tax-raising powers to the Scottish Parliament. It takes account of extensive stakeholder engagement as an intended to support the efficient and effective collection of all-devolved taxes by Revenue Scotland. I very much welcome the committee's scrutiny of the bill and I look forward to our deliberations this morning. Okay, thank you very much for that helpful opening statement. I have actually scribbled down quite a few things to ask from that statement. I just hope that we can read my own writing when I try to ask you the questions. I think that the first thing that I will ask is about the consultation on part 2 of the bill. Why didn't the Scottish Government consult on that? Does that obviously cause some irritation among our witnesses in the last week's Law Society of Scotland, the Chartered Institute of Taxation and the Institute of Chartered Accounts in Scotland? I recognise those points. The point that we have set forward is that, given the nature of those changes, they are either being minor or consistent with the way in which UK taxis are currently operating in Scotland or, for that matter, the fact that they would be subject to regulations means that, in terms of where it is potentially, I am conscious of the committee's interests in particular the provision around automation, there will be that opportunity for detailed engagement in consultation with regard to bringing regulations forward, but I would also note, as well, that the opportunities that we have to bring forward primary legislation on tax are infrequent. As such, when an opportunity does arise, it is important that we respond constructively to suggestions that are brought forward by Revenue Scotland. I am conscious of raising that point. I have inevitably precipitated questions on a finance bill, which I will be more than happy to respond to, should the committee wish to ask. I was going to ask that at the end, but, as soon as you have given me a nudge and a wink to ask at the end, I suppose I may as well. The witnesses last week called for a finance bill—indeed, Liz, myself and others in this committee have called for that over a number of years—because it is a system that would give an opportunity to make changes across the areas in which we have responsibility. The Government is working on six new taxes, as you know. It would be a lot easier to locate where provisions are. It would also provide a timetable for people to feed into the process to make representations about what could be influenced in that year's financial finance bill. It seems a fairly logical step forward to myself and, I believe, to other committee members. I am conscious that we discussed that recently on another committee item a few weeks ago. There are strong and clear arguments that have been deployed in favour of the principle of an annual finance bill. I note the points that have been raised by witnesses around the committee on helping to make the system more user-friendly and bringing things together, allowing for increased scrutiny through primary legislation as opposed to secondary legislation. I think that there is a range of strong arguments that have been made. Our position is that we are not opposed to that principle, but what I would say is that it is a significant undertaking for Parliament as well. It would be established that the budget processes that we have have been developed, to some extent, in partnership with Parliament through the budget process review work in the previous session, the joint agreement with the committee. If we were to move, it would probably present quite a fundamental change. I do not state opposition to that principle, but I think that we would need to do a lot more work in terms of jointly with Parliament. I would prefer the committee to determine its own remit, but I imagine that the committee would have a keen central role to play in that work. However, if we were to move to that particular system, that is quite a significant change to how things operate currently, depending on what the scope of that finance bill would be. I touched on some of the ideas that have been suggested by stakeholders. It would have to be, to some extent, a joint undertaking. I would reiterate the point that I have made previously. If there is a desire to explore this in more detail and to establish what it could look like, there is a willingness on my part on that of the officials to have those discussions, but it is not something that the Government can just take forward on its own because it is quite a significant change. As the committee appreciates, whether it is in agreements with Parliament or reflective of its standing orders, we are to establish budget processes. It is important that Parliament has a key role in engaging on what any change that that would look like. If there is a willingness on the committee to start engaging on that work, I am more than happy to pick that up. I am sure that there is, and I am sure that colleagues will pick that up. Let us go back to the crazy, wild world of aggregates and the legislation that is sitting in front of us just now. You have said in your statement that you have talked about broadly a line with UK aggregate levy and limited data on Scottish aggregates. Although we were told that it is about 5.5 million tonnes of ship south of the border and that it is only about 16,000 north, which is obviously an issue if the aggregates tax, if that means that the tax that is currently in effect comes to Scotland, is lost to Scotland, perhaps about £10 million a year. I am just wondering if you can comment on that. We are looking at a bill that is going to cost over £4 million to set up about £915,000 a year to run according to the financial memorandum. The kind of nudge in a wink that you are giving is that although it is up to future budgets to set aggregates levy, it looks like it is going to be exactly the same at the pennies where it is south of the border at the present. Just to avoid any doubt, I am not pre-empting the budget, and I am certainly not seeking to pre-empt the 26-27 budget, which the Parliament agrees to this legislation when we would anticipate this tax going live. The points that I speak to around continuity and certainty are really just a reflection of this being EU power, but recognising the limitations that we have with regards to data. If I were to suggest something to the contrary, there may be questions raised. Is that a responsible and proportionate approach? Should we not wait until we have more data and a greater understanding to inform? Hold on a second. This bill is already a year later than was intended, so what efforts have been made to secure that data over the last year and before that? In fact, is that a primary objective? In 2020, we have jointly with the UK and Welsh Government commissioned a survey of production and movements of aggregate for 2023, which should be available in 2025. However, in terms of the actual specific tax data that will come from the tax going live and being administered by Revenue Scotland, that will give us the opportunity and give Parliament the opportunity to consider any propositions and to interrogate any propositions around what the rate should be. I cannot pre-empt what decisions will be taken by Government for the budget where this tax goes live, subject to Parliament's agreement to the legislation. The point that I want to acknowledge is, and to provide that reassurance, is that we are conscious that one of the issues and challenges that we will have to address, and it is just a case of time, is that building up that evidence space and that data and indeed the approach that we have taken with regard to introducing the legislation and indeed the time that we are taking in terms of when we would anticipate it going live, is to provide as much reassurance and, crucially, to provide as much opportunity for engagement with industry as possible. That is to make sure that we are absolutely consistent with the approach that is set out in a framework for tax and, crucially, the new deal for business as well. Having that level of engagement with those who are operating in this sector and giving them the opportunity to bring their expertise to bear so that we can seek to minimise any risk and allow for the smooth, stable transition of this power to the Scottish Parliament and then, of course, future Governments will go forward and have the opportunity and, particularly, as more data becomes available for the longer the tax is online to take different decisions. However, the crucial thing that I want to provide at this stage in terms of regard to the bill is to ensure that we have the appropriate legislative framework for the operation of the tax and to provide that stability, that continuity and that proportionate, safe transfer of powers. OK, well, let's say that the bill will support the Scottish Government's ambitions for a circular economy through, and I quote, encouraging the minimum necessary exploitation of primary aggregates, maximising the use of secondary and recycled aggregates, and incentivising innovation and development of alternative materials. Obviously, when a world where the climate is changing rapidly and the world is moving forward very quickly, you are talking about a fairly modest bill that will not be implemented for a couple of years. So, what is going to be done to fulfil those ambitions? I am not really seeing anything. I am hearing a lot of people talk about stability and continuity. We are talking about a couple of quid, a tonne tax on rock coming out of the ground. I am not really seeing this incredibly complicated picture that you seem to be portraying, Minister. Surely, it is pretty straightforward. The Scottish Government is not setting out what it would like to see. I know that you are saying that we cannot pre-empt taxes a couple of years ahead, but the tax has been £2 a tonne for 15 years. Where is the incentive for people to invest in multi-million-pound recycling plant? We were at a residual facility where we invested £4 million and they have another facility, £2.5 million, and others who want to recycle to avoid the £700,000 on any landfill last year of