 Mae hi, ari ac rwy'n gweithio i gyd mewn gwahoddiadol ar gyfer y Cymru yn 2017. Rwy'n gweithio i ganddig o'r pryd, yn ddysgu'r cyffredinol, ac mae gweithio ei ddweud o'r cyffredinol yn ddweud o'r format digital. Rwy'n gweithio i gyd, mae'n gweithio i ddweudio i gyd, ac mae'n gweithio i ddweudio i gyd, ac mae'n gweithio i gyd, dwi'n gweithio i gyd, rwy'n gweithio i gyd, rwy'n gweithio i gyd. We have a full house, no apologies have been received. I'll be moved straight to agenda item 1, which is decision on taking business in private. The committee is invited to agree to consider its draft report on the draft climate change plan RPP3 in private at future meetings. Are we all agreed? I thank members for that. I'll be moved to agenda item 2 under the heading of subordinate legislation and the committee will take evidence from the Cabinet Secretary for Finance and the Constitution on non-domestic rates Scotland order 2017. This item has been tabled by Andy Wightman. It was tabled, I motion to annul this negative instrument, which will be formally considered at agenda item 3, the next item on the agenda. I now move to welcome Derek Mackay, Cabinet Secretary for Finance and the Constitution. Good morning, Mr Mackay. I also thank Graham Owenson, team leader, local government finance, local taxation policy, business rates unit and Douglas McLaren, head of local taxation, local government finance, local taxation policy and business rates unit, Scottish Government, both of you this morning for coming along. Thank you. Good morning. And I understand the Cabinet Secretary has some open remarks to make. Thank you, convener, and thank you for the opportunity to discuss with the committee Mr Wightman's motion to annul the non-domestic rates Scotland order 2017. This is a very simple instrument, which is required annually to set the non-domestic rate or the poundage for the coming financial year. For 2017-18, this instrument will set the poundage at £46.6 pence, which is a reduction of 3.7% compared to the rate of £48.4 pence that applies in 2016-17. Although a simple instrument, the implications of it not coming into force would have a profound impact on our budget, which is due to complete its final parliamentary stages in stage 3 of the budget bill debate tomorrow. In particular, it would not support the resource to be provided to local government if not proved. We should all be absolutely clear that a decision to annul this instrument would leave a whole of more than £2.6 billion in our public spending and specifically in the funding that goes to local government. I wish to maintain a competitive rates regime and have engaged directly with business and retail groups that responded to their concerns, which is why the draft budget recognises the business rates revaluation and proposes a competitive package of measures to reduce rates across Scotland by £155 million. This is giving small and medium enterprises the security and confidence to grow in tough economic times. Next year, across Scotland, more than half of premises will pay no rates. 70% will pay either no rates or less rates than they do now, and a total package of relief that we are offering will increase to more than £600 million. Additionally, this year we have increased the threshold for the large business supplement, meaning that 8,000 fewer premises will pay it, and as members will all be aware, we have increased the small business bonus threshold to ensure that 100,000 properties will no longer pay business rates. As I announced to Parliament yesterday in light of the revaluation of non-domestic premises, we will also ensure that across Scotland no restaurant, pub, hotel or cafe will see their bills increased by more than 12.5% on April 1. Additional support is also injected into the north-east economy to recognise the impact of the oil and gas downturn, and we're supporting our renewable sector with a further package. So the estimated cost of the additional support package announced yesterday is £44.6 million, taking the total package of support to businesses in 2017-18 through the rate relief. It's now worth more than £668 million. I know that Mr Wightman is looking for further debate on the matter of non-domestic rates, and I would suggest that the time to do that strategically is following the external review led by Ken Barkley, and that review is due to conclude this summer. So, convener, in light of all of those comments and my undertaking to engage fully in further discussions on the wider scrutiny of the non-domestic rates process, I hope that Mr Wightman can agree to withdraw his motion. Thank you very much, cabinet secretary, and we will move to questions, and I'll take Andy Wightman first. In the explanatory notes to the non-domestic rate Scotland order under background, you say that the 2017-18 business rate multiplier for England was set at £46.6, and the instrument result in the poundage rate in Scotland being £46.6. In other words, the only explanation that we've got as to the poundage is that it's the same as England. Now, I'm well aware that in the last Parliament, the SNP had a manifesto commitment to maintain parity with the English rate for the duration of the last Parliament, but it made no such commitment in this term. Yesterday in Parliament, you said that back in December you had announced a range of actions that the Government will take from April, and you said that to reduce the impacts of bills overall, I confirmed plans to reduce the poundage. So, in a sense, it seems explicitly that you chose this rate in order to reduce the impacts of bills and the explanatory notes. It appears it's to bring it into line with England. Can you explain something about the background and the criteria you use to decide what the poundage should be in any financial year? Essentially, it does match the poundage to the case in England, so that's correct. It's also correct to say that the Government had a manifesto commitment to do that in the past. It didn't feature in the 2016 manifesto in which we were elected to match the poundage with England, but we still believe that it puts us in a strong competitive position so to do. I also didn't insist on a revenue neutral revaluation. The range of actions that I've been able to take, as I say, will actually mean the same or less bills for 70 per cent of companies and all the other key points that I've outlined to the committee and to the chamber yesterday. By reducing the poundage, that is a reduction in the tax rate through non-domestic rates, but for the general poundage it is matched to England. The kind of considerations that any finance secretary would take into account when determining that is the overall budget position, the support for local government and the right balance of measures to support business, which includes setting the poundage and the other reliefs that the Government has decided to take. In other words, the desire to reduce the impact of bills overall and the desire to maintain parity with England are just coincidentally bringing you to the same number. Both have been achieved. I understand that, but you said in your answer to my previous question that you did not insist on a revenue neutral revaluation. Could you amplify what you mean by that and what were your other choices? The Government obviously looks at the range of reliefs that we have, what support we want to give to businesses that come at a cost. If you look at the decisions that we have taken on the poundage to reduce the poundage, of course the ratebo value will be different in England. Actually, their ratebo values have gone up higher than was the case in Scotland in terms of overall values, but the decisions that we have taken around poundage, small business bonus and large business supplement, that is £155 million worth of relief or change to the poundage. So, what we have done is we have determined what is right for our budget as set out through the draft budget and beyond whilst also matching the poundage, but I would argue being more generous around reliefs. We have taken the decision in the context of the wider budget, the business environment and what has happened south of the border as well. In principle, we are matching the poundage in England, but we have taken decisions that, yes, have amounted to the Government ensuring that our resources are used to make sure that there is a competitive environment for Scottish business. That is why we have arrived at the decisions that we have. So, back in December when you published the draft budget and you first indicated that the new rate would be 46.6 pence, at that stage you were fully cited on the possible new tax base as a result of the revaluation? We would have had some preliminary evidence at that point by no means all the detail, because that has emerged over the last few months to take us to the position where we have more information, what revaluation means now. Indeed, some of that will continue to change as businesses take, if they have reason to appeal. They might take appeals to panels as well. Those figures can still be fluid, but as time goes on, you are more certain to the estimates, the forecasts and the decisions that we can take. That is why, by draft budget, in December, 15 December, when I outlined the draft budget and the local government settlement, it was important at that time to give certainty. That was the early action in knowing some of the impacts from revaluation, but, as I say, more has emerged over the last number of weeks. I have a number of other questions, so I will ask one and then open it up to other members of the committee. What consideration is given when you set the rate to regional variations across Scotland in land and property values? For example, values in one part of the country might be rising very fast, values in another part of the country might be dropping, for example, and you have just got one rate that you can set. Obviously, there is a wider debate to be had on whether we should have a nationally set rate, or whether we should have locally set rates. Before Parliament was able to set it through the recommendation of government, I understand that it was previously the Secretary of State that would have set the poundage in Scotland. This is a far more democratic process coming through the Scottish Parliament. When I have arrived at the decisions, of course, I will look at impact, forecasts and estimates. Of course, I have described how the revaluation and the decisions that the government is able to take around poundage and all the reliefs being put into place will make a difference for people. There is a difference from area to area, that is true. There is a difference in how the economy has performed, not least in the north-east, which is why I have taken specific measures around the north-east and the relief and the supports there. It is also why, when I was local government minister, when I was taking forward the community empowerment legislation through the bill, we gave empowerment and enablement to local authorities to create local rates relief schemes that are right for them to show that sense of empowerment to help to design a system that can adapt to local circumstances. However, in terms of the poundage, the national rate is set by government, by Parliament and then, as I said, there is room for flexibility around that and reliefs at a local level. However, it is a nationally set rate where I take into account the national budget position, of course, and the business environment that we are trying to create, and then the reliefs that can be designed as appropriate. Was your starting point in all this that you would match whatever the poundage was in England? I think that the starting point is to look at all the information and evidence that we have, both in terms of the budget and the principles that we would want to pursue. Generally, having a good competitive regime for business rates is absolutely worth pursuing, so whilst not a 2016 manifesto commitment, I would like to maintain and match the poundage with England. However, there are now a range of things, and there have been a range of things that the Government has done to make Scotland more competitive, particularly for small businesses. Yes, that is something that I generally support, but I have to look at the total budget position, the forecasts of income, what that means for local government and take all of that in the round to answer that question fairly, Mr Simpson. It is important, but it is one of many factors that any finance secretary would have to take into account when determining the rate. Yes, I get all that. It is just really around the poundage, so you seem to be saying that you were keen to match the English poundage in order to make Scottish businesses competitive. Is that correct? Yes, I am keen to do that, as I say, but there are many other factors that come into play when you are determining the budget, but yes, in principle, that is something that I have pursued. If you were to not change the poundage, not reduce the poundage, what effect would that have on Scottish businesses? If it is self-evident, if I had not reduced the poundage, businesses would be paying more. The decision that I have taken comes at a cost of £108 million in terms of the valuation to reduce the poundage. Have we got a figure on what that would mean for Scottish businesses? Sorry, the reduction is 3.7 per cent. In terms, what would the cost be to Scottish businesses if we did not reduce the poundage? That is the figure that I have reduced the poundage by £108 million that businesses, as a consequence, do not need to pay, and that would be every business that pays business rates in the country. Their poundage is reduced as a consequence of the statutory instrument. Right, thank you. Clearly, if we were not to agree with Mr Whiteman and not yourself, that has a major impact on Scottish businesses? First of all, if the statutory instrument was not agreed, actually the biggest loser would be public services, because I would not be in a position to raise that tax to invest in public services. If we then had an argument over the rate being right or wrong, that is almost a separate debate, but what the instrument does is that technical instrument to raise the revenue to invest in our public services, but the rate at which I have set it is reduced. Okay, I think that that is very clear. If I could just make a point, and it is to agree with you earlier that if we were to go down Mr Whiteman's route, we actually ought to be waiting for the Barclay review. If we want to look at how we reform things, that would be the way to proceed. Would you agree with that? I have said that I am quite open-minded on further debate and discussion, that the Barclay review will be very helpful around the subject of business rates. Yes, I am happy to engage further on a cross-party basis and continue to engage with business, as I have been, to study that further. Cabinet Secretary, I am sure that you are aware that this committee is also going to be taking evidence in relation