 Welcome to the 24th meeting in 2015 of the Finance Committee. We appear to be two members down, but neither has given their apologies, so I take it that they will deign to appear at some point. Our first item of business today is to decide whether to items 4, 6 and 7 in private. Are members agreed? As agreed is Richard. Our second item of business is to take evidence on the Scottish rate of income tax as part of our scrutiny of draft budget 2016-17. I therefore like to welcome to the meeting Dr Jerry McCartney, Head of Public Health Observatory, NHS Scotland, Stephen Boyd, Assistant Secretary of the STUC and Ruchier Cann. I hope that I'm pronouncing that correctly. I'll say that every time I see you. I don't know why. I was going to say heavy night last night, but that would be a lie. Ruchier Shah, Policy Manager at the Scottish Council for Voluntary Organisations. Members have received copies of their evidence submitted by our witnesses, so we will go straight to questions from the committee. I think that you all know the drill. Basically, I'll ask some opening questions and then I'll open it to the session to colleagues around the table. The first one that I'll ask about is your own Dr McCartney and other panellists can obviously feel free to comment in terms of this. Each person will be able to comment on their other submissions. Dr McCartney talks about the flexibility of being afforded to the Scottish Parliament in relation to SNIT facilities and its modest changes to income equality. In your paper, you argue that we need enhanced regulation and taxation to reduce inequalities in income wealth and power inequalities across society. Therefore, you say that we would therefore support the introduction of SNIT at a rate higher than 10 per cent. Are you a bit coy on how much higher, so I'm just wondering if you can possibly tell us what kind of rate of SNIT you would think would be appropriate at this time? I'm going to continue to be coy on that point, if that's all right. The basis of us commenting on this might be slightly wondering why a Scottish health board is engaged in this debate at all. Our role in Scotland is to reduce health inequalities and support government and other agencies to reduce health inequalities. Members will be aware that health inequalities in Scotland are wider than anywhere else in Western and Central Europe, and thousands of people die prematurely as a result of that inequality. Health inequalities are driven in turn by inequalities in income wealth and power in society, so we need to do everything that we can to reduce them. We've been tasked by the Scottish Government and by our board to look at the policies and practices that are most effective at reducing those inequalities in health. The basis of our evidence is some modelling work that we did in-house, which looks at the impact of a range of interventions, both health interventions around alcohol and smoking, but also upstream interventions in the economy, including the Scottish rate of income tax. The modelling includes those interventions that focus on financial aspects, including increasing the minimum wage, increasing the rate of social security benefits, such as GISA and income support, but also the use of an increase in the Scottish rate of income tax. That would all be very effective means at reducing health inequalities by providing some redistribution of income to a greater or lesser degree. The more you redistribute in a sense, the greater the impact would be on reducing health inequalities. That's the basis of our evidence, and I'm happy to talk to members about how we did that modelling and how robust it is. I know that's the basis of your evidence, because I've got a paper in front of me, but you still haven't told us why you haven't come up with a sum. One of the reasons we're taking evidence is that we're trying to make recommendations to the Scottish Government as to what SRIT would be. It's not really helpful when people don't come up with a figure, so given what you've said and the fact that you think it should be increased, why have you not said that it should be up to £1, £2, £3 or whatever? It seems to me a bit strange. You made the argument, but you've not… Okay, you can stop just before the finishing line. We were limited in the modelling, so I can only speak on the evidence that we've got available. I can't speculate. That's a clear role that I hold as a public health consultant. The evidence that we've got available to us was based on some modelling done with the University of Stirling, which modelled different interventions in the financial system, including a £1 variance in the Scottish rate of income tax. It's that £1 variance that we were able to feed into our modelling, the triple I model. I can tell you here that a £1 increase in the standard rate of income tax would reduce the relative index of inequality, which is a measure of inequalities in health, by half a percent over 20 years. That's what we've got in the model. You could speculate and say that increases beyond that would reduce it by more, but it's to give some figure that would give you some handle on the magnitude of impact of variance in income. We're certainly looking to do a further range of income interventions in the next phase of the tool, and we'll come back next year in report on that, but we don't have the modelling of the financial implications of different interventions at this point in time. Okay, fair enough. In terms of the overall philosophy that Dr McCartney has spoken about, Rachael, what's your view on that? I mean, from your paper, I would suggest that it seems that you quite clearly agree with Dr McCartney. Just to caveat first, it's been very difficult for us to