soil can be reduced. So, what is being done to do that? It looks as if it is going to be a landfill tax that will mirror the UK for the last 10 years from now. Is that likely to be the situation? I know that you cannot predict the future, but the way of travel from what I am hearing is caution and stability. Is that exactly that? The point about wanting stability and confidence is a direct response to what we have been told by industry and having that engagement. We set out the rationale for the approach that we have taken with the tax with regard to that broad alignment with what the UK has had in place. You touched on the rate being the same for the past 15 years on the UK aggregate levy. Actually, one element that contributes to part of the challenges around data is that we do not have that history of changes in the aggregate levy to be able to assess what the response has been to that and whether there has been any changes as a consequence of the rate of the levy moving. As you highlight, the changes that are now coming forward are relatively modest in scope. The second point that I want to make is that this is just one tool among many. Once a fiscal lever is an important one, it is an increase in the number of fully devolved taxis that will have our disposal. There will be that opportunity as we accrue more data to consider how it can be used in relation to other devolved taxis. Of course, it sits within a much broader policy area where there is a range of other regulatory interventions and policy approaches that it can be taken. I think that it has been important in considering what change can be affected via the use of the Scottish aggregate tax is not to simply consider it in isolation, but to provide that opportunity for it to engage with decisions around the aggregate levy to be taken in the broader context of the range of other powers that are available. For example, in pursuing circular economy objectives, the key thing that I am keen to stress at this stage in consideration of the bill is to ensure that we are taking on board the concerns and the views and the input of those who are ultimately involved in this sector and are most directly impacted by currently the UK aggregates levy. What is the cost of shipping a tonne of aggregates per mile by truck, for example? I cannot speak to the specific cost of by truck, but there can be other ways of transport, for example by sea and by rail. I appreciate that. How much by rail or ship? If we are talking about the difference between Scotland and England, I ask that in a private briefing where officials could not get an answer. What the elasticity of demand is has been worked on for a couple of years, and I thought that you would be able to have a pretty straightforward answer to that. If you put the tax up for £2 to £3, does that mean that you do not sell any aggregate in England, or is it a 10 per cent reduction, or does it have no effect whatsoever? Similarly, if you reduce it by £1, because clearly the financial memorandum, despite all the talk about moving towards a Scotland that is more circularity, looks as if over the next five years there will be no change whatsoever in the estimated tax rate. I appreciate that that might be part of the lack of data that he talked about, but it looks as if there is no ambition to either increase or reduce the tax by trying to move people, for example, into greater recycling. Of course, the industry is going to sit where it is at the moment, because vested interest always opposes change, does it not? Well, the consideration here is around the administration of the actual tax. The tax rate, of course, will be set as part of the budget, and it will take into account a broader range of circumstances at that time, not least what the prevailing economic climate will be, but you touch upon understanding what the impact of the tax is in behaviour, and that is why I made a remark, picked up in your point about the rate being the same for the last 15 years. That creates challenges around data, and there are the existing challenges that we have around data, not having, if you pardon the pun, disaggregated Scottish data and more information around community movements, and that is why I have made reference to the fact that we have jointly commissioned a survey with the UK and Welsh Governments reflecting the situation as of last year, data of which will be available in 2025. The final point that I would make is that I can appreciate the frustration about not being having more information available, but that speaks to the point of why we are taking this prudent approach that we are with this legislation, recognising that having that degree of alignment and continuity in terms of the overall structured administration of the tax is what business is familiar with, but having that flexibility within the legislation on, for example, setting of rates and other arrangements to take a more distinctive Scottish approach in the future, but doing so in a way that is consistent with a framework for tax principles, which is making sure that we have a fully developed evidence space and understanding of what the potential behavioural responses of any tax change could be. I take the word prudent as being inertia. If I am a company who is invested millions of pounds in buying in or innovating with regard to the latest technology to process and recycle, believing that the Scottish Government is going to move forward to a circular economy, I am not seeing any evidence of that. What I am seeing evidence of is that there is a bureaucratic change whereby a tax has been devolved without any seeming ambition to make it any different from what there is in the rest of the UK. Then there will be a wrestle with the UK over the impact on a block grant and what it means for Scotland. It seems to me to be completely underwhelming. There is a Bria, which says that it was undertaking to introduce a replacement tax that it made that it retains a fundamental structure of the UK aggregate. It is levy well being tailored to Scotland's needs. I am just now seeing anything that is tailored to Scotland's needs so far. Who was on this Bria? Who undertook this Bria? The Bria was published at the time that the bill was introduced. It undertake the work of course taken forward by Government officials. I want to come back to the fact that the bill reflects cross-party agreement in the Smith commission and the cross-party support for the Scotland Act 2016 that the UK, with provisions around the UK aggregates level and attacks on the commercial exploitation of aggregates, should be devolved to the Scottish Parliament. The committee is familiar with the reasons of why this has been one of the last elements of that act to be taken forward. However, the key point that I would come back to is that there is a flexibility within the legislation to take quite a distinctive Scottish approach. I am not in the position to say two years out or almost two years out from when decisions will be taken about that to start stating what that should be. As I say, this is a bill that is not even going through its stage one debate as of yet. My key focus has been to ensure that there is a clear rationale for the approach that we are taking with regards to the administration. That rationale is about ensuring that we have that broad consistency and stability at the point of the tax being devolved, but ensuring that we have that flexibility to take a distinctive Scottish approach going forward, reflecting the policy objectives of the Government of the day, which we would assume would reflect the distinctive aspects of the Scottish economy. I agree with you that ambition is crucial. It is necessary, but it is not sufficient data and informed policy making that is necessary, too. The challenge that we have, as the committee has heard from our witnesses, is that we do not have the level of data on the way in which the UK aggregates levy operates, so we have an opportunity to address that. We are, of course— Telling you? Why do you not have that literally? You asked him, and he must be able to have some information on that within a margin of 5 per cent to 10 per cent. We will engage in the structure of the HMRC, but I do not know Jonathan in terms of the engagement that we have had. I do not understand why you do not have that information. One of the challenges is with the tax return. At the moment, the tax return at the UK level is very limited. For example, if you are a company that has sites all across the UK, you submit one tax return, so we do not have that disaggregated Scottish information. If I have a company and I have a branch in Manchester and one in Belfast and one in Glasgow, no, their output is in their cost base and profit and all the rest of it, I am really struggling to understand this lack of data stuff. We are talking about millions of tonnes of rock, how difficult it is if you can hide it. Apparently, you cannot hide it because there are loads of quarries that are unregistered. We try to address that through the survey that the minister referenced. Obviously, with a survey, you cannot compel people to respond, so it is optional. We have a partial picture of the flows in Scotland and where aggregate moves from primary aggregate sales and quantities of reserves. Obviously, because of the survey, that is only a partial picture. At the moment, when the tax becomes operational, all taxpayers will have to submit tax returns to Revenue Scotland, so we will have that complete picture and a more detailed picture of the aggregates industry in Scotland. You talked about the Smith commission and about it. The committee has already said that we do not support the assignment of VAT because it provides no advantage whatsoever to Scotland, and we are bureaucratic mismatch trying to establish it. It is not just about devolving for the sake of devolving. There has to be some advantages. One of the advantages would be, for example, what SIPA has suggested during the use of secondary recycle aggregates in Scotland as part of a shift towards a more circular economy. However, if you are not doing anything different, it seems to me that you are