to non-domestic rates, and we have asked Ken Barclay himself to come to the committee or someone from his team to give us information ahead of publishing that review. If we will be doing a piece of work on that, there is a feeling that non-domestic rates perhaps have never had so much scrutiny within the Scottish Parliament, but I think that that is a good thing. Following the publishing of the Barclay review, would you come to this committee and give evidence to this committee in short order as well? I know that you have to consider that review, but I think that we would be quite keen to get you back to the committee to get your initial thoughts on it. Convener, of course, I am happy to engage with the committee in further discussion and further evidence. I am absolutely happy to do that. In any event, I do not think that it is a minister's gift to refuse to attend committee in any case, but I would happily proactively do that, not necessarily the same proactivity that you enjoy from UK Government ministers, but I would be happy to engage with the committee. I would not dream of making that political point, cabinet secretary. I would always politely ask cabinet secretaries to come before we go down the road of insisting, so I appreciate that. Can I just write down some notes in your opening statement? The specific financial cost to public services and the revenue we would forego if the motion was a null today. Can we just get that again for the public record? I think that that weighs heavily on every member at this committee today. It is £2.6 billion. Just go over £2.6 billion. And by and large, or entirely, that is money that will go into the pockets of local authorities across Scotland? Yes, entirely. The non-domestic rates are kept within the local authority area, same as council tax. The difference with non-domestic rates is multi-year budgeting, but, yes, it all goes to local government. A suspect of this motion is moved to a null. That number of £2.6 billion for gone by local authorities will be repeated by several members of this committee as a very negative thing and a very dangerous thing. Indeed, I have no further questions in relation to this. Thank you for joining us, cabinet secretary, this morning. I want to ask about the process in line with what the convener has just been asking. First of all, you mentioned in your opening statement the cap, basically the announcements that you made yesterday. We have a cap for certain businesses, hotels, et cetera, but also a further advantage, if you like, for the northeast to offset the oil and gas situation. Could you tell me a bit more about that, how that would impact on businesses? Okay, so the national action that I had taken from draft budget includes small business bonus, large business supplement, lowering the poundage. That was the early actions I was able to take, but then understanding the impacts of the independent re-evaluation, of course companies can still appeal if they think that there is information to challenge the assessments from the assessors. There is still the appeals process. The extra action was around where there is a specific sensitivity, I suppose, for the hospitality sector. There are two reasons for that. First of all, the highest increases seem to be among the hospitality sector. The second big issue is that the methodology used has been around turnover. When you take turnover into account, not necessarily profitability, but turnover at a point in time, it certainly gives the hospitality sector a justifiable case to look at that sector. That is specifically hotels, pubs, cafes and restaurants within that category. That is hospitality and that is why the cap of 12.5% within state-aid rules felt appropriate. For the northeast of the country, the economy specifically there has been impacted because of the downturn in the North Sea. Hospitality will have an issue there and nationwide, but for the northeast Aberdeen and Aberdeenshire it has been the case that, for example, offices have been impacted and rental values and so on. A regional approach for that area is the appropriate thing to do when you look at the evidence and the circumstances and the exceptional case that they have been able to make. At the same time as those national reliefs and nationally targeted reliefs, I have also been working with local authorities and the local authorities are important here because they have that empowerment. They have that locally enabled power to create any local rates relief scheme that is appropriate to them. Perthynkin Ross Council is actually a trailblazer here and they targeted support previously towards retail. Now, any council could have done that using their own resources. It is very flexible legislation, very empowering legislation, but Aberdeen City and Aberdeenshire Council, first of all Aberdeenshire Council, had agreed, the administration had agreed a relief package around business rates. What they can now do is shape a local package of reliefs around what the Scottish Government is proposing to do. That might be to augment schemes, cover other sectors, whatever they choose to do, they can take that forward. Similarly, Aberdeen City Council will have a local rates relief package as well. I understand that Perthynkin Ross is looking again at how to augment their scheme. Any other local authority in the country can help to design further local reliefs that suit local circumstances. I think that that should absolutely be encouraging as the right thing to do to address any outstanding local issues. I recognise that in any revaluation there will still be hard cases and that is why there should be existing flexibility for local authorities to look at that. That is why I have done national scheme around hospitality, targeted to the north-east for that very specific reason and then local authorities are empowered to look at further support. Thanks, convener. I think that maybe brings us back to something that Andy Wightman mentioned at the beginning about local circumstances. Perhaps that is something that is better looked at through the review. I am sure that the committee will be looking at some of that when we take evidence as well. I will pin it down slightly more because, certainly, reading some of the stories of businesses and what they were going to face for small and medium enterprises, local publicans, etc—little cafes—you could understand that. What I want to specifically ask is whether you mentioned hotels. Does that include a big chain of hotels? I will give an example, because it springs to my mind that President Trump, for example, has premises like that in the north-east. Does that mean that that hotel premises would benefit twice from a cap and then from relief in the north-east? First of all, as Elaine Smith would fully expect me to say, I cannot design a tax policy to suit individual owners or, indeed, affect individual owners just based on their ownership. I cannot and should not design a tax system to target individuals that have to be about fairness and sectors and then, indeed, geographies. The scheme that I have described for hospitality benefits the whole country, of course, right across the whole country. As I say, 70 per cent of people will enjoy no rates or reduced rates as a consequence of our actions. I cannot itemise individual owners—I do not think that the member seriously would expect me to do that, but I bring everyone's rateable values to committee with me—but what I can say is that our relief scheme has been designed in light of the evidence that has been presented to me by the sector and is warmly welcomed by the sector's business representatives, who I will see later today as well. In terms of the cap, the cap at 12.5 per cent, half of all small hotels would have been paying no business rates anyway because of the small business bonus. We have targeted our support to smaller and medium-sized companies, but for the larger hotels that the member is identifying, state aid rules would comply. State aid rules mean that support can only be given to a certain amount. That works out at £170,000 over a three-year period. Yes, some of that support might be consumed in the first year, but that cap of support applies. There is only so much support that any individual company can get, but the balance feels right to target our support to small and medium-sized enterprises. However, for many of the hotels that I have put across a legitimate case about what it might mean for their business, I did hear examples of how even the big hotels may have been threatened by a huge increase. That is why it is right to have a balanced approach that provides as much of a competitive regime as possible and relief for as many as possible right across the country, and every council area receives support from that, but in a fair and proportionate way. Thanks, cabinet secretary. Can I just briefly turn to the process now as well? Although, first of all, just clarifying that keeping it the same as England with the reduction that we are talking about, that is a loss to the public services that you say would lose out if we annulled this instrument today, then there would be a loss to public services. However, the fact that it is being kept the same as England and it is not being raised is also a loss. I take the opposite view from asking the opposite question to Graham Simpson. There is a point of view that if we did not lower the poundage and we raise more money from businesses, if we tax more, we can invest more money in public services. That is a point of view. I have taken the view and I hope that the committee agrees with me that this is the right balance. We are matching the poundage in England. It does represent a reduction to the tax rate for businesses in terms of the poundage. It still raises an adequate amount of money and applies all the relief that I have described that supports 100,000 businesses through small business bonus and all the other support measures that I have outlined, the regional support, the capping. I think that it is a very comprehensive package and I think that it is the right one. However, public services are still adequately funded because, of course, the Government is using other resources, other tax decisions and other measures to ensure that we invest in our public services and in our local services. On 15 December, I published the local government settlement as well as the circular. Since then, of course, there is a consequence of the budget negotiations with the Greens, credit where it is due. I have allowed a decision for further resources to go to local government. There is huge investment in local services, representing an increase as well as the council tax changes that we have made as well. That does all represent a substantial increase for our local services of well over £300 million as well as an appropriate tax decision as well. Thank you, cabinet secretary. We have had that debate. I am not going to go down that road this morning again. It is a point of view, if you like, about whether it increases or not to local government. However, what is a fact, obviously, is that, rather than a point of view, would be that if you did not decrease the poundage, there would be more funding available. However, it is a point of view whether or not you wish to do that. Perhaps I could just move on to the process of this whole instrument today. You have said that if this instrument were to be annulled today, then that clearly means that—what was the figure again? Two local government would be lost. However— It is a point for procedure that if we are asking a question about what the figure should be, we should not answer it. We should leave that to the cabinet secretary. So, just for clarity, our deputy convener was asking what the figure for the loss to public services might be if this was annulled today. Okay. What I would then like to ask is, if it was annulled today, would it be the case that that would just simply be lost, or would there be processes put in place? What would happen to the budget process? Clearly, it is not an option just not to take this forward in some way. So, what is the actual process? Let us suppose that it is because we do not know what is going to happen under item 3 at the moment of the agenda. So, let us suppose that the committee is minded to annull the instrument. What then would be the process? Well, convener, if I can say I do not think this committee would be that reckless to risk over £2.6 billion to the public services of Scotland, I do not believe that any member of this committee would actually let that happen. Either the Government could bring forward a new statutory instrument or it could go to the full chamber of Parliament, but I know that the members of this committee are reasonable and sensible people and would not jeopardise over £2.6 billion worth of public services. I can just say, I sort of interject, but I feel as if we are drifting into a debate, which is at agenda item 3. So, if we could have questions, and I apologise for stifling that debate, but if we could have questions and answers, that would be quite helpful. Well, before we do, because we have discussed the money that would be lost to local government already under this item and because we have discussed the motion to annull and what would be the consequences of that. Your self-convener pointed out the consequences of that. What I need to know is what the process is. So, if there was an agreement to annull, whether or not members around the table would decide to go down that route as conjecture at the moment and whether or not members are sensible or not is also conjectured, what I would like to know is the facts of what happens if the committee were. Because we have had the motion, so someone has put the motion forward. We do have the motion on the table, what would be the consequences, what would be the timetable. This is the only opportunity that I am going to get to ask that, because if we move into the next item, it becomes a debate with no questions. So, I would like to clarify what the timetable would be if this motion to annull were to be. When would it go to the chamber? When would another motion come forward from the government? What would be the timetable? The convener, in fairness to me, you are asking me questions that are actually appropriate to parliamentary business, because what would happen next is that it would go to Parliament, and that would be for parliamentary business managers, as I imagine, to determine. Of course, ideally, I would like it to happen before stage 3 of the budget, because I do not think that it would be appropriate to proceed with the budget without that certainty that the non-domestic rates income would be received. We also want to point out that this process is not a new one. This is the same annual process for how we set non-domestic rates. There is no change here. I outlined the government's position in the poundage. That is what this statutory instrument is about. Everything else is peripheral to that. The key issue here is the