generate a very wide-ranging discussion within the third sector on this particular topic, because it's so technical, because it's so confusing as well with the various arrangements. We're talking about transitional arrangements coming in before the fuller arrangements that are currently being debated by UK Parliament. Many of our members recognise that, going to the principles, the tax is going to be a difficult balance between simplicity, effectiveness and fairness. Now, the overriding concern for many of our members is the impact of tax on some of the most vulnerable and disadvantaged people in Scottish society, and how much their situation is at the forefront of decisions around the decisions around what level tax is set at. Having said that, with those caveats in mind, and the fact that we have not been able to generate a discussion, we have spoken to our policy committee and to the third sector forum, which brings together some of the sector leaders. Now, there is a clear interest in making sure that tax is going to be accountable and transparent, but there is not much of an interest in at this stage giving advice on what kind of level it should be set at. The only thing that we were able to get some kind of sense of is that people in general that we have spoken to in the sector do not want to see tax reduced from the current rates when the new regime comes in next year. I think that the analysis there is that because of the austerity and the impact on public services, they do not want to see that suffer at this stage at this particular time. There is no particular strong coherent view about whether tax should be raised within people in our sector. I can understand why they would not want to put forward that particular position. There are different people that privately would hold a view whether to increase it or maintain it, but no formal position from the members that we have spoken to about raising taxes. If extra money is raised to the SRT, it must be used to reduce the qualities. In your paper, you also say that politicians and others need to change the conversation around tax in order to make sure that we can build a tax system that is sufficient for the needs of everyone in society. We need to make the case for what taxes for and the positive things that bring to society, as a way to reduce inequality and support social security and public services. In your paper, you say that the Cabinet Secretary for Finance can say that we are going to increase tax to make the SRT 11P without extra money. We are going to make specific stated action to improve the lives of those specific people across the society. I seem to remember contesting the election in 1999 in which that was done and it did not go down particularly well with the electorate. Do you not think that people understand what taxes are for? Do you not necessarily want them to pay it or to pay more of it? I do not think that they do. I think that people are getting confused now. If you think about where taxes are held and at what level, we will be moving into a situation where employment-related income tax is going to be devolved to a certain extent during the transitional time next year, and then, hopefully and possibly towards a broader position when the Scotland Act 2015 is implemented. Savings tax, pensions tax will remain reserved. The situation is so fragmented, it is going to be extremely confusing for the general public. If you think about the people that the third sector supports, some of those who are not even involved in the centre of the discussion, some of the most furthest away from the discussions, it is going to be even more confusing. They will think that decisions will be taken at Holyrood or Westminster, and we will have to live with that. There is a bit of an issue there. The key thing that we are a bit concerned about is when we talk about taxpayers. We almost talk about taxpayers as if you are not a taxpayer, then somehow you are not a valued member of society. This is the kind of thing that many of the people that are our support start to get a bit concerned about. There is a lot of rhetoric going on about how we need to bear in mind what taxpayers do and where taxpayer money is unspent. However, the language can be very selective and disengaging for many of the people that are directly supported by third sector organisations. Stephen, you have said in your paper that the STC is concerned at the impact of a tax increase on lower-wage workers. We had a bit of a philosophical discussion last week as to whether that was indeed the case. We had Lucy Hunter-Blackburn arguing that tax increases would help people at a lower end in relative terms, even with SRIT figures. You have made it quite clear that the Scottish Government should accompany any decision to leave SRIT 10p in 2017 with a comprehensive statement on tax policy in the future. You have said that it should remain the same, but the Scottish Government should explain what it is proposing. However, you have said that it is feasible that in future years the STC will propose an increase in SRIT if the economic circumstances dictate that lower earners could more easily bear an increase. I am a bit confused as to why the Scottish Government should have a comprehensive statement on tax policy in the future, but it seems that the STC may or may not, depending on economic circumstances. It looks as if the STC is having its cake and eating and saying that it wants the Scottish Government to come up with a future policy direction, but the STC is hedging its bets. Can you explain your thinking on that? Yes, absolutely. First of all, I may be saying that although we have proposed no change this year, when it was very lengthy, we have