saying that maybe one day in the future, at some time in the far distant future, there might be £2.5 pence as opposed to £2.3 pence. It is going to be for April—I am sorry for being sarcastic—but it is just underwhelming to put it mildly the Government's upper cautious approach to this particular issue. I will just move on. There is a distinction between the rate of tax and the administration. That is the key point that I am wanting to be clear. When I speak around a cautious, prudent approach, I am talking about what I am dealing with directly in front of me, which is legislation. I have set out, of course, and I think that everyone would expect—and certainly at this committee, I am sure, Parliament and industry—that we will engage closely ahead of the setting of the tax. However, I have to be a candidate for the reasons that have been set out. We do not have the full range of data that we will have as this tax embeds in. Of course, that is distinct. That will be a fully devolved tax administered by Revenue Scotland, with rates determined and legislated for by this Parliament. Of course, the committee appreciates that that assignment was not the devolution of a new power. That is distinct in that regard. The approach that I am taking is around the administration of the tax. I recognise the key interests in what the rate will be, but I do not think that the committee would expect me to set out what the range of other devolved tax rates or income tax rates will be at the next budget, let alone in two years' time. With regard to that particular tax, we will continue to engage. The position that we do set out with regard to what the rate will be is one that reflects the engagement that we have had and will set out a clear rationale at that time. I would not want my remarks to be misconstrued as I suggest, but it is a predetermined course of no change. The point that I want to make clear is that the approach that we will take as we have taken with this bill is one that is informed by close engagement, consistent with the principles and the framework for tax and a new deal for business. It is just that we have seen that the landfill tax has been no change, no differential from the UK whatsoever, even in the net waste, for example, where there is perhaps more room in the manoeuvre. I will move on, because colleagues are wanting to come in, just a couple more questions. One is on compliance. You have said that you will take a more distinctive approach in Scotland to compliance now. What do you mean by that? I will ask Jonathan Finch to come in a moment, just in terms of what we have done in the legislation. One of the points that I would note is in the evidence that you received last week from Revenue Scotland. Given the way in which it has set out how it will approach the tax with the level of engagement that it will undertake and the level of attention and focus that it will be able to bring to the tax as it administers authority, I think that that will be a crucial change. It will, I think, evidence one of the key wins and one of the key gains from the devolution of that particular tax. Recognising that, as has been discussed at the committee, is that in the broader context of the suite of UK taxes administered by HMRC, that UK aggregate levy is one of the smaller taxes. In terms of what we have done in the legislation, I will ask Jonathan Finch to come in. I probably cannot add a huge amount in addition to what Revenue Scotland said last week about the principles of how it will approach compliance from an administration perspective. I would maybe just highlight one particular element of the bill, which is distinctive from the UK aggregate levy, which is taking a more tailored approach to the compliance in relation to non-registered sites, which I know has been mentioned by other witnesses as well. There is a provision in the bill that allows Revenue Scotland to essentially tax anyone in the supply chain if a non-registered site is used, with the view there of ensuring that all purchases of aggregate levy is used registered sites. One of the issues that we were talking about earlier on is that it is quite astonished. Despite the fact that it has 32 local authorities who you would think would know exactly what was going on in their areas and could feed into the Scottish Government, there seems to be a bizarre lack of knowledge of just how many unregistered quarries there are in Scotland producing who knows how much aggregate which the taxpayer is missing out on getting a return on. Compliance is really important for that. One of the positive benefits of devolution is that there is a push to ensure that all those quarries are located. If I know that some people say that they can dig up a couple of hundred tonnes for a farmer's backyard and then fill it in later on, a lot of them are much bigger than that. There are really major quarries, from what we have been told. It is bizarre that there does not seem to have been more work done by the UK Government on implementing its own levy in tracing them with HMRC, etc. I hope that the Scottish Government and its agencies will do more on that. What specifically do you plan to undertake to ensure that that situation when ragged people are tax dodging is addressed? It is important what has actually been said by Mr White about the supply chain. How do you catch him in the first place? What is going to be done to catch him in the first place? As a committee, we will appreciate matters around enforcement and administration are properly for Revenue Scotland. That is issues around compliance, so Revenue Scotland will appreciate and have set out in detail to the committee the approach that they would take. In advance of the tax, apologies is what part of the legislation helps Revenue Scotland to deliver that outcome. There was a particular point that Mr White touched on. Certainly, if there are views that the committee has in regards to the need for any additional legislative provisions to provide additional support for Revenue Scotland or if there is anything within the legislation that would inhibit Revenue Scotland from carrying out these duties, we would of course want to be made aware of that. Our position and understanding is that what we have provided for will allow Revenue Scotland to discharge their responsibilities as a tax authority, and that includes issues around compliance as well. I have other questions, but I think that I want to open up to colleagues around the table rather than hold the floor. The first to ask questions will be joined before my list. Thanks very much, convener. I mean, maybe just to start again on the aggregates, some of the points there. When the UK aggregates levy has switched off, we have to pay any costs to HMRC. Can you tell me what the logic of that is? We have to pay for the setting up of our new tax, and we have to pay for the switching off of their old tax. I think that reflects the existing arrangements that have been in place for the previous devolved taxis. We did set out some estimates based on what the costs have been for the previous devolved taxis coming online, but that would entail. Johnathan, is there anything you can add to that about the switching off? The requirement for those costs sits out in relation to the precedent that has been set for other fully devolved taxis as part of the Scotland Act provisions. We have engaged HMRC on that, but they were not able to give us a cost prior to seeing the bill that was introduced to understand what we were proposing. That was why, on the financial memo, we could only provide that range from no costs up to the costs that were applicable to land and buildings transaction tax. However, now that the bill has been introduced, we are continuing to work with HMRC officials to move forward that process and understand as quickly as possible the switch off of us. It is not going to be a huge cost, but I still think that the principle is unfair that we end up paying both the new and the old. Was that raised at all during the fiscal framework discussions last summer? I am not aware specifically that that was the case. I would have to go back and check the record in terms of the Parliament's deliberations and what was discussed with the landfill tax and land and buildings transaction tax as to the question whether that was an issue raised then. I apologise, but I cannot give the historic rationale that was set out, which is set out of the precedent that informs the change here. The convener has asked you extensively about rates and different things. One suggestion that witnesses raised was that the islands and the more rural areas face a different situation. In the central belt, we have a choice, our builders have a choice, do they use the recycled material or the new quarried material? On aniland or near Inverness, they probably do not have the option of recycled. That might suggest that we could have different rates in different parts of Scotland to encourage, for example, a higher rate in Glasgow, because they could use recycling but a lower rate in the western isles because they could not. Is that something that has been considered? I would not rehearse the points that I have been on about the structure of set-out for the tax in terms of its inception. There is certainly the scope for introducing additional rates within the legislation, but we have to operate within the parameters set-out in the Scotland Act 2016. What would be an important consideration for any further changes to the tax, specifically, or any wider considerations around localising taxis, if that is what the member suggests? Those are things that would require very detailed consideration and would have to take into account the considerable risks around added complexity that could arise from that. Rob, you might want to come in on the advisory group. Just to say that this was discussed with the advisory group during the consultation phase for the bill. I think that it would be very complex to decide which areas might have more available recycled material, etc., and that those areas already do pay the existing UK agurates levy, so that is essentially the status quo