poundage. That is what we are setting through the statutory instrument. If that is approved, the over £2.6 billion can be raised and therefore distributed to local government, as set out in the government draft budget and circular. If it was not approved, then it would go to the full chamber for a full chamber vote in the timescale that Parliament determined. That is the process issue. The process has not changed. The poundage will be set by Parliament, and then people will have the certainty to get on with it. I want to make one further point about scrutiny. It would be wrong to say that business rates have had no scrutiny since 15 December when I outlined the draft budget. I covered rates issues in the draft budget. On the very same day, I sent the local government settlement out and also the circular. From that point, there has been awareness and engagement in the business rates and local government settlement issue, yes, augmented by the budget negotiation process, but there have been many opportunities to engage in that. Stage 1 debate, stage 2 debate, appearance of committees, and of course there will be a further opportunity at stage 3 debate in any further statutory instrument that may be required for further release, all subject to those established parliamentary processes. That is the process, convener. I hope that helps, but timescales in the hands of parliamentary business. I say again, realistically, I do not think that this committee would really put at risk the £2.6 billion worth of non-domestic rates to support our local services. I think that anything additional on that from our advisory north cabinet secretary who left the debate and agenda item 3, perhaps, has given me perhaps a bit more to Alexander Stewart for a follow line of questioning. Thank you, convener. Cabinet secretary, thank you very much for outlining where you are and why you made the decisions that you did with reference to some of the reliefs to the industries and locations. For those who are not in that category, obviously you have talked about an appeal process and there is an appeal panel that can take place. Is it anticipated that the majority of people who find themselves now in excess of what the rates they had in the past will go for an appeal? Obviously, those appeal panels will take time to progress and process and decisions to be made. Have you factored into anything in your process how that will take place? Because there could be thousands of businesses who feel aggrieved in this process and want to appeal and have to go through that process. Therefore, there is a knock-on effect as to what will happen with their rates and if they do manage to get an appeal or it is carried on as was expected. Have you factored that into the process? Mr Stewart asks a very good question and also recognises that both the revaluation process and the appeals are independent of government. I cannot direct, but we would factor in appeals assumptions as part of our budgeting process. I cannot predict how many would appeal, but experience would tell us that most probably do appeal. Indeed, if you take some of the sectors, there is some evidence from some businesses that they withhold information and then present an appeal. That means that there is a different outcome on what their rateable value is and therefore what they pay. That has been the experience of the past. Most appeals will have to work through the system and I see no reason why that would not be the case this time round. My second question goes back to the local government. You commented on Perth and Canos Council on what they had achieved in trying to support local schemes. Are you, as the cabinet secretary, disappointed that other local authorities have not gone down that route? Or are you surprised? Was that expected? I do not want to criticise local authorities. I think that I have taken appropriate action at draft budget and since on this issue information has emerged. I welcome the fact that Perth and Canos took action using the powers of the First Council to use those powers previously. Aberdeenshire, in view of the revaluation, has moved quickly to produce a scheme and have engaged with Aberdeen City as well. I had a very constructive meeting with Grampian chambers of commerce where I met businesses and we discussed the way forward. I said the range of actions that I have taken. That chamber of commerce has welcomed the actions that I have taken. I have been true to my word on how I would engage and what I would do on business rates. They also asked the council to take action and I think that they will continue to lobby the council Aberdeen and Aberdeenshire to provide a local rates relief scheme that is appropriate. Yes, I would encourage every single local authority of Scotland to look at the local circumstances and say what might be appropriate. Some councils might conclude that it is not appropriate, some others might conclude that it is appropriate, but there is legal empowerment so to do. I think that there are extra resources in the system as a consequence of the budget negotiations and local authorities should feel empowered to build in any augmentation or additional support that they feel is appropriate and should engage with local business in arriving at that, but that is a matter for them. That is encouragement from the Government and my officials will provide whatever support is necessary to do that, as we have done with Aberdeen and Aberdeenshire. Thank you, convener. Keith Gibson. Thank you very much, convener. To follow on from what Elaine Smith was asking, the implication was that the £108 million that you are putting into cutting the rate poundage is money lost to local authorities. Is it not the fact that if you do not maintain the competitive business rates, you could in fact lose some businesses and then you do not collect any money whatsoever from them? The Federation of Small Businesses said at the peak of the recession that the small business bonus scheme, one in six small businesses, would have went bust, therefore you would not have been collecting any rates, therefore there would not have been money to go to local governments, so a balance has to be struck. Yes, absolutely. I think that Kenneth Gibson raised a fair point. What Elaine Smith was saying indeed is that I had taken another decision and put business rates up far higher. That would have generated more income in theory for the public sector, but actually the budget that I am delivering already delivers £900 million more for the public sector and the public services of Scotland, including a substantial increase, of course, for local services as well. I am already doing that public sector investment bit, but what I am not doing is trying to undermine business, so that is why I have set the business rates at that appropriate level. Kenneth Gibson is also right to say that if they were not set appropriately, yes, that could damage business. If there were inappropriate decisions around the tax rate or absence of release, then yes, some businesses would of course be stressed from that. I know that Kenneth Gibson is a fund of Paisley, as I am. I actually launched the business rate policy in Paisley. The business that I had visited was one of many who, for the first time, will be applicable to enjoy small business bonus. What they are going to do with that is also help employ new staff, grow the business. I think that it is showing how the small business bonus is specifically supporting businesses and helping them to grow and help to sustain our high streets at this very difficult time. I think that we have got the balance right whilst not jeopardising the income. I was going to ask completely unrelated to the issue of disysgust. Rural rate relief is about £5 million a year, so it is less than 1% of the total support that the Scottish Government provides to businesses in terms of rates relief. I am just wondering how it ties in with the small business bonus, given the threshold of £8,500 compared to the £15,000 under which small business bonus means that no rates are paid. Where does it actually fit into the big picture now? Obviously Rural Scotland is a lot bigger than the £5 million relief that it would suggest, so it seems to be a fairly small beer in relation to other reliefs that the Scottish Government implements. It is a good question. A lot of our national reliefs, like small business bonus, clearly will help a lot of rural businesses as well. That catches a lot of the rural businesses, and that is concentrated in certain areas. I suppose that the rural rate relief is a further safeguard, a further catch-all to try and support businesses that might not benefit from the other rates reliefs, which are of course supportive of urban and rural. Do you think that McLaren can give a bit more detail on how the additional rural relief does that? The small business bonus scheme does have the higher eligibility threshold of the £15,000 rateable value. However, as you might be aware, if an occupier has multiple premises, the cumulative rateable value can take them over that threshold. What the rural relief does is that it catches premises up to an individual rateable value of X for store, pub, hotel, restaurant and filling station. Except that, as a case for adjusting that, it has been the same rateable value threshold for a number of years. However, because so many of those properties are caught by the small business bonus scheme, in practice, there are very few that rely on that extra safety net of the rural relief. I thought because of the amount of money. One of the concerns about the system, and obviously the Bartlett review will be looking at this, is the complexity. The recipients of that will still take the view that it has a role to play, but I am just wondering if it can be done in a more efficient effectively, given the huge support that is going into the small business bonus scheme relative to that? I think administratively, yes. I mean, I won't dwell too much, but some of the reliefs that they actually have in the legislation are hierarchy. Councils have to apply one before the other. In case of small business bonus and rural relief, the council just makes sure that the business gets the best benefit across the two reliefs, but except as a case for a bit of streamlining administratively. Are there any further questions from members before we give the cabinet secretary the opportunity to make some closing remarks and move to the next agenda item? Can I just ask one very brief question, cabinet secretary? Politicians and politicians, politics come into play quite often in relation to things such as this, but should we, in the future, look at the next time non-domestic rates are looking at any changes or revaluations or whatever, should we look at this kind of dynamic as a normal part of the political process? Is it not reasonable for Governments to get data hypothesised about what a rates poundage might look like, what a rates relief scheme might look like and then take the temperature out in wider Scotland and make amendments as appropriate? Should we not just see this as part of the normal process in the future and embrace it rather than get into what I think we've got to as a parliament where it's been adversarial? Well, convener, in that ideal world, that sounds good to me where it's not adversarial and everybody's happy at the outset if you can help me design a process that achieves that, I'm happy to engage, but can I say in all seriousness that in answer to Andy Wightman's question in the chamber just yesterday, I did say that the budget review group, which is looking at how the Parliament delivers its tax powers and its budget powers, I think it is worthy of further consideration, but as I say, the process that we have inherited, the process that we've traditionally used is the one that is being used for setting the non-domestic rates, but as I say, we're happy to engage in this issue through the budget review group, which has experts here as well. But I would make the point again that revaluation is independent of government, so a really important point is independent of government, and as we get the evidence, and as businesses and their representatives get the evidence, we respond. So I took early actions in the draft budget, as I've described, and then I've taken further actions as the evidence has emerged. Parliament has had the opportunity to discuss this at the stages I've described, stage 1, issuing of the local government settlements stage 2. We'll also have the time to debate it further, if that's what people want to do at stage 3, committee appearances and in other places. I think that it has had a good airing. Is there a better way to do it? Well, let's engage with that discussion. I suppose that it wasn't a naivety in asking the question. Cabinet Secretary, politics always comes into things, but it should be a normalisation of this process from what I can see. It's reasonable for the independent assessors to do their job. It's reasonable for the Government to make a first cut of what a regulatory scheme might look like, and it's reasonable for businesses in Scotland to take some views on that. This is an entirely normal part of the process, and it's reasonable to expect a cabinet secretary to then react and act appropriately, based on those concerns. Should we not find a better way of normalising this process? As I say, convener, I'm happy to engage if you think there's another way or a better way of doing it, but what I would want to reassure the committee is that, when the Government gets the evidence, we consider it, the Government then presents our proposals. Other Opposition parties can present alternative proposals if they want, if they think we've got the wrong poundage or the wrong balance of reliefs or the wrong budget decisions. That can happen in this Parliament. That is normal. Then there's the budget negotiations as well. If Parliament doesn't link the package that this Government has put across, it can vote against it. It could have suggested alternatives. What will be really interesting is that, after the Government has engaged with the business community, has looked at the evidence, has delivered a budget that invests in our public services to the tune of over £900 million, has set tax rates that are fair and balanced, that any Opposition party would dare vote against all those very progressive, proactive and pro-enterprise measures. That will be the interesting question, convener. I will move to the debate, cabinet secretary, which really wasn't my intention there, at your points on the record. Mr Whitman, did you want back in? That may have been your closing statement, cabinet secretary, but it was, convener. In that case, I thank you for taking part in the evidence session. It was fairly robust and it was a longer evidence session than we'd anticipated, but I didn't want to stifle debate in such an important matter. I thank your officials as well for being in attendance. We now move to agenda item 3. The committee will now consider motion