had no problem generating discussion and debate on the STC, I have to say that we have had a very long one on this. The decision about what we felt the committee should recommend this year was based on a very difficult trade-off between supporting public spending levels at this time of austerity and supporting household incomes, which have been battered over the past few years. For this specific year that under discussion we thought keeping SRIT at 10p made sense. The call for the Scottish Government, although we are not saying that the Scottish Government should state what it thinks, income tax should be three or four years since. It is more an approach that it should start discussion on income tax. I do not think that we have benefited from the start of devolution, really, from a particularly mature debate in Scotland about taxation and our different approaches to it. The STC is very clear about our approach to taxation. If you want to create the kind of economy and society that the Scottish Government tells us that it wants to create, we believe that they are very sincere about that. Indeed, the opposition parties in Parliament have a view about what kind of society they want to create. You can really only create and sustain such a society with a significantly higher level of total taxation revenues in Scotland than we currently have at the moment. It was a lot of discussion during the referendum campaign about the Nordic nations, for instance, while Denmark and Sweden have total tax revenues of about 12 or 13 per cent above where we are at the moment, Norway about 8 per cent, Finland about 9 or 10 per cent and they have been sustained over the longer term. If we want to move towards that kind of society, we have to look at how we can generate more taxation revenue. It is an approach to how you would go about doing that in the longer term, which the Scottish Government should start discussing. I do not think that there is any contradiction between saying that we should want to generate that more substantial debate about taxation policy and what we have said about our position in our written submission. Obviously, the problem with the taxes being devolved at present is that we do not have the total flexibility in terms of income tax, as you know, and that is really the difficulty. In terms of the low-paid, what did you say to the argument that was put forward last week by Alexander Blackburn, who said that the reason why the low-paid would benefit in relative terms is that you would get £10,600, which no one pays any tax. Say that someone was earning £10,000 more than that and that it was 1 per cent, they would pay an extra £100, or somebody earning over £50,000 would pay an extra £400. Therefore, there would be a higher proportion in that for the person, 20 per cent would be half a per cent of the total income, the other person would be 0.8 per cent. Therefore, it would be slightly progressive if anything, but it would allow significant resources about £330 million per £1p to be put into public services, which would obviously help to create sustained jobs in that sector and possibly even allow more flexibility in terms of wages in that. How do you feel about that argument that she put over, which incidentally was contradictory to Ben Thomson? I am just looking to see what your view is on that kind of perspective. I am not surprised that Ben Thomson was contradicted. It is a very serious and relevant argument, and it is one that we had within the SDZ when we were discussing the position that we would set before the committee. It was expressed very forcefully by a number of our representatives. Again, I would stress that it is one—if we are having this discussion a year hence and if the recovery has become further embedded, if real wages have continued to rise over that year, then it is one that I think we would endorse at this point next year, as we have suggested on our written submission. Our point is that at this particular moment in the economic cycle, having been through what is a historically unprecedented collapse in new wages over the last five years, this is not the moment in 2016-17—this is not the moment in which to increase taxes on the lower paid. It is an argument that we recognise. I say that it is one if we come back here next year. It is one that we might very well support, but it is very much about timing. We do not think that the timing is right to raise income taxes on the lower paid. Is there an element of frustration, would it be fair to say, in the STC, that we do not have more flexibility in terms of how income tax can be implemented in terms of bans, thresholds, et cetera? Absolutely. I wish that we were discussing the Smyth Commission powers at this moment in time. Our submission and our recommendations for next year would look very differently to the ones that we have expressed in our written submission to the committee, but we are where we are and we are dealing with the SRIT, so that is the basis on which we have made our proposals for next year. Thank you for that. Dr McCartney, what is your view on that the time is not right in terms of putting up—you have obviously talked about how increase in taxation will over 20 years for every 1 per cent reduce by 0.5 per cent. Do you think that this is something that we can wait for, given the high levels of mortality? I have attended a number of presentations with you, as you know, in which you have talked about even comparing Glasgow to Liverpool with significant changes, et cetera. Is that something that we can afford to wait on for the reasons that Stephen has explained, or do you think that now is the time to look at increasing taxation within the limited framework that we have with