position. The advisory group is very keen to stress the complexity of doing something like that. Have there been any discussions with the UK Government about raising the whole UK level at the rate of £2 that has been there for so long, so that the whole of the UK, including Scotland, could do more recycling? I have not had any direct conversation with the UK Government on that matter, but I am conscious that that is something that has been raised at committee and suggestions that, with the aggregate tax in Scotland going live, that there should be direct engagement for the UK Government in those areas. Of course, the broader situation within the UK and decisions that the UK Government takes will be one of many factors that will help to inform the consideration around raise setting when Government and Parliament come to set the rate for the aggregate tax. SIPA has been mentioned briefly. It is very involved, as I understand it, with landfill tax and I know from my own experience and my own constituency that that is the case. It appears that SIPA does not have a formal role in this bill. Can you say why that would be or if it is not necessary? SIPA does not have quite the same role in regulating the quarrying sector as it does for the landfill sector. It regulates landfills directly, so it will have to register with SIPA for a licence. SIPA may have some interaction with quarries to the extent that it produces waste and has to have various permits, but there is not quite the same kind of match of roles that the bill provides for Brevy Scotland to ask the Scottish Government to allow delegate functions to an organisation like SIPA in the future, if it can have experience of administering the tax, determine if that is necessary or if it can identify another body, part of SIPA, who might be useful to delegate powers to bacon. We can do that as well. There is not quite the same direct correlation in their roles. I do understand that, although it seems to me that it might be the same people who are illegally quarrying, who are illegally taking landfills, but presumably SIPA could pass that information on even if it is not required of them? Yes, absolutely. I understand why Brevy Scotland would still be working to work with SIPA, information share with SIPA, the police, local authorities and this kind of range of people who might have knowledge of those type of things, which they can do even if they do not have directly delegated powers. Moving on to part 2 of the bill, as the convener has already raised the point, there was not any consultation. If we take some of the particular issues, automation, this committee has previously had evidence when we look to AI and the things that there are risks with automation that individuals can get lost out. They might get a big panel, a minor infringement, but the system just sends them out a huge penalty or something like that, which might not happen if there was human intervention or human checks. Can you say anything about what the plans are for automation and can you assure us that there would still be a good level of human oversight? Certainly, of course, this would be subject to regulations of which there would be full public and stakeholder consultation on an opportunity for parliamentary scrutiny. If I remember, I think it may have been yourself, Mr Mason, who raised the example of a penny difference in council tax and an automated reminder notice going out and it is seeming somewhat disproportionate. I am conscious of the response that you received from Revenue Scotland with regards to that that they would want to ensure that their processes with regard to automation would be proportionate and balanced. Again, not to pre-empt the regulations or deed to what work Revenue Scotland as a NMO would want to take forward, I think that we will be looking for areas that are less concerned with areas where human judgment is required and more automating routine tasks, which, of course, allows staff capacity to be freed up and deployed in other areas, but I would want to provide you with the reassurance with that full opportunity for consultation, engagement on the regulations and parliamentary scrutiny. On that point, you have said once or twice, which is good, that there is going to be consultation before any regulations. I do not think that it actually says that in the bill, does it? That there must be consultation. That is certainly a commitment. If there is anything that the committee would like in terms of additional assurance in that matter, I am happy to consider that. I cannot remember exactly which witness, but I think that one of the witnesses raised the point that they did not see that written down in the bill, but you have made a strong commitment today, so that is helpful. The law society talked about further amendments that are not already in, and I am assuming that maybe your officials have followed that up. Some of it becomes quite technical, but in the area of LBTT group relief and Scottish share pledges that they had hoped to see in amendment, I think that the Government had said in the past that they would legislate in that area, so I was just wondering if that is something that you considered or if it could be in the bill or whatever. Yes, it is something that has been brought to our attention and I would say is under consideration at the moment and of course we will update the committee in due course, but I am aware of the specific requests and indeed the previous commitments that have been made in that area. When you say under consideration, does that mean that it could come in at stage 2? I think that one or two of the witnesses raised the point that there seems to be a lack of awareness of Scottish taxes now. Obviously, Scottish taxes vary quite a lot. Is the Government applying to do more specifically on aggregates tax but more generally about raising awareness of Scottish taxes, including I suppose landfill tax and so on? I am certainly wanting to do all that I can to raise awareness of the tax system in Scotland, but I appreciate the exchanges on the previous session of the committee and recognise it. For many people, they will only engage with the tax system when it bites upon them. It is like a lot of areas of regulation and policy. It is a bit like gravity. We do not really notice it until we have a stumble or for some other reason it reminds us of it. I want to do what we can to increase awareness of the Scottish tax system. It is understandable that, for many reasons, when people do not have a requirement to engage with it in their day-to-day lives, of course it is not a priority. We are touched before on broader issues around transparency and the information that is provided. What I want to do is ensuring that, in terms of how we as a Government communicate around tax that we do so in a way that is as clear and as transparent as possible, recognising that there is always a balance, not providing enough detail on pursuing simplicity can mean that information is not fully understood. Providing too much detail can create complexity and some of the salient points can be lost. On a broader question, I am always happy to engage with the committee. We have done various bits of work in terms of social media and various audio and visual packages and so on that have been shared to highlight how the tax system operates in Scotland. Of course, on a tax like this, as Revenue Scotland touched on, it will be doing a lot of work around engagement with the sector prior to the tax coming live. That is something that is reflected in the work that Revenue Scotland does routinely, even when there are changes to tax. We touched upon this at a session earlier in a year on changes to LBTT and touched upon the work that Revenue Scotland is doing in engaging with stakeholders and recognising that, often, we are quite specialist engagement with those who are actively involved professionally in the administration and providing advice on those taxes. There is a work that Revenue Scotland does for doing an excellent job. Any suggestions about how the Government can more effectively communicate changes around taxes and to help to increase public understanding of the tax landscape across the UK and how it applies to Scotland between devolved reserve and local? That is a conversation that I am always up for having. I will come to the issue of the finance bill. I will not be surprised in a minute, but I will follow up on the convener's question about the issue of data. What is the reason why HMRC currently with the UK living is unable to tell us how much of that money is apportioned to Scotland? What is the problem there? On that specific point, I cannot speak on behalf of HMRC. I appreciate earlier that Johnathan tried to set out our understanding of what the issue would be for HMRC. We engage, but ultimately, in terms of how the UK aggregate slave is a UK tax administered by HMRC, set by the UK Government. In terms of how that tax is administered and the requirements on the body charge of administering it, it is not something that, of course, we have any executive competence. You mentioned that there are estimates in studies that you have carried out to try to get to some accurate assessment of that. I am struggling to know why HMRC should not be able to provide that information themselves. I appreciate that you cannot answer that question, but it is not helpful that we do not have that data. If the devolved tax is to work well, you itemise the issues of fairness and simplicity. I completely understand that, but the other issue is about the income that will be generated as a result. If that income in any way was to be under what is already being taken in from the UK levy, that is an issue. We cannot make that judgment until we know what HMRC is currently doing. Do you accept that that is an issue? I recognise the challenges that we have with data and what they mean for being able to make assessments and forecasts. Of course, questions around the revenue that will be raised and how that will be compared to a counterfactual where the UK aggregate levy was maintained UK-wide. It is dependent upon a number of factors from economic