S5M-03997, in the name of Andy Whitman, asking the local government community committee to recommend that the non-domestic rate of Scotland order 2017 be annulled. To set out the procedure, Andy Whitman will first speak to and move the motion. There is an opportunity for members to debate the motion and, cabinet secretary, to respond for up to 90 minutes. Can I put on the record here that I will not be devastated if it doesn't take 90 minutes? Can I say to the MSPs here, cabinet secretary, that, following that debate, Andy Whitman will be invited to wind up the debate and, finally, Andy Whitman will be asked whether he wishes to press or withdraw his motion. At this point, I invite Andy Whitman to speak to and to move the motion S5M-03997. Thank you, convener. Can I first of all clarify why I have tabled this motion on the non-domestic rate order. Since 1989, the tax rate, the poundage, has been set by central government under secondary legislation prior to 1989, prior to the Conservatives centralising this local tax. It was set by individual local authorities. Since this secondary legislation is considered using the negative procedure, the only means of scrutinising the decision of ministers as to the rate is by means of a motion to annull the relevant statutory instrument. Therefore, to achieve a modest degree of scrutiny, I have tabled this motion. It is not, and it never has been my intention to deny local government these important resources. I should also add, convener, that I took the decision to do this before the recent publicity of revaluations. My intention here is to provide the opportunity for some scrutiny and not as a trojan horse for any wider political goals of other parties. I had originally intended to tabled a motion to annull instrument 2017-9 introducing the small business bonus scheme as well, but decided to take things one at a time. Let me illustrate why that, for example, would also benefit from greater scrutiny. I am engaged with constituents in Edinburgh at the moment to reform the planning regime around short-term lets due to concerns about residential amenity and the accelerating clearance of the residential population in central Edinburgh. I mention that because these holiday-like properties that declare themselves liable for non-domestic rates—and not all do—and that I have looked at so far are eligible for 100 per cent rates relief, despite having tens of thousands in turnover, properties owned by owners often outside Scotland, and because of the instrument that we will pass to another agenda item, pay absolutely nothing to Edinburgh City Council to contribute to the cost of maintaining the city that provides its income. Instead, this Parliament subsidises those, in my view, undeserving proprietors by compensating councils with public funds. That is just one example where, in my view, the small business bonus scheme is flawed, but notwithstanding the merits of any criticism of that, there is no easy means of scrutinising the detail of such policy arising from the non-domestic rate legislative regime. I hope that the cabinet secretary will agree that Parliament should be able to scrutinise relief schemes that involve the expenditure of £100 million. I heard the cabinet secretary at the previous item talking about the opportunities at stage 1, stage 2 and stage 3 of the budget, both through respect. Those are debates and those are not opportunities for detailed scrutiny, and it is scrutiny that I am concerned about. I am also aware that the Barclay review is currently examining non-domestic rates. I expect that Parliament will obviously debate its findings, but I also want Parliament to be given the opportunity for a much more fundamental examination of the non-domestic rating regime. There are much more fundamental questions of tax design to consider that go well beyond the Barclay review terms of reference and, indeed, bring into question the very existence of the non-domestic rating regime, one of the Scottish Government's own economic advisers. James Murdollys has already argued that we should scrap the business rates system. I would like to put on the record that the Barclay review asks one question, and that question is in the public consultation. How would you redesign the business rates system to better support business and incentivise investment? It says nothing about the degree of central control versus more local control. It says nothing, for example, about the range of exemptions that historically existed for things such as agriculture. Those are important things that the Barclay review will not be looking at, and why in this place we need to consider deeper questions about the future of the non-domestic rating regime. Finally, as I mentioned, the Barclay review says nothing about local government per se, but, nevertheless, non-domestic rates are an important part of local government finance. In my view, it should be part of any future review of local taxation. I know that Cabinet Secretary is keen to talk with other parties about how we take forward further reforms on local taxation, and I look forward to those discussions, which can hopefully take place once the finance bill is safely on the statute. However, meantime, can he provide me with some assurance that he recognises that there is a case for better on-going scrutiny of all the variety of secondary legislation that comes into Parliament? We should not have to do motions to null just to get that scrutiny. Secondly, does he recognise that there is also a case—whether he agrees with it or not—that there is a case for returning at least part of the right setting of tax design to local authorities, so that they can take decisions on their own tax base to suit circumstances in their different areas? I move the motion in my name. Cabinet Secretary, do not answer those questions, because there is a debate, and you will have the opportunity during that debate to respond to any of the points made. Do any other members wish to participate in the debates at this point? I think that there would probably be a better way to do those things, but for the committee, the only option to have this kind of discussion and debate was for a motion of annulment, and so that is what we have in front of us. I think that it is disrespectful in a way to the committee to just assume that the committee is not going to press forward with this because of the possible loss of revenue to local government. The reason I say that is because I think that that would then be an assumption that the Parliament would not be willing to schedule a chamber debate in good time. I also look back to what the cabinet secretary said previously, that it would be difficult for the budget to be debated on Thursday or to be voted on without this, but from what the cabinet secretary said it would not be impossible. I am quite sure that I would have confidence that the business bureau would manage to get this to the chamber in time to have it debated and voted upon. The reason that we might want to do that would be for further scrutiny. However, I do also accept what the cabinet secretary said about it being done this way as the normal way to do it, but what I would say is that that does not mean that it is always the right way to do it. I think that some commitment to better scrutiny rather than just through a negative instrument and the only option being for some member of the committee to lay a motion to annul. I do not think that that is ideal at all, so I think that that has to be taken on board. However, I do think that it is rather dramatic to be talking about if we were to annul it then that would be a complete loss, because I do believe that part of the process would be that the business managers could manage to get this into the chamber for a debate and for scrutiny. However, given what has been said, given the points that have been made earlier, if Andy Wightman is going to withdraw, then personally at this point I would not be inclined to argue with that. However, if he has decided to press it then I may well be inclined to vote with that. I think that for the future undoubtedly proposals in relation to that do need to have much greater scrutiny. We know that it is the second largest single source of revenue under the control of the Scottish Government, so it seems wrong to me to simply be disposing of it through secondary legislation and the negative procedure. I think that there has to be rather more discussion and scrutiny, like Andy Wightman, not just simply in budget debates around the chamber, because not all members can participate in those. We know that there is limited time for debates in the chamber, unlike the 90 minutes that we have this morning if we want to use it. That would be the point I would make about it. I think the whole point is about scrutiny. I think it has been good that we have had a debate and discussion about it. Perhaps the committee could have delved a bit more into this in our own budget scrutiny, and maybe that is something that we need to think about for the future as well. I think that it has been a positive engagement this morning, and I will await to see what Mr Wightman sums up and decides. Thank you, convener. Thanks, convener. I won't speak for very long. I do take Andy Wightman's point about scrutiny in general. I think he is right that there isn't enough. It is a shame. He is felt as he has that he has to go down this route in order to get some level of scrutiny, but if we are going to cut to the chase, what is before us is an issue around poundage, pure and simple. I cannot sit here and vote to a null, knowing that that would cost Scottish businesses £108 million. I just think that that would be irresponsible, frankly. There is also, of course, the threat, as the cabinet secretary has said, to local government finances, so we have to be aware of that. I think that, as I said earlier, the right process to follow is to wait for the results of the Barclay review. We know it is going on. That will come before this committee. There will be a great deal of scrutiny, I hope, around that. That is the opportunity for people like Andy Wightman and all the members of this committee to have their say on a future system of business rates. On that basis, if Andy wishes to proceed, I am afraid I will not be voting with him on this occasion. Thank you very much, Mr Simpson. Mr Gibson, thank you very much. A lot of it is just to follow on from what Graeme has said. I do not think that local government really thank us at the time when a lot of them are setting their budgets for throwing a spanner in the works here. I know that businesses certainly will not thank us for the potential loss of £108 million, so I will not be supporting the budget. The issue of scrutiny is an important one, but ultimately what we do not want to do is kill the goose that lays the golden eggs, which are our businesses that rely a lot on some of the reductions in poundage and other reliefs that the cabinet secretary is introducing. Therefore, I do not think that we should support the motion to an all. I recognise that there is probably a wider debate to be had on rates setting, and I welcome the cabinet secretary's comments about that and on whether that should be national or regional setting. However, to agree with colleagues that have already said, I think that we have to allow the external review process to move forward and explore how business rates can be best reflect economic conditions and support growth. The big thing for me today is that I do not think that it should be minimised the profound impact that this would have on the budget setting process, and that £2.6 billion in public spending. Thank you very much. Alexander Stewart. Thank you, convener. I acknowledge where we are in this committee and the opportunity we have to discuss and debate, and I think that it is right that we do have that opportunity in front of us today. However, I have to also understand and take on board that we do have an external review, and I think that that is right and proper that we have that opportunity to take its course. It should take its course. We can then be involved in that process once we have some actions that they want to recommend or some opportunities that they want to come forward. I, like others today, firmly believe that we should be waiting to see what comes from the review at the end of summer and at that stage giving ourselves the opportunity to then put forward and agree or disagree with the review when it comes at that level. Thank you, convener. Thank you very much, Mr Stewart. I am going to take a brief contribution myself, Cabinet Secretary. A defence of where we are just now, I suppose, could be that it has always been done this way, but I think that what Mr White was trying to say is going forward that it would be good to modernise and develop how we scrutinise non-domestic rates. I think that it is also fair to put on the record before the political attention around this. The Scottish Government had already commissioned an independent review on non-domestic rates, so I think that that has to be commended as well. There is perhaps a meeting of minds within the Parliament in relation to modernising how we look at this process. In terms of my position as a committee chair, I was asking the clerks there at what point could a motion to anull have been lodged in this place, given how close we are to the final budget on Thursday. The earliest week of the motion to anull was the 8th of February, is my understanding, because not that long, it would still have been quite a tight time scale to take it to the full chamber and to have a debate and look at alternatives, and that was because of the pipeline coming from the Subordinate Legislation Committee, so perhaps, even if there is no particular change to the current system, we have to think about timings of the process, rather than changing the process itself. I know that there is an independent review of the budget to processes in this place as well, Cabinet Secretary, but that said, in terms of scrutiny, it is a fairly significant piece of scrutiny that we are doing today. I feel as a committee, had we done this a number of weeks ago, I think that that might have been pretty good, I have to say. We did have the option to look at this in some detail during our budget process, we chose not to do that as a committee, that was our choice to do that, so we have to look at our working practices, it's not just a matter of saying what level of scrutiny does the Government or does this Parliament afford non-domestic rates, the committee system has to look at our role within that as well, I think it's only fair to put that on the record and also just to put on the record once again that this committee is now going to do a piece of work in non-domestic rates, we're going to hear from the Barclay review, we're going to get feedback from Government after the Barclay review has finally published and there will be an ongoing piece of work. That sounds like a heck of a lot of scrutiny to myself, so in