SRIT? I would share Stephen's comments about the bluntness of the tool that is available to you at this moment in time. Clearly, it would be much more interesting if we could describe a sharper tool where we could vary the bands and do much more to make the tool much more progressive. However, there is an urgency around that. The Scottish Government, since 2007 and previous administrations prior to that, has been committed to reducing health inequalities, and yet health inequalities in Scotland are stubbornly high. We need to remember that individual lives are curtailed, families are bereaved and human lives are wasted. It does not need to be like that. It is not like that across the rest of Europe. We need to be careful that, if we take money from across society with a blunt income tax tool such as SRIT, there are risks that some groups will be disadvantaged. However, we need to discuss what that additional revenue would be used for, because it could be used to mitigate any loss of income that some lower income groups might have. We know that the Scottish Government is working hard to mitigate some of the so-called welfare reforms that have come from Westminster. There is a strong case to do soon, urgent or now to increase the Scottish rate of income tax, but we need to use that revenue to ensure that people on lower incomes are not penalised by that. What about that argument here? Is it an argument that you would support? If we can start with the idea of the point of tax being about pooling resources for the common good, I think that the opportunity next year—you are getting a very blunt instrument that I agree with. The difference is that what you can do is that the fact that the Parliament is going to be getting those powers next year, even if they are potentially transitional, is that it will shed a spotlight on the fact that on-income tax in a way in which it may not have been the case previously in Scotland. You have an opportunity to use that spotlight to create a bigger debate discussion with a much wider range of people in Scotland than might have normally taken an interest in tax to try to reconnect with the idea of pooling resources for the common good. Then you can start to think about the role that tax can play and how it connects with spending on public services. It is not an automatic connect. I think that it is important that we get that conversation going with a much wider range of people than have traditionally been involved in that conversation. It may not be a very powerful instrument that you are getting next year in the Parliament, but it certainly is a spotlight that you are getting on income tax, which you can use to generate a much wider debate. Stephen MacDonald in your paper said that the STC notes international evidence strongly suggests that the scale of taxation is more important for reducing inequality than progressivity, which is almost an argument for the kind of tax rises across the board. Surely, in areas that you have quoted such as Scandinavia, they are also highly progressive. Are they not in terms of income tax? They are not, actually. Let's try and work through this, because I think that progressive and regressive can be used in overly simplistic fashion. When you compare the structure of the whole taxation framework in the UK to that in Nordic nations, the UK is actually more progressive. Higher-paid workers actually pay proportionately more. Despite in Nordic nations, the top rate of income tax has been significantly higher, and the threshold has been lower. Higher-paid people actually pay more. The system as a whole is less progressive because workers at the bottom tend to pay more as well, and that is mainly attributable to very high-consumption taxes, and the consumption tax has been levelled on. In income tax levels, because we are talking about SIT, I was not talking about the entire package of everything from excise duty to VAT to national duty. I was just talking specifically, about SIT, because we are arguing about that particular tax at the moment. Will you finish what you are saying? Yes, because it is an interesting point. The point that we were making in our submission is about the taxation framework as a whole, and if I have not made that clear in the written submission, I apologise for that. Again, the point is that the progressivity of income tax or the taxation system as a whole can become something of a shibboleth. If we are making tackling inequality our first priority, what I would argue that international evidence is extremely clear about is the level of taxation, the scale of taxation, and the total tax revenues that the Government absorbs year on year out that makes the difference in tackling inequality. That raises a lot of very fundamental questions for all of us in taking forward a matured debate about taxation. We would argue very strongly that, yes, like the Nordic nations, we need a higher top rate of income tax, we need thresholds to be lower, but we also have to accept that all of us will probably have to pay a bit more. Looking at the role of consumption taxes that we have traditionally opposed as being a regressive measure in a fairer taxation framework as a whole, I think that you might start to have a very different discussion about what consumption taxes might look like and what they should be levelled on. This is very long-term stuff, and nobody is pretending not to list ourselves that we can move from where we are at this moment in time to a Scandinavian-type taxation framework tomorrow. It is probably not even achievable in a longer term, but I think that they tell us some pretty fundamental things about the direction of travel. Some of the other things that we know that work to reduce