conditions, a block grant and judgment process, and decisions taken around the UK aggregate levy. We are all familiar with that through the BGA process. In terms of what the actual scenarios could be, they will ultimately be a reflection of policy changes and broader economic factors, but I completely accept the point. I have sought technologists from the outset that the limitations that we currently have around data, which can be remedied with this tax coming online, present challenges around being able to fully assess what the impacts may be of particular policy choices. That, to an extent, underlines the approach that is set out. Where is the situation to be that we had a full suite of data? We could say exactly what the scenario had been in each of a lot of x last number of years. It would perhaps facilitate a somewhat different conversation, but we have to operate and we have to work with them where we are at the moment and what we have available and set out the work that has been undertaken to help address those data gaps. A gap does not help us to work out elasticities of demand, as the convener rightly pointed out. In 2016, all parties agreed about the devolution of the tax. I am not arguing about that point at all. I am arguing that, to make people feel really comfortable, it would be helpful if we had more complete data to be able to analyse the likely behavioural change in the elasticities of demand that will follow from that. It is very difficult if we do not have the information from HMRC in that manner, so we can make a comparison. That is the point that I would make quite strongly. With your engagement with the UK Government, that is perhaps something that should be mentioned. Let me come back to the issue of the finance bill. You are quite right to say that this is not a matter for the Scottish Government to make a decision on. Do you, however, think that when it comes to the next session of Parliament and the likely parliamentary reform of some sort, of course that depends on the make-up of the Parliament and on the new Presiding Officer, do you think that the Government would be in agreement that this is an issue that could constitute part of the reform of this Parliament? I would not want to speak on behalf of the whole Government and broader issues of parliamentary reform, not least because of recognising the independence of Parliament in these matters, but certainly with regard to my portfolio responsibilities around devolved taxation and the work that I do supporting the Deputy First Minister on the budget process, I am very happy to engage to explore whatever can be consensus. I think that if there is broader consideration around parliamentary reform, I appreciate that, that might be something that Parliament wishes to provide as a broader context for consideration around these issues, recognising the work that was undertaken and led on by the predecessor committee in the last session of Parliament in this area. As I said, there are clear arguments for it. There will be other arguments that people would perhaps want to address against such an approach and that is an opportunity to go and have that discussion. Given the interest and given what has been expressed by members of this committee and stakeholders, I am very happy that we would be keen to engage. It is really just a stress and reiterate point that the approach that we have around the budget process is something that has been arrived at jointly with Parliament. I do not want to risk saying anything that would be contrary to that particular spirit. Minister, I do accept that you cannot speak on behalf of the Government about initially, and you are quite right to say that it is a parliamentary matter in any case. I think that on the back of the concerns that this committee has through Audit Scotland talking about the lack of sufficient transparency when it comes to the public finances and also on the back of the feeling problem that we have about the difficulties of making OBR and SFC forecasts come together. The main argument that I can see for a finance bill is to try to provide greater clarity in the way that the convener described, where it makes it much easier to see what the tax and spend would be. That is quite important. That is something that this Parliament is lacking just now. I am personally very in favour of that, and I think that other colleagues across the political spectrum are too. You mentioned that you think that there are arguments against it. What do you think those arguments against having a finance bill would be? Well, I think that the arguments against it—I am not advancing them on behalf of the Government just as it is saying—in recognition may reflect that we have an existing system where tax changes are brought forward through secondary legislation. We have occasional primary legislation on tax, such as we are considering this morning, which will afford opportunities for wider reforms. I recognise the criticisms of that approach as well. What I would want to do is to ensure that in considering any changes, we fully understand what the full range of views are. However, as I have said, I am sympathetic to the position that has been put forward. Something that I would add, and I appreciate that this is not something that we have any direct control over, but I think that the point that I made before would enhance our overall ability to scrutinise public finances in Scotland. If there was an approach taken by the UK Government and reflect to its budget-setting process, we would not rehearsal the arguments that we have been through before. There may be an opportunity for how Parliament wishes to consider those matters. First and foremost, it is about holding the Government to account and scrutinising the position that the Scottish Government does in the Parliament's processes. However, it is also about the wider UK fiscal framework on who the UK Government operates. I think that that is something that we would—it would certainly assist the Government, but it would, I think, be a bit of use to the Parliament. I appreciate that it is not something that we have direct control over, and certainly on issues of fiscal transparency and engagement with Parliament around what any finance bill would look like or process would look like. It is a conversation and discussion that I am more than happy to have. It is something that the committee wants to do a bit of work on. I and my officials have been more than happy to engage in that. That is very helpful. In this Parliament, I think that there has been growing calls for a finance bill. Just as Mr Mason rightly highlighted, the public does not really understand with a particularly high-degree transparency what is going on sometimes with the public finances. I think that anything that we can do to try to improve that process is welcome. I have certainly heard colleagues on all sides of the chamber suggesting that it is something that would enhance the Parliament. That is a debate for another time, perhaps, but I thank you for your comments, anyway. I am maeil to be followed by Michelle. Thanks, convener. Minister, in your earlier answers, you were keen to draw the distinction between the rate of tax and administration in your answers to the convener, but the policy intent behind the bill is to support Scottish Government's circular economy objectives. However, in the legislation, as it is set out, is the only mechanism to pursue that not the rate? Clearly, the application of the tax supports that in terms of what we originally intent of UK aggregates levy was going back to, I think, 2002. There was the UK Government review of it 2019, I think, it published 2020. I think that that confirmed in terms of what the policy intent was being realised through the levy. The tax, as itself, supports that policy position, which is consistent with the intent and what has been achieved by the UK aggregates levy. Of course, the rate can be an element of influencing the degree to which it is seeking to. The rate itself is clearly a specific component. I am trying to make an apology for the lack of clarity. The tax in and of itself supports that. Of course, the degree to which the tax supports that policy objective will be a reflection of the rate and, of course, the behavioural response to the rate. Those objectives are your own. It is around the Scottish Government's circular economy objectives, which are broad and far-reaching, obviously. I suppose that the frustration perhaps, in some of the earlier questions, is that we do not really see other than the rate, which is not on the face of the bill, how that might be achieved. Did you consider anything else in the development of the bill as to what other mechanisms might be introduced to help you to pursue those objectives? We are operating within the parameters of what is in the 2016 act, which is around the commercial exploitation of aggregates and conscious questions that were raised at the committee. Was there another point of charge? We have to operate within those parameters. That creates a limitation, but that is what the consensus was. That is what the agreement was, and that is what we have to work with. In terms of different approaches, as we have set out and went into some detail earlier, the rationale behind the approach in terms of that broader alignment with the existing UK aggregate sleavy is because it reflects what business is familiar with. It is also recognised that to get to the point of the current UK scheme has not been a straightforward process, as I appreciate the committee will understand. That is being our starting point. That is a better way to put it. The bill represents a starting point, and it is a starting point where broad consensus is from industry. The bill is not an end point. In terms of what happens and how this power is used and develops, it will, of course, be for Governments in the future to determine. It seems that one of the significant limitations on the ability to do more recycling is that there is enough of the feed stock out there in terms of the amount of demolition that is on-going. The other one is about capital investment, significant