terms of scrutiny and process, I feel no reason to support any motion to annull, but I suppose even if I did and I don't, it's that figure of £2.6 billion to public services. Whether it's a potential risk or a direct threat kind of does not matter to myself, I would say to other MSPs, I don't think we can afford any uncertainty as councils across the country are setting their budget, it's social work departments, it's education departments in my city and in other MSPs' constituencies and regions, and for that reason I certainly wouldn't be minded to annull today either. That's my final contribution in the debate. I want to give the opportunity for the cabinet secretary to respond to the comments made and then finally for Mr Whiteman to come back in cabinet secretary. Thank you, convener. First of all, I appreciate the comments that have been made in the discussion that we've had on it genuinely. I have not and do not object to the scrutiny. As you have said, convener, I could have answered questions on this when I've appeared at this committee or finance committee or any other place in relation to the budget. The Government published our budget proposals on 15 December and from that point any party or business or other interested stakeholder can engage with the Government on our draft proposals, which are all subject to group parliamentary and political process, concluding at stage 3 of the budget. Of course, there are further SI's statutory instruments where appropriate on any other relevant matter. On a consensual point, I did yesterday agree that I was open to the budget review group, which is an agreement in working between Government and Parliament and experts looking at how the Scottish Parliament's scrutiny and legislative process should adapt to the new powers that we have. Of course, that can, at the same time, look at the existing powers that we have of which non-domestic rates is one very substantial one. I said that I was already open to that and was very proactive around budget review group engagement and how we adapt our parliamentary processes. It made even more significant from the Chancellor's decision to change how they do their budget setting timetables to an autumn budget rather than a spring budget. Of course, this year we will have two budgets. Members will also want to reflect on the fact that the UK Chancellor can propose a budget, essentially, in one day and the scrutiny largely comes there after, where our processes does a lot of the scrutiny in advance of the budget being set. We have to get the balance right. I hope that that covers some of the points around engagement on this issue and normalisation. I think it will be impossible to take the politics, as the convener has described, out of it in that taxes, of course, a very sensitive matter, but one that I would want to make decisions in a research-based, methodical and orderly fashion. That is the approach that I have taken. That is the question, essentially, before us. If this process is wrong now, why has it been wrong for years? It is the same process that has been used for years now. I am open-minded to look at how we can improve it, but I think that members who are new to the process—I am a relatively new finance secretary, new members to Parliament—have put a fresh pair of eyes upon it. I have no objection to that as part of the overall approach. Barclay review has a very specific remit, but it is a self-defined remit, with a key purpose. Of course, this can allow for further consideration, but it would have a local impact if these revenues were not raised and then distributed. A key point that members have raised is about certainty. There is an administrative element to this now that councils need to get on with issuing the bills, if businesses want to appeal that they can do that, but there is certainty in the system to get on with it. The question that is before us is actually just the poundage, not the other matters of great interest, but the poundage. What I have not heard since the day and hour that I published the Government's position is any variance to that position on the poundage. The question before us is the poundage. I have not heard any party say, put it up, bring it down. The poundage seems to have got general consensus and agreement. That is, of course, a reduced poundage of 3.7 per cent. For all the reasons that I have given, that feels like the appropriate balance. Members need to reflect on that as the question before us, not the other matters. It is that setting the poundage and raising the revenue to distribute that could be put at risk by not proceeding with this statutory instrument. I do not want to be too negative because I have tried to be consensual and constructive, but I do find it a bit strange for some members to say, tell me what I am voting against and what you are going to do to fix it if we are actually as reckless to proceed along those lines. As I say, I have conducted myself in an orderly fashion publishing the poundage from the 15th of December, and it does feel to an extent like from some members' point of view an 11th hour bid to look at it again when, in fact, there seems to be no disagreement on the actual poundage that the Government is proposing. For all those reasons, I suggest that we approve the statutory instrument and continue with the budget as it has been working its way through Parliament and being subjected to the appropriate scrutiny. I move to Andy Wightman to respond to the debate that we have just participated with and to press or withdraw S5M-03997. Thank you, cabinet secretary. I have heard what the cabinet secretary said, and I want to put on the record that I have no criticism of any of the actions that he has taken. The processes that he has adopted have been strictly in line with the legislative requirements here. I have to be perfectly frank. I do not know whether the rate that he is proposing is the best rate or the rate that he was the best rate last year. I am not in a position to do that, because I am not availed of all the evidence and the analysis that the cabinet secretary has had last year to arrive at that new rate. My motive has been solely to try and have a bit of scrutiny about how that poundage is set. What is the process? What are the considerations that come into play and how does he arrive at the figure? Once that figure has arrived at it, I may or may not agree. The second point that has been raised is the Barclay review. I repeat the comments that I made in my opening remarks. The Barclay review has a limited remit. I do not actually agree. It is not the kind of remit that I would have given a review of non-domestic rates. It does not look at some of the issues that I, for example, are interested in, and I hope that we can return to some of those issues in Parliament in future. I repeat my opening remarks. It has never been my intention to put those revenues at risk, but, although the rate is set by a negative instrument, the only way of formally having any scrutiny on the legal instrument is a motion to null. However, I realise that this is very late in the day. Stage 3 of the finance bill is tomorrow. I have heard what the cabinet secretary has said on that, and in those circumstances I withdraw my motion. We have to seek the approval of the committee. Are members content for Andy Wightman to seek to withdraw his motion? That is agreed. As the motion has been withdrawn, that concludes our consideration of agenda item 3. I thank the cabinet secretary for attending, and your officials, of course. We will give a briefly suspect just until we our witnesses leave. Welcome back, everyone. When I move to agenda item 4, which is still subordinate legislation, the committee will now consider two negative instruments that are listed on the agenda SSIs 2017, forward slash 9 and 2017, forward slash 22. Those instruments are laid under the negative procedure, which means that their provisions will come into force unless the Parliament votes on a motion to null the instruments. No motions to null have been laid. I invite members to make any comments that they may have on the instruments. Mr Wightman. I have quite a lot to say about the non-domestic living Scotland regulation 2017 SSI 2017 slash 9, but I do not intend to say it merely to draw committee's intention to comments that I made on the previous item of the agenda. The comments that were made by the STUC reflected in the finance committee's report on the draft budget. Given the limited opportunity for detailed scrutiny of the regulation, I will not go into the detail, but merely to note that there are issues there that need further proper scrutiny in future. Thank you. Are there any other comments? Can I invite members whether the committee wishes to agree that it does not wish to make any recommendations in relation to either of those instruments? Thank you very much, and we now move to agenda item 5, a little bit later than scheduled. The committee will now take evidence in the Scottish Government's draft climate change plan, RPP3, from the Minister for Local Government and Housing. This follows two sessions held with key stakeholders at the past two meetings. Therefore, I welcome Kevin Stewart, Minister for Local Government and Housing. I also welcome his officials that have enjoyed them today. Stephen Garvin, Head Sustainable Housing Unit, Better Homes Division and Gareth Feeney, Policy Manager Sustainable Housing Unit, Better Homes Division Scottish Government. Can I ask the minister whether he has any opening statements that he wishes to make? Yes, please. Thank you for inviting me here today to talk about the draft climate change plan, which sets the Scottish Government's policies and proposals for meeting Scotland's climate change targets. My portfolio includes responsibility for domestic energy efficiency in all tenures, local government planning and, of course, standards for new buildings. Mr Wheelhouse's portfolio leads on renewable and low-carbon heat, but it is important to see energy efficiency and low-carbon heat as a single package, and that is why we have brought this action together under Scotland's energy efficiency programme. Climate change is one of the most important issues facing the world today. In 2009, this Parliament voted unanimously to pass the Climate Change Scotland Act and we have been working together since then to reduce emissions and to meet the very challenging targets set by the act. We are making good progress. We have already massively reduced emissions in Scotland down 45.8 per cent since 1990. This progress is reflected in the residential sector, where the share of homes with the top three energy efficiency, EPC, Bansi or Better, has increased by 74 per cent since 2010. Since 2009, we have allocated over £650 million to domestic energy efficiency and, set out in the programme for government, we will make available half a billion pounds over the next four years to tackle fuel poverty and improve energy efficiency. As we go forward, Scotland's energy efficiency programme, or SEAP for short, will be the cornerstone of our approach to reducing emissions in the residential sector. Once fully operational, it will be a programme of sticks and carrots, bringing together grants and loans with advice and information backed up by standards and regulation that help to create demand and drive improvement. The programme is being developed and we are consulting on policy options until 30 March. In addition, last week, on a visit to Dalmarnock, the First Minister announced that we are making available a further £11 million of funding for councils to make homes, public buildings and businesses more energy efficient. The second wave of SEAP pilot fund will help local authorities test new and innovative energy savings approaches and, together, the consultation and those pilots will inform our long-term approach to delivery of SEAP, which will commence from 2018. I welcome the committee's scrutiny of the draft climate change plan and I look forward to your questions today. Thank you, convener. Thank you very much, minister. I will move for an opening question to Graham Simpson. Thanks, convener, and thanks minister for attending. We've had a number of submissions and we heard from witnesses last week around the perceived, well not even perceived, lack of actual policy in the climate change plan. The plan has emissions reducing it twice the current rate over the next four years, but it doesn't seem to have any new policy or money to deliver that, which doesn't seem to me to stack up. Are you going to be introducing new policy or funding or are existing policies just going to make do? As I said in my opening remarks, we're currently looking at those situations. Beyond that, we're about to embark in a very short course next month on consultation and how we deal with energy efficiency in the private rented sector. That will also outline what we are going to do in terms of owner-occupied properties. For real transformation in this, we need to integrate tools such as the use of new incentives, standards and regulation. Of course, the most important thing is behavioural change. Supporting that with advice and information services and underpinned by strong supply change with the right skills. The cornerstone of what we are about to embark on to decarbonise Scotland's building stock is Scotland's energy efficiency programme. We've set out the strategic vision for 2050 that Scotland's buildings are near zero carbon by that date. We want to ensure that this is dealt with and achieved in a way that is socially and economically sustainable and adopted the challenging policy objectives that we've set out in the climate change plans. We recognise without any doubt that those are challenging targets. We've been very clear that we do not have a preferred option at this stage, and the approach will likely vary across elements of the programme. We're therefore now asking stakeholders what is the best way to deliver the vision and the objectives of all of this. While we develop SEEP, our existing programmes continue to deliver measures on the ground, helping folks to make their homes warmer and cheaper to heat. OK, so that kind of backs up what I was saying that the document is called a plan, but it's not really a plan, it's a vision. A plan would be backed up by specific actions that would get to the targets that you've set. I mean wanting buildings to be near zero carbon, but you haven't actually said how you think that would be achieved. Convener, I would reiterate the fact that we already have a number of things going on in the ground in terms of energy efficiency right across Scotland. I would encourage the committee to go out and see some of the work that's being done on the ground, whether that be the delivery of SEEP's programmes at a local level or looking at the work that Warm Home Scotland is undertaking right across the country. I think that one of the key things in all of this is that it would be a mistake rushing to one solution or a limited amount of solutions at this point