health inequalities are where we can regulate and legislate and use the tax system to reduce consumption of unhealthy goods and services and products and encourage the use of healthy things. We always support increases in tobacco taxation, alcohol taxation duties and so on. I am going to mean unit pricing for alcohol. All of those things can shift and are well evidence to shift the balance away from consumption of these unhealthy things and also to reduce inequalities in the consumption of those things. Ultimately, the fundamental causes of health inequalities are much more to do with the income wealth and power that people enjoy within society. I think that there is no contradiction between Stephen's position and what we are doing here. I suppose that one of the things that historically we do know about Scandinavian countries is that at the same time as there are high rates of tax across all the bands, you have also had much more universal services. It is much more apparent to those people who are paying those taxes at lower income bands that they can see a direct connection with the kind of services they are getting, so they are much more willing to pay those taxes. It is that kind of debate that I think sometimes is missing here in Scotland and the wider UK. Those two go hand in hand. The perception is just as important as the way in which the tax system is framed in Scandinavia. I think that you are right. I think that buying is important in terms of that. Just one final point before I move on, because I have got no more colleagues who want to ask questions. You have said, Stephen, that given the context that we are in, it is not credible for the Scottish Government to prioritise inequality while proposing only a series of tax cuts. Scottish small business bonus scheme may have passed a duty and additional corporate reliefs. The FSB said that, during the recession, one in six small businesses, there were more than 100,000 who went bust without that. I visited Glasgow airport and they said that they would get over 5,000 staff. Everything from baggage handlers to senior engineers to retail, you name it, across the board. With that air pass duty being abolished, they would be able to significantly increase their workforce, certainly by over 1,000. Edinburgh's said similar. Additional corporate reliefs will argue about the modelling, but you will have known that the modelling suggested that, in the medium term, there would be 27 additional jobs created by 3 per cent reduction. Is it not the case that the whole point of these tax cuts would be, in terms of boosting the economy, job creation and, therefore, the actual tax revenue that would be raised? I do not accept that at all. I would argue very strongly that the evidence from all countries and across time is that, when you cut taxes, the detriment in revenues is immediate and real, and the economic outcomes are highly uncertain. If they transpire at all, then they are long term. If you work through each of the mechanisms that you have just discussed, the small business bonus, the point that we made at the time was, in the average benefits, about £1,400. Frankly, if the difference between a business going to the wall or not is £1,400, that business is not valuable and public policy should not be attempting to save businesses such as that. It sounds brutal, but that is a very important point. I think that you know the point about small business bonus. We have been asked, we have had this debate with ministers, the First Minister for a number of years, we have been calling on evidence to be produced that describes to us in detail the benefits that the small business bonus has brought to the economy. It has never been forthcoming, we have provided our own evidence. Frankly, it is a somewhat out of date now, but certainly for the first two or three years of this game, we have provided our own evidence that seemed to show that there has been no benefit whatsoever for Scotland relative to the rest of the UK. In terms of air passenger duty, it is interesting that we have heard a number of times in the past couple of years, both Edinburgh and Glasgow airport, talking about how passenger numbers have been grown exponentially and this is before air passenger duty has been cut. I would be surprised if there is a significant employment dividend about by cutting it further. In terms of the corporation tax, I mean, I just do not accept that modelling as credible. Even if we do accept it as credible, the additional 27,000 jobs over 30 years is a tiny benefit, frankly. Again, it is the tyranny of large numbers. The 27,000 sounds like a big number until it is put properly in context, and when it is, the benefit is marginal in the extreme. 27,000 sounds a lot of jobs in the economy in the size of Scotland. I do not know if the FSB would argue that it is £1,400 per business. Are they wrong if they say one in six of their businesses went to the wall from the repeat of the recession? It is on the basis of an unscientific survey of a tiny sample of Scotland's small business community. Again, I just hope that we have no credible academic evidence to show us the benefits of the small business bonus. We have produced our own evidence and it is four years old now. I would be happy to send it to the committee, which has asked a number of questions about the scheme. None of those have ever been answered despite repeated calls to the Scottish Government to do so, so it would be very helpful. Dr Mark Harvie, what is your view on those issues? I could make a limited comment on air passenger duty that might be relevant. If we are trying to encourage economic growth with a view to increasing employment and the incomes across society and with