amounts of money that companies have to spend to buy the machinery or build the machinery to make the recycling happen. Do you consider any possibility of tax credits in the system to support that kind of capital investment? Again, with regards to the flexibilities that are afforded to us by the legislation, by the Scotland Act of Terms and Extent, what we can do. Robert, is there anything that came up during the deliberations of the advisory group on these particular areas? Yes. Through the advisory group, we did explore the key provisions, the exemptions, if there is anything different that could be done. There was no consensus position on the voluntary satisfaction with the existing arrangements. There was discussion of the possibility of credits, etc. However, as people who produce purely recycled aggregate do not pay the tax, there was not a mechanism for that available to the bill. There is part of the structural economy objectives. There is a consultation on the waste route map, which has broader sustainable construction measures within them. Is there not a mechanism to give credit to recyclers within the bill? It is primary legislation. I would have thought that I would have taken the minister's point in terms that I was reasonably constrained by the Scotland Act, but within that, for instance, there would be the last residual waste that comes through the recycling process against which a recycling company has to pay the landfill tax at full rate. Given the fact that they have highly processed that material and done everything that they can, their views to take as much out of that as possible, would it not be a view that that could be applied to a tax credit system that would then allow people to invest in the kind of capital infrastructure that would allow them to make that process more efficient and allow it to increase the capacity? To start to touch on the point and to anticipate the point that I was going to make, which is, again, without pre-empting future rates, is the opportunity to consider how this tax would operate in relation to landfill tax and to take a more rounded approach. That reflects the discussion that we had at committee a few weeks ago on landfill tax when the convener was raising those questions directly. As I said at the time of committee, we will write back to the committee on some of the broader considerations that inform the landfill tax approach beyond the long-stated commitment around parity with the UK to avoid waste tourism, but with that particular power coming online, it will afford Governments the opportunity in the future to consider how those two rates could potentially interact with each other. Of course, that is something that would have to be at this point, but careful consideration and consultation with industry, etc. However, there is that broader opportunity to consider how the two potential taxes could complement each other in supporting those circular economy objectives. That takes me on to part 2, section 56 of the bill and the power to offset credits and debits. We received some evidence on that. We have touched on briefly already today. ICAS and the Law Society both have concerns about the lack of safeguards for a situation where there is a dispute between the taxpayer and Revenue Scotland about whether an amount of tax is outstanding. Revenue Scotland has confirmed in writing and in oral evidence that that power would only be used where there is no dispute regarding the amount payable, but it is not explicitly set out in the bill. There is still some concern from those who are charged with either operating the system by our clients. Does the Scottish Government intend to amend at stage 2 to make that explicit? I recognise Revenue Scotland as a highly respected body. It is appropriate for it to have these range of powers available to it with regard to the administration of the tax. However, I am happy to reflect on any specific considerations ahead of stage 2 to the committee raises. Of course, we will read the committee's stage 1 report with interest, as I am sure Revenue Scotland will. If there are specific concerns and there are specific asks around reassurance, I will of course want to have engagement with Revenue Scotland to understand their position on that matter, but it is something that I will reflect on carefully. Is this a power that Revenue Scotland has asked you for? It is a power that Revenue Scotland has highlighted that is available already in Scotland in relation to HMRC powers. For taxes that are not devolved, HMRC can use this power already. The Revenue Scotland has asked for the alignment of powers that are already available to HMRC powers. I know from some of the evidence that you took previously that there was some uncertainty about HMRC's use of this power, but we have been able to follow up with HMRC officials who were able to confirm and they were proposing to meet with ICAS to confirm this as well. A set of power is something that is well established and well used within HMRC, especially for corporate customers. They very much see it as part of how you efficiently run a tax administration system by where there is no dispute offsetting the debits and credits for individual taxpayers. My recollection was that that was recognised in the evidence. I have said that the power of set-off was well established and reasonable, given the no dispute that we have already covered. This is an organisation that currently runs two taxes and is about to run a third, if Parliament agrees. Is it not disproportionate at this point, at this moment in time in particular, to bring in this fairly wide range of power, given the current caveats that I have talked about across those areas? We are putting this in primary legislation. Is there a good reason for that? Should we not be looking at this in more in the round, as Liz Smith suggested, and a broader issue around tax? I understand the point that you are making. I am conscious of the issue that has been raised by stakeholders. What I want to be clear on is that voluntary set-off with consent is already happening in Revenue Scotland. I want to say that we have identified that the introduction of the aggregates tax will increase the number of taxpayers who are active across multiple devolved taxes. A power has been highlighted by Revenue Scotland. It would be consistent with powers that are enjoyed by HMRC. It is something that has been used with consent, and it would allow for that more efficient administration of a tax system. It just feels a little bit like it is something on a shopping list, describing in terms of, we want parity with HMRC around a very limited number of taxes. It does not feel to be a very sensible way. If we can come on as part of that into section 55, which is around automation, we have also received from the Chartered Institute of Taxation concerns that they made a specific comparison to the horizon scandal around that. That would have attracted the attention of the committee, and rightly so. Does the minister want to make some comments in that area? I am conscious, as well, of that committee's broader interest in public service reform. Clearly central to that is automation. We all appreciate that automation provides tremendous opportunities, but also significant risk. I imagine that we all agreed what we want to do is to seize those opportunities, but in a way that does not expose us or minimises the risk that comes with it. With regard to the specific instance here, we would recognise that there is an opportunity for processes to be automated that will improve the efficiency of Revenue Scotland and will enable it to free up staff capacity to take on more complex judgment based activities. That would be a good thing. How can we achieve that and how can we have the assurance that proper consideration has been given to achieving that while avoiding the risks? That is why we are saying that this would be a regulation making power. There would be that consultation and stakeholder engagement as part of that. Of course, that parliamentary scrutiny, but I would want to reassure the committee that, while the Government recognises the huge opportunities that AI provides in terms of more efficient and effective delivery of public services, we recognise that there are concerns around some of the risks that can attend the adoption of AI. It is important that we fully interrogate those risks and do so in a transparent way in that Parliament is fully involved. I can commit that, in terms of the regulations that would be brought forward with regard to those provisions within the legislation for automation and Revenue Scotland, there would be that full opportunity for parliamentary scrutiny on top of the public and stakeholder consultation and engagement. The committee has taken a bit of interest in this area and we have received and have been addressed by different experts in this regard. I wonder whether it feels a little bit like this is the kind of piecemeal approach that people are warning against in this area, that we would be better to have an all-governing AI approach strategy around publication of algorithms, the way that it will be applied in different areas, how those things are tested and that the Government takes a more proactive, overarching approach to this, whether that be in legislation to try and govern the operation of public service in this area. I suppose I am just asking for reflections, minister, that it is not a criticism this early. I think that it is an important area to explore. I think that certainly the Government has its approaches. I would also be conscious of it for the non-ministerial officers, who are directly accountable to Parliament, as such. While part of the Scottish Administration has that Torumene independence and how they operate, we all would, particularly in the case of Revenue Scotland, recognise why that is important. In terms of how NMOs would seek to adopt automation processes, AI et cetera, Parliament has that opportunity to directly scrutinise the work that they are undertaking. In terms of the legislative framework in which they operate, Parliament will of course scrutinise that. We