in time to deal with this plan over the piece, because we can see technologies changing as we progress. So what we are doing, what we are embarking on, I think, is extremely pragmatic. We will continue on dealing with the energy efficiency programmes that we already have, which have already seen a huge amount of interventions in homes right across Scotland. We intend to ensure that the role of energy efficiency as a whole, which is largely being concentrated in the social sector with some interventions in private housing. We want to make sure that we get the private rented sector scenario right, and that's why we're about to engage in that consultation and then move into owner occupiers. I think it would be very wrong of us to outlay a complete plan of every single action that is likely to be taken between now and a couple of decades away, because we are seeing those changes in technologies taking place. If we were to rush in to one technology change, that may actually be the very, very wrong thing to do. As I say, I think that we are being pragmatic and logical in applying common sense to our approach. Of course, convener, what we want to do is to ensure that we consult with all stakeholders to make this ambitious plan its targets a reality. Is that okay for now, Mr Simpson? Absolutely. Of course, there are other specific areas that we'll delve into. We're going to look at some of that. Can I reassure the minister that the committee has been out and about across the country looking at various initiatives on the ground. I myself was at Coup Housing in Glasgow looking at a biofuel community heating solution there, and one of the comments that they made while I was asking them about how what the lifetime span was of it, I think it said 15 years or so, and I pointed out to them that the same is like the rental income paying to sustain that about replacing it 15 years time. When they made the point, well, I have no idea what the technology is going to look like in 15 years time, so we have to be flexible in our approach to what we're going to do going forward. I thought that was quite a good example to illustrate of the committee. It might be an opportunity, we're over tight for time today, but do you want a couple of minutes to put on the record that visit, Mr Simpson? Very briefly, myself and Andy Wightman went on a visit to AIR, and we saw one of the area-based schemes where they're basically applying insulation to the outside of buildings, and I hadn't actually realised, it was very informative, but I hadn't actually realised how many buildings in Scotland require that kind of treatment. I think it's about half a million. It's a massive number, so it was a good thing to see, and I think it's, you know, area-based schemes certainly are the way forward. I'll certainly come on to the details of that. Can we just leave that hanging low? What I wanted to do is reassure you when you mentioned that the committee should go out about what was happening in the country just today, should we are actually doing that, minister? We'll move to our next question, Ruth Maguire. Thanks. Thanks. Good morning minister. In the written submission to the committee Food for Life Scotland highlighted the role that local government procurement can play in supporting, they were specifically talking about low-carbon food systems. I'm just beginning to hear to what extent the Scottish Government expects the public sector to maximise these opportunities to reduce climate emissions as part of their own procurement. I think that I'm probably going to hark back a little bit to my own time in local government, where Aberdeen City and Shire established a joint procurement unit. I think that there was a great fear from many folks then that the emphasis would be on buying the cheapest possible product from wherever that may be, but a real bit of common sense came into play there, and I think that local suppliers are a key. I think that many local authorities, including in Ayrshire if I remember rightly, are very careful in terms of procurement of the likes of food from local sources. While it's not for me to dictate, I think that it would be wise for every local authority to look very carefully at where they are sourcing those kind of products from. Beyond that, in terms of some of the policy that government has put forward in recent times, the committee will be very well aware about the emphasis that was put in allotments in the community empowerment bill, which took up an entire section of that bill. There was probably more debate about some aspects of that than many other parts of the bill. The conversations that were then had were not only about that but about food sourcing from local sources in general. I think that that is a really good thing. I would certainly encourage local authorities to look at the best practice that is happening out there in certain places around about those procurements. I would certainly do everything that I possibly can to facilitate and export the information about that best practice. Can I just check, minister? Obviously, you can't compel local authorities to do it, but is there procurement guidance that is specific to making sure that, if they follow that closely, they will not be compelled to do the best practice, but they will seek to follow the guidance so that the output will be the best practice. Is there specific guidance in relation to that? In terms of the energy efficiency aspect of this, the Government launched the non-domestic energy efficiency framework in March 2016. That framework has been designed to support public and third sector organisations to procure the likes of the retrofit work that Mr Simpson and Mr Wightman have seen in air. The economies of scale and the standardised approach offered by that pan public sector framework is attractive to both the public sector and the private sector and offers better solutions and better value for money. One of the things that I have seen on the ground in terms of energy efficiency is that, in some places, at the initial stages, some local authorities find it very difficult to find contractors full stop. Orkney had great difficulty in bringing folk in to deal with their external cladding situation. The Government has been pretty flexible about this as well, because the normal situation would have been that, if you do not spend the money, you will get clawed back, but we allowed them to recognise the circumstances to keep the money that was available to them. They have eventually managed to procure and, of course, are building up local skills to continue that project. We have got that framework there. We have also got to allow a level of flexibility and understand that, although it may be easy to get workers and contractors to do certain things in certain parts of the country, that is not so easy in others. However, there are huge opportunities in terms of some of that, because it is offering up the ability of skills to occur in places where that has not happened before. That would be helpful. It would probably help if the committee is not a question minister. If he could be right to us and give us information on how you, because you said that you got a desire to see best practice, how you promote information exchange between the local authorities in relation to that best practice, and what the elements guidance plays within that, or the ability to improve on the guidance, that would be quite helpful for the committee. There have been some concerns expressed about the lack of engagement with communities during the development of the draft plan. I would like to ask what the Scottish Government is going to develop as the plan becomes the finalised plan as to how you are going to see how you can further engage with communities. I wonder if, convener, I am not trying to be awkward here in any way. Can Mr Stewart give us examples of where he feels that that engagement has not been at its best? I have been like others in the committee. We have gone out to visit and see, and there are certainly projects taking place on the ground that we can all visit and see what happens. However, when we are looking at specific locations across Scotland and some organisations, one would have expected to be part of the process and have not been engaged as much. There is a feeling that there has been a lack, Minister, about that. We have an opportunity now before the draft becomes the final plan to go back and engage with some of those organisations that we maybe would have thought. We got some of that evidence when we had individuals here that felt that, too. There is a feeling that there has not been enough done so far, and that needs to be developed as we go forward. In the briefing prepared by Spidey for this particular evidence session, the Scottish Community Alliance highlighted its concerns and the written submission to the committee at the limited community engagement and developing the plan. It said that, today, active engagement with communities on this agenda has been limited. We see that this is a missed opportunity to capture the energy, tourism and ingenuity that is here in all of the places that we live. That is only one submission, of course, Minister, but that was the example. I am very keen, convener, as I am in all of the areas that I am responsible for. The Government as a whole is always keen to consult as much as possible and hear what communities and stakeholders have to say. I said earlier on that one of the things that we are going to have to do is to ensure that there is massive behavioural change out there. In order to facilitate that, we are going to have as much communication as possible with everyone around this extremely important agenda. I will take what those folks have said, and we will have a look at that. There are a number of things that are going on at this moment, in time, even down to household levels. We are funding Home Energy Scotland, which provides advice and support to households, including about their energy-saving behaviours. I have gone out a fair bit to look at what is going on in the ground and hear what is being said by folks. That is helping. We all have a job to do in terms of that behavioural change, but others, including a pilot that we are running with EST, which is trying to find new ways of embedding that behavioural change, is extremely important. I will take on board what Mr Stewart has said, and I will have a look at what communication is going on and how we are dealing with that. One of the key things, convener, in all of us always is that it is a job for all of us in this place and beyond to try and persuade folk to respond to consultations. I know that sometimes they are not the easiest documents to deal with, but I have to say that, in terms of the online consultation that we have been carrying out in recent years in various subjects, they are quite easy to navigate. We probably should do more to say to folk that they do not have to answer every question. If there is something that is not there, you can have your say. We have had stakeholder events that were held before Christmas on the draft plan and on Seap 2. I will have a look and see who attended those and what we can do to encourage more people to become involved. It is vital that we get as many folk as possible—all of the folk out there, in fact—on this agenda so that we can move forward with this ambitious plan and get that behavioural change that we need. Thank you, convener. Thank you very much, Mr Stewart. Thank you, minister. We have a supplementary from the Lade Smith, and, to let and to invite me to know, I will be taking him next for a question. Thank you, convener, and welcome along, minister, this morning. You mentioned individual actions. We had a submission from the Smart Energy GB about smart meters, so I just wonder if that might be an appropriate point for you to say something about smart meters. My further question was, I recall, reading that summons question. No, it's not. Please continue. I thought I'd stolen someone's question there. But also on boilers, minister, I thought I might be read somewhere about a window of opportunity or a seven-year window for changing boilers, but I wondered about that and whether that means households have to replace boilers, what the incentives to do that. I know these are specific, but they're about the individual actions that you mentioned when you were responding on communities. I'm probably going to take Mr Garland in at this point on smart meters, if you don't mind, convener. I'll see what I can do on that. Certainly on the smart meters roll-out, there is definitely an opportunity there to look at the fact that there's going to be interventions, people going to everyone's home, coming in, and the opportunity to link that to work we're doing on energy efficiency and the wider climate change approach. That's something we're looking at in terms of what that opportunity is. The energy companies are dealing with that in different rates themselves, but it's something that government are aware of. Mr Wilhous is something that he has looked into and has discussed with energy companies. I don't have specific details in terms of what's planned on that, but it's something that's on our agenda. In terms of the seven-year window for boilers, I'm not so sure on that one, I'm afraid. Maybe I'll deal with that. I think one of the things that we've got to recognise is that our future energy mix is likely to be different from what we are familiar with today. Working with partners, we'll consider what the most appropriate solution is, including district heating, electric heat pumps, biomass or the repurposing of the gas network to supply biogas or hydrogen. We'll put forward much more detailed proposals on how we'll realise significant heat decarbonisation in a subsequent climate change plan. Ms Smith mentioned the seven-year window she described it as. We're continuing to develop delivery mechanisms. For example, I think the most recent call on seat delivery programme pilot costs for projects will help us deliver programme pilots for these kind of options. Those include projects that are taking an area-based approach to renewable heat technologies in off-gas grid areas. As part of the seat programme development, we're going to carry out a high-level policy scoping consultation on district heating regulation and a potential duty on local authorities to develop local heat and energy efficiency strategies. That will give us a solid foundation from which to decarbonise the heat supply of our buildings in the futures. It's worth remembering that around half of non-domestic buildings are already supplied using electricity. That means that there will be little or no change there. However, like every other procurement in your own home or wherever it may be, you've got to look at the lifetime costs of what you're embarking on. I think that's one of the things that the convener himself picked up on in terms of his visit. During the course of this, there may be those technology advances that those folks have rightly