the view that that would improve health and reduce health inequalities, that might be useful. However, if the ways in which we increase economic growth result in greater air pollution and increase the risk of climate change, the negative impacts on health and health inequalities will more than outweigh any short-run economic growth benefits that might occur. Members will be aware of the reports in the press in the past couple of weeks, based on an annual report done by the Department of Health by looking at the number of deaths due to air pollution across the UK and in Scotland specifically. The numbers are staggering, I think, something in the range of 5,000 deaths per year. Measures that increase economic growth and will quite clearly increase air pollution, we need to be careful about that. What is more, the premise that air passenger duty cuts will increase economic growth by increasing the number of employees at airports, we need to be careful about that. The net number of tourists leaving Scotland through airports, compared with the number of people arriving, is much greater in the road out than it is in the road in. Increasing airport capacity is likely to drain economic activity as Scottish tourists go abroad to spend their money rather than spending it here. We need to be careful about the model of growth that we pursue and be confident that, where we are trying to increase economic growth, that will have a robust impact on the factors that will improve health and not have inadvertent consequences that might not be expected. There are just less likely to have to go down and stay overnight in Manchester to get their holidays or go to Gatwick rather than actually decide, oh, we won't go to Loch Lomond, we'll go to Florida. I can't imagine that many folk would decide in that regard. In terms of air pollution, I understood less than 2 per cent of air pollution was caused by aviation. Most of its actual cars is a vast overwhelming majority of pollution is caused by individual cars that people go on their own daily journeys. Those things make a contribution. Air pollution coming from planes is a particularly detrimental effect on climate change as opposed to local nitrous oxide emissions and the diesel fumes that much of the mortality figures are based on. However, the longer-term run, the longer-run impacts on climate change are much greater from air travel. You will find a diversity of views from the third sector. Clearly, there is a very strong set of organisations that environmental charities that have made some very strong positions known on air passenger duty and the impact, as Jerry has said, on climate change. There is also a lot of concern among environmental charities about changes within the UK tax system for subsidies for renewable energy. There will be clear pockets of interest, particularly as we move towards the Paris climate change in December. There will be other parts of our sector that might well argue that the impact on those people who might be going for budget airlines and so on might be bigger. However, that is one of those issues in which you will get different views from the third sector and charity sector. I am now going to open up the session to colleagues around the table. Richard Dupfawr by Jeane. Thank you very much, convener. Dr McCartney, in your evidence that you talked, you referred at some length to the need for preventative interventions and the need for preventative spend. The committee has been very interested in that whole area of public policy. Last week, we heard from Lucy Hunter Black about the situation regarding local authority funding, being in such a situation that, in many circumstances, families, which she described as being on the edge of vulnerability, were not able to receive the support and interventions that they required. Will that, in your view, make an argument for a sheep that is put forward, increasing SRIT, having a rate above 10 per cent, specifically for funding local authorities so that those services can be extended to those additional families who require them and would not make an important argument for that? If that funding is not made available, in fact, it is going to cost a public person and potentially cost taxpayers more in the future. I agree with what you describe. There is a demographic issue in Scotland, in common with the rest of the western world, whereby, as our populations age, the length of time in which people spend in ill health and in need of health and social services increase. That has currently and is projected to increase in the future a huge financial implication for Governments, including the Scottish Government. There is a challenge there to prevent as much of that morbidity that time spent in ill health as possible, both to improve people's lives, clearly, as a prime objective but also because of the financial implications of that. Policies, practices and services that can prevent that and compress that period of morbidity, as Derek Wallace put it, are vitally important if public spending is to be kept sustainable in the future. We know many of the factors that will allow that prevention agenda to be realised. They are not all revenue costs, so use of legislation and regulation are very important means of prevention. Regulating the sale of alcohol, regulating the use of tobacco, regulating what we do around the food industry and the marketing of food are all vitally important to prevent diseases related to tobacco, alcohol, obesity, poor diet and so on. It does not necessarily need to cost money. There are lots of things that the Scottish Government could do now that would prevent much of that need for spending and much of that morbidity in the future. However, there