have responded to the points that have been raised with us by Revenue Scotland. In bringing forward the regulations, it will allow us to ensure that we are not inhibiting Revenue Scotland from being able to adopt AI approaches, which will be of the benefit to users of the attack system, and indeed will be of benefit to the overall delivery of public services. I appreciate the point that you are making in this context. It is because it is our regulation making power that some of the points that are being touched on will be more for the actual regulations themselves and to interrogate what is going on. I agree. My issue is that it will be less about the specific operation of the regulation as it applies to different tax rates and how more around it. We can only really interrogate this on a principal level as to how things might be appropriate and where the human checks and balances are in those systems. If we do not do that comprehensively—anyway, it is probably ranging off of the topic—it is probably ranging off of the topic, but thank you. Michelle Tew for by Jamie. Good morning. Thank you for joining us, everybody. Just a point picking up on what Liz Smith was saying earlier about the finance bill in a totally—or a finance bill in a totally—I have listened to what you have said, minister, about the implications and the complexity and so on. Before I start on my substantive questions observation, I would make the benefit of a finance bill to this Parliament would be that it would require all the MSPs to talk about and understand the financing. At the moment, I would gently suggest that this finance committee is viewed with some disdain by some parliamentarians who have no need to worry where money is coming from when I think that we all need to worry about where money is coming from. That is my tuppence worth and I do not necessarily need a response. In terms of my first question, I understand why data is not collected at the moment in terms of company returns because I have completed company returns. I understand why it is not being collected, but I think that HMRC seems to have got off incredibly lightly. I want to drill down a wee bit more in the survey approach so that we know that not all quarries are registered. Therefore, that survey can only have interrogated those quarries that are registered. Can you give me any more data about how many were polled, what the percentage return rate was and what your confidence level of that return is? Just some hard numbers around the data would be helpful, thanks. There are two main sources. There is the Scotch-Agris Mineral Survey, which was last done for the year 2019, which we are repeating again for the year 2023. That survey had almost all the quarry producers of Scotland, I think that it was around 350-400 per cent. The British Geological Survey, which carried out that survey for us, estimated around 69-70 per cent of total aggregate production, was covered by that survey. The British Geological Survey also produced the annual minerals yearbook, which is an annual survey on a more informal basis of many minerals, but among them aggregate in the UK. There, they estimate the overall share of UK production at around 15 per cent, but I do not have details on how many people have responded there. I have not even appreciated that there were third-party surveys that were not being done specifically to gather data, so even within that there is quite a range of different variables. The first survey was commissioned by the Scottish Government and the BGS carried out on its behalf. How confident are you in that figure that you have given? I think that the BGS is obviously experts in the field, probably nobody with a better understanding of the industry, but because it is a survey, there is a degree of uncertainty. Are you confident, somewhat confident, confident, not slightly confident or no confidence at all? I would suggest that I am confident. I would expect that figure to be close, but it would need more position from the actual data that we would get from the tax return. We are not really all that confident at all. Therefore, leading on from that, what risk assessment have you taken? The minister alluded earlier to the complex BGA. We all agree that we would not start from that, but I am keen to understand that the risks that the Scottish Government is cognisant of up front is that there will be a fundamental mismatch in what you think you are going to collect in the end, and you are not actually collecting. Have you done a proper risk assessment of that? Have you discussed that? I should direct that to the minister on yourself, Mr Stewart. Just to say that there are discussions on going with UK officials as to how that uncertainty should be reflected in the baseline for the block grant adjustment. There is no formal risk assessment process, but we are aware of it and it is an issue that we are discussing with the UK Government. In that respect, it does seem somewhat staggering the comment from my colleague John Mason that we are actually paying for this. We are being double charged in effect for—I would not buy a service if I were contracting with a company to provide a service for some of all the data. I would not be happy being HMRC for what, frankly, looks like just a straw in the wind. Is the touchstone a thing that will be better? I will respond to that one. I will not be hasty points with me, Daleil. We are being very clear about the challenges that exist around data. It is not through the—from our end, in terms of the work that we have done, whether it is in the commissioning of service harnessing and seeking to utilise the existing information that is available, we have sought to provide as much of an evidence base as possible, but I have to be very clear with the committee. We do not have all the data. We will not have the level of data and the sort of evidence base that we would ideally like until such times as this tax is operational and we start getting the returns. Of course, Revenue Scotland is a very efficient and effective organisation. As that data starts to come online, we will have that abundance of data and evidence that is required to allow more informed decisions to be taken going forward around the role of the agriest tax within achieving broader policy objectives with regard to circular economy and, specifically, with the sector itself. I accept that. I think that you are where you are. I think that it was yourself that Jonathan made a comment earlier that—oh, treat me, sorry—I just need to—my thing is just dire—I will just act because I wanted to quote and get it accurate. I think that what you said, Jonathan, was that you could tax anybody in the supply chain if unregistered. Am I correct in that, just first of all, before I ask some questions? I do not know from, but you want to pick up. The provision allows for where there is tax of what aggregate that hasn't been purchased from a registered supplier—someone who is registered for aggregate's tax—then, yes, the tax can be charged at any point of commercial exploitation, which occurs. Just so that I understand within the bill where does that fit at the moment and where is the flexing of testing that from a legal competence basis? That is set out in the definitions of what counts as commercial exploitation. We are expecting any issues, so there should be any challenge where the bill is able to define what counts as commercial exploitation. I think that it is in line with the approach that has been taken to other taxes, where they are trying to minimise—like landfill tax—illegal behaviour and ensure that illegal behaviour is made to pay on the same basis as registered producers do. I understand why you might do it, but I am just thinking that it is a wise approach to go into it without having fleshed it out, that there will not be any implications of that. If somebody is going to be taxed as part of the supply chain, surely there is a situation in which they might object and open a dispute, in which case, as we heard from Michael Marra, it is confirmed that Revenue Scotland is only going to be able to offset where there is no dispute. I am just interested in how the detail of how that is going to work. We would expect Revenue Scotland to set out detailed guidance for the operation of all aspects of the tax, including that. I think that we would expect that both producers should already be purchasing aggregate from a registered supplier, so the ideal position would be that there would be no additional burden. Of course, we do not know that because we know that there are a significant percentage of unregistered suppliers. That is another unknown as well, so I do not know whether we can necessarily make that. There is a small cohort of customers, for example if he focused on local authorities and construction companies. We in Revenue Scotland are in the process of taking a target approach to make those purchases of our aggregates aware of the bill and the provisions and the need to check that, if there are purchases in aggregate, they purchase it from a registered taxpayer. I think that the convener alluded to an open question. In your opinion, minister, what is the point of this bill beyond—is it the bill just really a sort of tinkering sought as part of the Smith commission that you are obligated to go through with? In terms of substantive value to Scotland's economy, the areas where we might be able to do that at the moment seem quite limited because of all the areas that we have discussed, but what is your opinion? Is it something that has just got to be done because it was agreed at the Smith commission but with no really substantive value? I think that there will be substantive value through the devolution of the aggregates living the creation of a Scottish aggregate tax. I think in the first instance, having Revenue Scotland as a tax authority and a rigor and skill that it can bring to the administration in touching on the compliance issues that we have explored will be of benefit and value. I am conscious that the question in which it was framed and the convener's earlier remarks with regard to ambition suggest a view of what