pointed out. I hope that that's helpful to Ms Smith. Policy outcome 1 in the climate change plan envisages improvements to the fabric of Scotland's domestic buildings, resulting in a 6 per cent reduction in the heat demand by 2032. I've been seeking to understand this figure a little bit better to know whether the 6 per cent is a reduction on the aggregate demand now or a 6 per cent reduction on the aggregate forecast demand in 2032 or a reduction in the per unit, per square meter residential unit. Heap demand, can you help me? There's some very complex questions there from Mr Whiteman that I would expect. I understand that he asked some similar questions at the economy committee the other day. The scenario on demand, and I'm looking to Mr Garland as I say this just to get this absolutely right, it's demand based on 2030, am I correct in saying that Mr Garland? It's based on where we expect demand to be 2032, but I think you also had asked questions in terms of what that position will be in 2032 and we've undertaken to write to you following written questions from the economy committee and we'd also obviously would share that with this committee as well. I have a list of questions that you asked at the economy committee, Mr Whiteman, and I understand that officials who were there agreed to write to that committee with more detailed responses to Mr Whiteman. Convener, if it's okay with you, I will ask that this committee also gets those detailed responses so that you have the same information as the economy committee around about some of those areas of interest to Mr Whiteman and others. That would be very helpful, of course. I can't preclude Mr Whiteman for wanting to re-ask those questions if he's so choosy. Are you content with that, Mr Whiteman? Yes, we're short of time and I intend to move on, so thank you very much for that. We've heard evidence from organisations like the Sising Homes Alliance who say that, quote, there's a credibility gap in the near term in terms of the goal of decarbonising and increasing energy efficiency of domestic buildings. One of the reasons for that credibility gap is the lack of very specific, clearly targeted policies with numbers attached about carbon with timescales and with budgets. I hear what you said earlier about maintaining flexibility, and that's perfectly reasonable. One of the most straightforward ways of building in targets would be to adopt a target of getting vast majority of homes to EPC band C by 2025. That would be a very specific, very time-limited standard. Are you open to reflecting that in the final plan? Convener, I've been looking with interest at some of the things that have been said by stakeholders, including the existing homes alliance. Elizabeth Leighton said that the ambitious targets for the residential sector and energy efficiency and renewable heat are welcome, but she talks of ramping up what we're doing. One of the key things for me and all of this, and I go back to my point from earlier about what solutions are going to be available. Obviously, there are things that we're going to do anyway in terms of the insulation work and the kind of work that Mr Simpson and yourself and Mr Wightman have seen in air. We will continue in that regard. In terms of the EPC band C scenario, I've already said that we have an ambitious programme that is going to help to transform the built-in environment. It will cut emissions as well as making it easier and cheaper to heat. We will see a reduction in emissions from the residential sector by 75 per cent on 2014 levels. At the same time, we have to ensure that poor housing is no longer a cause of fuel for poverty. On EPC band C, a one-size-fits-all target may not be appropriate for something as diverse as our housing stock. We are seeking views on target setting and consultation on-seat, which, as I've already said, is open until 30 May. In some regards, we have to be completely and utterly realistic about some of those things. Some of that is not as simple as we may think. I was struck by that lesson in a visit to, again, Orkney, where they were talking about some of their housing stock. They have had a slow start in some regards, but they have done very well. However, they were quite honest about some of the housing stock that was in the council's control, where they said that it would be impossible to ever get some of that property up to EPC band C. They were talking about housing that they had in their stock from the Napoleonic era, in which the interventions that they would have to take would probably negate anything at all. We have to be realistic about generalising about that particular rating target. We will look at what comes back in the consultation, but we have got to be aware that, out there, there are many buildings where there are anomalies. To say that we should aim for a uniform EPC band C is probably unrealistic. Thank you. I understand that. I do not think that anyone is arguing for absolutely every single building. We have buildings that go back to predating the Napoleonic wars, as it is a question of the vast majority, but that is helpful. Finally, I asked a question on the owner-occupied housing and private rented housing. You indicated earlier that you would be consulting on the private rented housing. You were not as clear as to precisely what the nature of the consultation on the owner-occupied sector would be. I note, for example, that regulation of the private rented owner-occupied sector has been long-promised. The powers that are in the climate change act in 2009 featured as a potential enabling measure in RPP 1. It was included as a concrete proposal in RPP 2. It was developed with stakeholders to detailed pre-consultation through the REAPs working group in the last Parliament. I am concerned that, given all of that work, given where we are and how ready we are to do that, that the forthcoming consultation will just be kicking this can further down the road. The consultation on the private rented sector will be published next month. We will give a timescale at that point about owner-occupiers 2. Some of this could have happened before, but, due to the UK Government changes to the funding landscape in 2015, Scottish ministers reluctantly took the decision to postpone that consultation on minimal standards in 2015, because the funding situation was so uncertain at that point. However, we will publish the private rented sector consultation next month, and we will give at that point timescales about owner-occupiers. That is not kicking things into the long grass. That is actually dealing with this next month. Yes, next month you will produce a consultation on the private rented sector. Are you saying that, in that document, you will have a timescale for future consultation on the owner-occupied sector? We will give timescales of what we intend to do in owner-occupier situations at the same time. I look forward to it. Thank you, Mr Wightman. I know that there are a couple of supplementaries tied in that a couple of committee members had. I will take Helene Smith first, then I will take Graham Simpson. Thank you very much, convener. Just specifically on the question that Andrew Wightman asked, Minister, could you tell us about the policies that are going to result in the doubling of insulation measures in 2018? What would those specific policies be? Also, I was frantically looking through my papers there, but we had some evidence to suggest that the materials used for insulation might not be environmentally friendly. I do not know if you or your officials have any comment on that. Let me take Mr Garland in and about the materials, because I am not exactly sure about that, to be honest. It is not something that I have heard directly either, so we are very pleased to get further information on that and we can respond to you directly. Also, the targets for 2018, the specific doubling of insulation measures? We are currently delivering over 80,000 measures per annum. The planet itself sets out from 2018 90,000 measures, which will need to be installed per annum. Those measures were limited to loft, wall and cavity and solid insulation. However, in reality, we deliver a much broader set of measures, including, for example, heating systems and controls, floor insulation and glazing in certain parts. Currently, across the schemes, in the region of about 80,000 to 90,000 are delivered per annum. About half of those are wall and loft insulation. It is true to say that the efforts in loft and wall insulation will need to double the plan. Of course, in terms of a lot of the interventions that have taken place, we have seen a huge amount in the public sector and not so much in the private rented, our owner or occupier sector, so that is where we will have to move on. Seep, of course, will be the delivery mechanism for all of our efforts in terms of energy efficiency. I think that, while it is no small undertaking, we have the ability to make those situations become reality. We will work out, work up all that needs to be done through the Seep programme that we are putting in place. I can advertise this enough, convener. That consultation is open until the end of May, and we are keen to hear from all stakeholders about what they think of the proposals that they are making. You mentioned the EPCs earlier on. We heard some evidence last week that the whole system of EPCs is flawed. They are not particularly accurate. Two people assessing a property can come up with varying results. I have certainly heard that the system discriminates against homeowners in the off-gas rural areas. Given that, do you have any plans to reform the EPC system? I will take Mr Garland in initially, convener, if you do not mind, please. There is a process for looking at what are the issues that are raised in terms of the use of EPCs and certainly the underlying assessment protocol that is used for that. That is something that the Scottish Government has been looking at over a number of years and collating issues such as those EUAs. We have a process in which we engage with the UK Government to ensure that those issues are picked up. It is very much part of the issues that we are looking at within the development of CEP is making sure that we have an assessment process that is fit for purpose. We are looking at taking into account issues that may be with our assessment processes and building that into the programme. It will be one of the things that is raised in the consultations that we will be bringing out on regulation and we will look at that issue. Convener, if I can come in now, assessment methodologies are part of the consultation on CEP. As I go out and about, you hear different opinions about whether things are good or bad or whether assessments are right or not. I would encourage folk to respond to the consultation. I also feed back to officials the things that I hear when I am out and about. I was in Shetland on Monday and one of the construction firms there talked in some depth about CEP and felt that there were some failings. When I hear those things, folk give me examples of where they think that things are not quite right or maybe not quite right for their particular area for various reasons, including geography and access to grid. I always feed that back in. For those situations, I have been sent to folk to feed into this consultation. The more folk who bring up the anomalies that often exist, the easier it is to deal with some of those anomalies. I am thinking that we could have a Scottish system of EPCs. It does not have to be UK-wide, does it? It is to do with compliance with the European directive in terms of whether they should or should not be a Scottish version. That is something that we would need to take a view on. We do not have a view on that at the moment in terms of whether or not they should be one. It is an understood process in terms of assessing what a building's performance is, but it is certainly one that is understood to have flaws. We are looking at how to bring that forward in terms of improving it. Given that we all seem to accept that it has flaws, maybe it is worth considering having a Scottish solution to something that we know is not working. I would not go as far as to say that it is not working. I am not a verse to looking at change where change is required, but I think that no matter what, if you were to put in another universal system, there are likely to be some anomalies because of particular circumstance, I would say. Obviously, as I have said, wherever I hear of any difficulties in this regard, and they are, they are pretty few, it has to be said. I feed that into officials, but I think it would be very wrong of us to say that the system is flawed. Paul, there may be some anomalies. I do not think that you could go as far as to say that the system is completely flawed. I would like to see that Graham supports independence for the PC's, it is a start. Minister, good afternoon. In its submission to the Scottish Federation of Housing Associations, it said in a quote that funding for low-carbon heating should be concentrated in off-gas areas with a target to have renewable and low-carbon heating in all off-gas areas by 2025. Obviously, in my constituency, I have two islands, Cumbria and Arran, and both of those are off-gas areas. I am just wondering what the Scottish Government proposes to do in terms of addressing that aim. David Stewart of the Scottish Federation of Housing Associations was the one that said that. I am very aware of the difficulties that are faced currently in off-gas areas. In particular, take a nice and sit in some places that are off-gas island communities, the cost of electricity is much higher. Obviously, one of the things that we are very keen to see is the use of other technologies to ensure that we do our very best. In Shetland, on Monday, in Orkney, where else have I seen them? The use of low-carbon heat options, using heat pumps in particular, is quite something. I visited a new scheme by the Yatwnd Housing Association at the old Met Office site just outside Lerwick on Monday. I was asking about the heat pumps that they were using. In terms of the technology that is being used there, the cost of that technology now, compared to what it is, and the outcome for homeowners is the right way to go. I think that those technologies will improve as we go on. In terms of those off-gas, off-grid areas, that is the way forward, I would say. Unless, of course, there is a mass. Again, if we look at Lerwick, it has the district heating scheme there, which works very well for large parts of Lerwick, but not those folks outside. There are huge opportunities now for folks who are off-grid that did not exist before, and we have to recognise that, and we will build on that in terms of the seek framework. Thank you. Some of the fuel that is used on our islands at the moment include oil-based solutions, so we want to try and get away from those. He always talked about innovative technologies and the opportunities that are available, but it sounds about, frankly, piecemeal