are a lot of public services that are also highly effective at coping with increasing morbidity and could prevent much of that from the early years' experience of nurseries and education services through all the local authority functions, central government functions and so on. Many of those are evidenced as being effective at reducing subsequent ill health. Spending money on that, as I have indicated in the paper, would be a highly effective way of reducing the revenue burden on the Scottish Government in the future but also, importantly, improve people's lives. I would like to ask the question from the point of view of SCVO. Obviously, you are not comfortable and recommended a tax increase per se, but, presumably, among your membership, there will be an acute awareness of the strictures that have been in public funding. Their ability to invest in services, which Dr Spun McCartney has described, will be very important in terms of preventative measures and not having the taxpayer and those costs to opportunity and equality in the future. For that very reason, it does not seem to be an appetite to reduce taxes, particularly at this time, while we are going through this austere compression in public services. The other point that I would make is that you do not need to increase taxes in order to invest in prevention. Prevention is something that you can do with budgets now. What gets in the way is not so much the lack of money, but what gets in the way of pushing towards prevention, in my view, is the political will, fear of how people might receive any shift in major budgets away from acute services, budget protectionism, with some of the way in which you have organised our big blocks of services and vested interests in the way that the system currently runs. That is the reason why we have not been able to shift as much to prevention. I do not think that looking towards the new tax powers is a way of bringing some extra money that we could then put into prevention is necessarily the panacea here. We need to look at our budgets independently of the tax system there. However, in terms of how tax relates to it, there is not an appetite within our sector, as far as we can tell, with all the caveats that I mentioned earlier about how much we have been able to generate a debate on this towards reducing taxes. Those tough decisions on spending to be made is a non-going problem and not going to be easily resolved as you finalise it. My final question comes back to a proposal that was made by Ben Thomson, which was interesting, if nothing else, which was that you would have a cut in SRIT, but you would have a big increase in council taxation. It would be a balance in terms of the overall funding received through taxation, but more of it would be raised at a local level. I want to get the panel's view on that proposal, if perhaps you have seen the detail of that from last week's evidence. In terms of what you have talked about in your submission about the importance of explaining to people the value of taxation and why they are paying the taxes and what they are getting back from that, if there was that kind of switch or more of what is happening at a local level, would that make that argument easier or would it be just as difficult to pursue? I think that we gave evidence to the joint cause of the Scottish Government inquiry into local taxation. One of the points there is that, when it comes to local taxes, the current system is not designed in that way where you can separate out the impact on those more in poverty than others. It is even more blunt, if you like, than the powers that will be coming to the Parliament next year. We have always argued, and we argued on the back of the Smith commission with a lot of support driven by our membership, that we would be keen to see a portfolio of taxes devolved to the Parliament, rather than just a lot on a very, very specific narrow tax basis, which is what we are getting in the Scotland Act 2015. A portfolio of taxes means that, yes, you can then start to rebalance and look at how you tax people differently, but again, it goes back to what Stephen Boyd has mentioned in his response quite rightly, that you need to think about how progressive the tax is, where does the burden fall, and how do you make sure that the approach that you are taking with taxes works better? Those countries that are married over time to sustain significantly higher total tax revenues tend to tax much more on a local basis, so I think that there is something in what Ben is saying. If we shift a far greater proportion of taxation responsibilities to the local level, it does do more to help people to understand how those taxes have been spent. It should help to increase the quality of local democracy, and we are all currently engaging with the commission on local taxation, but it should help to sustain higher tax revenues in the longer term. I think that the danger is trying to do this over one year in a very, very blunt fashion, which I think sounds positively dangerous. It is something that I had not really thought through until this morning, but I think that just to whack a great sum of income tax collected in Scotland and just to shift that on to council tax raises all manner of questions, not least about how that tax is collected and how individuals and families cope with that transition. Clearly, if you are paying income tax you are doing it through PAYE, people tend to find this an easier way to marriage. I think that they are paying council tax monthly and having to arrange to do that themselves proactively. I think that there is all manner of issues there that we would require some pretty careful forethought. I think that the suggestion that we