is the longer-term trajectory of this tax, how would the rate be used as a policy tool? I have sought to set out the reasons and rationale, and I will not repeat that, but I think that the points that were touched on in your previous question, Ms Thompson, around some of the known unknowns with regard to the aggregates, are not insurmountable problems. We will be remedied with the experience of this tax coming online and the data being collected with Revenue Scotland. In the first instance of things that I think we can be clear about in terms of benefit and gain from the devolution of this tax is that around administration and addressing some of the concerns that have been raised by stakeholders and members of the committee around compliance. However, with more data and greater understanding of the way in which the tax operates and the make-up of the sector in Scotland, there will be that opportunity for Governments to take a view as to how that can be more effectively used. I do not know of itself, but in conjunction with other fiscal and regulatory levers at the disposal of the Scottish Government, I recognise that in terms of the forced cash revenue it would represent a very small part of the Scottish budget. However, for the reasons that I have set out, there is value to what is being devolved with regard to the tax. I recognise that, if one compares it to the quantum of revenue that has been generated either through the partial devolution of income tax or even the full devolution of LBQT, there are different orders of magnitude. Nonetheless, for the reasons that I have set out, there is value in the tax being devolved. For the approach that we have taken in terms of partnership, engagement and collaboration with stakeholders and the design of the legislation that is consistent with our framework for tax principles and the new deal for business approach. A lot of the points that I was going to ask about have been covered by the convener and by Michelle. However, I wanted to summarise some of the points that you have made. I also referred back to some of the evidence that we took last week. First, perhaps a bit of a daffladi question, but is there any statutory requirement to bring this legislation through now? I was part of the Smith commission in the Scotland Act, but is there any statutory requirement to bring this through now? There is not, as I would define, a statutory requirement for the UK aggregate level to be switched off requires in order to be made by the UK Government, correct me if I am wrong in that. So, what there is is a set of commitments that were made as part of the Smith commission, then the legislation and as part of the fiscal framework. I recognise that there is interest in a range of areas across those commitments. However, there is not a set date in which the UK aggregate level, we understand, would be switched off, irrespective of whether or not we had passed legislation to introduce the Scottish aggregate's tax. Given the points that have been made already, there is a lack of data that we all appreciate and do not necessarily lay at anybody's door, but also the costs of setting up this bill, the uncertainty over how it will impact on the block grant adjustment, it is likely that this will cost money from the Scottish budget. So, why bring it through now when all those uncertainties are there? I think that, in touch on my earlier answer, many of the issues around uncertainty can be addressed with the tax being coming into operation and the provision of data that will follow from that process. I recognise that in any transfer of power there are costs involved, that is reflected with the other devolved taxes, for example in other areas of example around social security. However, it is important in terms of assessing the value of devolution of any power, in the case of a tax power, it is not simply to look at it—I am not suggesting you are, but it would not be to simply look at it in terms of the set-up costs, but to assess it over the medium to longer term. I think that that is a fairer approach to take. Very much recognise the costs involved in the establishment of the tax and also recognise some of the two challenges that were discussed around data, but the challenges around data can be remedied with time and the tax being collected by revenue Scotland. There is an opportunity that we have clearly identified already through the legislation is to address some of the concerns that have been raised around compliance. Of course, with that opportunity should Parliament agree to the legislation to reflect and review on it after it has had some time in operation. Of course, with that additional data being provided, that will provide a larger evidence base for future Governments to consider the use of the power. A lot of the evidence that we seem to receive on compliance certainly—some of it, sorry—was anecdotal. I asked Elaine Larimer from Revenue Scotland last week, do you have any estimates of the current cost of non-compliance when you say cost? As you replied, when you say cost, you mean revenue loss? Yes. I am sorry, I am not able to provide you with that. Even revenue Scotland is not sure about the even estimates on lack of compliance at the moment. Given the importance that revenue Scotland seems to be putting towards it, is that not slightly concerning that there are no real estimates on the cost of compliance? The issues around estimates are reflective of that broader challenge that we have around data, but in terms of the issue around compliance, it is something that has been highlighted to the committee directly by stakeholders. I simply highlight that it is an example of where this power and the devolution of this tax can confer a benefit. It is something that is identified by those operating within the sector. The objective of this tax is that revenue from it will reduce because that shows that, if the Scottish Government's broader policy objective is to increase recycling, tax on unrecycled raw products will, hopefully, in your mind reduce. As a member would appreciate, there are a number of factors that can determine the availability and suitability of secondary and recycled materials. The committee has heard a great deal of detail about that in visits and engagement. We recognise the essential role that primary aggregates producers play within the Scottish economy and the essential role in delivering on infrastructure and a range of other projects. In terms of the actual revenue that has been generated, you will obviously be familiar with the OBR forecasts and what we would want to read into that for Scotland in terms of the over-the-forecast period. Our focus in this particular state is, as I touched on earlier, just about ensuring that we have legislation that provides for the effect of administration of the tax and it allows future Governments to take decisions based upon the data that they have available on what the tax should be once the power comes into effect. In terms of the actual revenue itself, there are a number of factors. It is not simply down to the tax itself and the rate that it is at. It is at the level of economic activity, wide and macroeconomic conditions, the interaction of BGAs and so on, which I know the committee appreciates. I will pass back the convener because I know that I have probably got more questions to ask as well. I do not see a huge amount from advantageous about this unless the rate is changed. Obviously, that is something that I am not suggesting. I would advocate, but it would seem to me that, unless that differential is used, the administrative and other issues are not a great benefit. I am not going to bombard you with myriad additional questions. I am just going to ask one more question, which is really from ICAS that followed up meeting last week with a re-letter. It is just about section 2 of the bill that I did not touch on because I knew that other colleagues were likely to do so. Although we want to see taxes that are due paid for those who do fulfil, there appears to be no official objection complaints or appeals process within the bill, which is somewhat inequitable. Is there going to be any change at stage 2 to alter that? Is this with regard to the interaction with Revenue Scotland? I am sorry, convener. What is it to do with section 132 of the day-to-day debt management, which is what HMRC uses? Basically, it is about the offsetting and where it applies. I would be happy to consider any specific views that the committee has. Of course, there is the existing legislation that governs the operation of Revenue Scotland, which is quite detailed and complex with the guidance approach that Revenue Scotland sets out. If the committee has specific concerns about the way in which any of the sections are drafted in part 2 of the bill, which I was touched on earlier, I would be more than happy to consider that if it is the matter that the committee is going to raise at stage 1. I will discuss it with Revenue Scotland. Clearly, we would want to ensure that we have a legislation that allows Revenue Scotland to continue to operate to the very effective and high standards that it does operate. However, I do appreciate that there can be concerns raised by stakeholders, by committee, about statutory provisions and backstops and rights to be set out clearly in legislation. As I say, for specific concerns, I would be more than happy to engage with Revenue Scotland in that and report back to the committee. Thank you very much. I think that we certainly appreciate that. Are there any further points that you want to make before we wind up the session? Only to say thank you very much to the committee for the opportunity to speak with us more than for all the good engagement in the matter and look forward to further discussions as the bill goes forward. Thank you very much for that. I also thank you to your officials for all your contributions today. That concludes the public part of today's meeting. The next item, which will be discussed in private, is a consideration of our work programme. Therefore, I call our five-minute break to allow the official report and our witnesses to depart.