as a strategy to deliver comprehensively in these communities, as the SFHA are suggesting could be done by 2025, which is eight years away to try and harness those technologies and produce them. Obviously, you get economies of scale if it is being done on a more strategic level rather than hoping that some individuals will and some individuals will not, because we could find ourselves decades from now and it is still a major issue in some of those communities. I think that one of the key things in all of this, convener, is getting all of our partners to come on board in helping deliver, because the experts in what goes on in island and very rural communities are the locals themselves and the local councils. In terms of working out plans to deliver, I would expect local authorities, such as North Ayrshire, to help to come up with innovative plans to help to deliver those solutions for people. Obviously, the seat pilots that we have announced—I talked about the second pilot that the First Minister announced last week in Del Marnac—is being led by local authorities. It is them who are receiving the cash and it is them who are driving forward projects. I would be very keen to see all authorities bidding for a share of that, of course, with the right schemes. I also see no reason why the likes of North Ayrshire should not put forward some kind of innovative plan for the likes of the Cumbres. Mr Prydman, you were going to explore some more questions around this policy outcome theme before moving on to planning. I do not want to do that now. I have one more that I would like to add. There was a concern that low-carbon technologies can be expensive to run and maintain, and therefore there can be a relationship between low-carbon technologies and fuel poverty, unless we have other measures such as energy efficiency measures right within properties. I think that it was the SFHA that raised some concerns in relation to that and evidence of interest today and the reflections that you have on that, Minister. If I go back to what I said in response to Mr Gibson, new technologies are often expensive to start with, but costs go down. There is the volume aspect of it, too. Now, as we move on in terms of our ambitions to decarbonise even more, we are going to have to use more of these new technologies. If we look at lifetime costs of a technology, I would ask folk at this moment whether it is worth your while putting in something new in terms of an old technology that might be inexpensive at this moment in time. What is the lifetime cost of that going to be compared to putting in a new piece of kit, which will last much longer in terms of the changes that we will see? The plan itself is pretty good in the fact that a lot of the new technologies that we hope will come into play, and there may be even different technologies by the time we get to that point. We will see them advance as we go on. There are things that we are not doing here in the UK at the moment, which are being done elsewhere, where there is a level of testing here that is only just starting, like hydrogen technology, for example, where there has been a move fast enough. The UK Government of course controls the gas networks, and there is an H21 project in Leeds, which has not moved very far at all. Other places are looking at putting biogas and hydrogen into their gas networks, and we are behind that. We do not have the power here to deal with that ourselves and are reliant on others to bring some of that forward. We will continue to encourage that. That hydrogen technology, that biogas use, is not likely to happen in the first phase of this plan, and that is why we have laid out the plan in the way that we have. The initial point that you made is cost now, compared to— I do not know if you have addressed that. Scottish Federation of Housing Associations have said that the plan could be strengthened because of the expense of low-carbon technologies in relation to improving energy efficiency and reducing fuel poverty. The SFA has said that perhaps the plan could be strengthened in that area. Do not expect to see how it should be strengthened just now, Minister, but is that something that you reflect on because we have to report on that plan? I hope that the Scottish Football Association will be as interested in decarbonisation and everyone else. Let me put it quite simply. The reason why we are focusing on energy efficiency in the early years of the plan is because there may be a situation where folk are uncomfortable about the technologies and all the rest, which we can deal with at a later date. Dealing with the energy efficiency aspects of it also means that properties are then ready to be converted to low-carbon heat. As well as helping to reduce bills now, it also helps to mitigate any energy price rises in the future. It is really important that, in terms of the decarbonisation of our built environment, that we do so in a way that is socially and economically sustainable. Obviously, convener, as you know, I have a responsibility for fuel poverty too, so all that has to interlink absolutely right so that we can do our very best for people and ensure that they can live in warm homes in a good environment. I would leave time for the planning section, but that last section said that it was helpful, because, if the SFHA has said that perhaps the plan could be strengthened in relation to the link that you have just put on record between getting the right energy efficiency measures and tackling fuel poverty, if we can get something in relation to that at a later date, that would be quite helpful, because we have to respond to all the evidence that we receive and I think that you were hinting towards it there. I am more than willing, after the consultation on SEPA is finished with and after the analysis is done, I am more than willing to come back to the committee, because obviously the consultation is going to have to take cognisance of stakeholder views and other views that come in. I think that the key thing in all of this, and I am parroting again, is to get as many views in the consultation so that we can create the best possible plan, the best possible means of delivering the aims of that plan. Thank you very much, minister. We will move on to the next section now, Mr Whiteman. Thank you, conveners. To move on to planning, the draft climate change plan just has one page on the planning system. It opens by saying that, ensuring the planning system supports decarbonisation is another essential element of the Scottish Government's approach to meeting the statutory climate change targets, and yet it does not say anything about how the planning system could do that. At the moment, the objectives for decarbonisation and mitigating climate change are contained in the national planning framework. Are you open to the prospect of, in the forthcoming planning bill, embedding the need to decarbonise and move to low-carbon society as a principal purpose of planning, given the role that planning plays in terms of designing places and standards and transport modes across Scotland? Planning already has an important role to play in reducing emissions and adapting to future climate change. First of all, we have to locate development in the right place to provide the opportunities for folk to make sustainable choices and to improve their quality of life. We are helping aid the transition to a low-carbon economy, including supporting diversification of energy infrastructure. Before I came in here this morning, I was reading a tweet about the Cabinet Secretary for the Economy, Keith Brown, addressing a conference this morning where he was talking about cities taking the lead in decarbonisation. Planning also has to set the environmental limits. We also have to ensure that transport and digital infrastructure are delivered by the planning system. Planning largely focuses on new developments and change of use and strategic plans. It does not concentrate on existing buildings. A lot of the work that we have to undertake in delivering here is on what currently exists. As Mr Wightman well knows, we published our planning consultation earlier on this year, which goes on until April 4. I am keen to show that planning can guide sustainable communities and to support the development of low-carbon infrastructure. The document confirms that the national planning framework should continue to bring together Scottish Government policies, including on climate change. I understand where Mr Wightman is coming from in planning as a tool to achieve a number of those goals. I do not disagree that it has a great part to play, but I think that a huge amount of what we have to achieve is changing existing buildings and places to get to the place that we need to be in terms of decarbonisation. That is helpful. Obviously, this conversation on planning has some way to run. Is that on planning? Is that on planning, but if Andy Wightman is staying on planning, I could ask that after. Yes, a brief further question on planning. This is a very particular one, minister. The planning white paper proposes repealing section 72 of the Climate Change, Scotland Act 2009, which is about local government powers regarding low-carbon projects—alone zero-carbon projects—in local development plans. The Scottish Government's sixth annual report on the operation of section 72 of the Climate Change, Scotland Act 2009, which was published in March 2016, concludes that the Scottish Government has concluded that the legislation should remain in force. What is your view? Mr Wightman is right. We want to remove planning procedures that do not add value. The climate change plan is clear that there is a further role for reducing building-based emissions. In significant part, this is around energy use for space heating. As currently drafted, section 72-3F has the potential to work against the delivery of community network-based heating schemes, as the legislation itself promotes individual building-based technologies. Obviously, we would welcome comments on these proposals by 4 April, but I am sure that Mr Wightman and others would want to remove impediments that could lead to community-based or network-based heating schemes. If the committee wants further detail on that, I am more than willing to write. It was interesting that, on 22 March, the Government thought that the legislation should remain in force. It has changed. I am open to amending legislation, but I am very concerned that whatever legislation we have already got to give encouragement and powers to local Government to deliver low and zero carbon is not, in any way, diluted. Certainly, if it is getting in the way, that is one thing that I am content to leave it there. I will write to Mr Wightman and the committee on some more depth on it, convener. Obviously, we want to see zero carbon generating technology to be the best that it can be. There is a situation here in which I think that maybe this section is not quite right, but we will provide you with more detail, including about the building standards aspects of that. Thank you very much. Elaine Smith, the final question. Thanks, convener. I just wanted to pick up two of the submissions that we had. We had a lot of submissions, so we have a lot of interest. In two of the submissions and on planning, the first one is the RSPB Scotland, to say at the start of the submission that they consider planning to be central to the delivery of the climate change plan. Further on, they point out that the role of planning and supporting model shift in travel from private car to public and active travel is not covered in the draft climate change plan. They say that there is very little on managing demand for travel or promoting sustainable modes. They then go on to talk about local authorities and the way they could maybe use their support for buses in active travel routes. That is one submission. The second submission was from sustaining Dunbar. They point out that they feel that people in their experience would be happy to make many of the lifestyle changes required to reduce their household carbon footprint. However, they think that people face barriers and perverse incentives, which are the words that they use. They feel that one of those perverse incentives would be flights being cheaper than trains and mixed messages from the Scottish Government on sustainable economic growth. I just wanted to, under the planning issue, put those two particular submissions to you to see if there is any comment going forward. I appreciate that you are talking about consultation and that your views would be part of that. I am not going to get into too much depth on transport, which is not in my portfolio, but I will deal with the planning aspects of that, as Smith has asked. The Scottish Planning Policy 2014 is clear that the planning system should apply a town centre first policy, as the committee is probably well aware. It should take a nice sense of this when planning for uses that attract significant numbers of people. It suggests that a mix of uses should be encouraged in town centres to support their vibrancy, vitality and viability. That is not the easiest thing to say. Maybe we should have rethought that out when we wrote that into planning policy. The MPF III sets out a strategy that reinforces the role of key settlements in towns in more rural areas. It is clear that development plans should promote opportunities for travel by more sustainable modes. There is an order of priority in that policy, which is walking, cycling, public transport and cars. That is the hierarchy of all of that, which is laid out in the policy itself. The SPP is also clear that planning permission should not be granted for significant travel generating uses at locations that would increase reliance on the private car. Where direct links to local facilities via walking and cycling networks are not available or cannot be made available. It goes into great depth about travel to local facilities and even greater depth about transport assessments. That is already built in terms of planning policy. I cannot comment on the individual submissions that you have had, particularly from sustainable Dimbarr, because I have not seen them. However, as I have outlined there, within Scottish planning policy, there is a real emphasis on transport. I hope that planning authorities would be taking cognisance of all of that in terms of the development of their local plans and strategies. I thank the minister for that. Time is upon us. Minister, do you have any final comments that you want to make before we move into private? I am fine, thank you, convener. Just put on the record final that this committee has to finalise a report on this by the 8th of March. If there is any additional information that you want to feed in, minister, you or your team ahead of us finalising a report, that is the time scale that we are working towards. Thank you very much Minister and your officials for coming along today. It has been very helpful and we are now moving into private session.