should increase council tax as it currently is, as a means to address some of the issues that are prevalent in Scotland at the moment, is not one that I would support. We also modelled changes in council tax rates and the impact that that would have on health inequalities. That would exacerbate health inequalities because it is such a regressive tax. You would have to do a massive amount of recycling of that additional resource to redistribute the additional income that you might raise through it in order to mitigate what you would be doing by increasing that regressive tax. I think that the points that Stephen and Richard McEar make around increasing the total tax take and improving local democracy are true, but one other consequence of increasing local tax in that way is that we have some of the areas in Scotland with the highest local government taxation rates, which already have the highest mortality rates and the highest rate of health problems, namely Glasgow and surrounding deprived areas in west central Scotland. You put the demand for services and the payment of those services on the already most deprived and lowest income groups. That is a problem that Glasgow has suffered for some time whereby its local tax base is much diminished compared to the needs that it serves within its city, but also the needs that it meets for people coming in to use its museums and such like. I think that the local taxation versus local democracy issue is a tricky one to resolve, but certainly we would not support an increase in council taxation as it currently is because of its regressive nature and the knock-on effect. It gives us a different model in terms of its progressivity, as you put it, as being a regressive tax. It would be interesting to see you modelling Dr McCartney so that we can compare the two. Yes, it is all sighted and evident, so I am happy to share more of that. Thank you very much indeed. Jeane Freeman, to be followed by Joan McEar. Thank you. It has been suggested that there might be people leaving Scotland if the tax rate here was higher, and in each of your professions and organisations that you represent, do you think that that is an issue? If Scotland were to have a higher rate of income tax than England, because we are constantly comparing ourselves with England in so many other fields, is that seriously something that you feel people would look at their payslip? I could start with that. We based our modelling on, as I mentioned, the University of Stirling model of variations in the various tax powers that are available to the Scottish Parliament. One of the assumptions that they made in that model was about the degree to which people might move in response to changes in taxation. It is assumptions, but it is based on international literature. The number of people moving at the kinds of magnitude of scale of changes in taxation systems that are being proposed and discussed today were minimal. Certainly, when you think about it, I would be in that higher tax band. My job would still exist. There are plenty of people looking for jobs. I think that so many of those posts that are in the higher-paid sector are not so mobile that people could take those jobs elsewhere. Clearly, that would be different in some other sectors, but those sectors are much smaller in Scotland than they are, say, for the rest of the UK. I think that it is an answer. It is a question that we cannot really answer with any great certainty at this moment in time. We have to understand the starting point, which is quite a low rate of labour mobility within the UK compared to other jurisdictions such as America and Canada. That was something that came out of the independence referendum last year in the work particularly undertaken by the Bank of England to support Mark Carney's famous speech in February last year when he attacked the myth of great labour mobility between Scotland and the rest of the UK. Although you would have to point out that there is far greater mobility from Scotland to the UK than there is from the UK to Scotland currently. We would certainly support in the longer term once we have control over rates and thresholds having a higher top rate of tax in Scotland, but you would have to understand that it would be a policy experiment. We would not be able to forecast or model the consequences of that change with any great certainty. The integrated market of the UK is kind of unique. We can look at what happens in the States, in Canada and other jurisdictions, but we will only know what it will do to labour mobility within the UK once it actually happens. It is not all about revenues when we talk about top rate of taxes. It changes behaviours as well. If we want to create an economic model in Scotland that is distinct from the rest of the UK, I would argue that a higher top rate of tax is an absolutely crucial component of what that would be in changing behaviours of the executive class. The benefits and consequences may well be things that we have not really thought through yet. I think that it will be important just to take the odd policy experiment here and see how things work out. Understanding that if the impact is more detrimental, there might have been forecast, but there might have to be some quickly addressed in some way. On the third sector's constituency, we have two constituencies that we would highlight. One is the beneficiaries. For many of the people in that sector who work with us beneficiaries, I do not think that they would have the choice to move or to stay. I think that they would have to stay. They would not have that choice to be able to move. There is another constituency for our sector, which we have been highlighting this year. That is the donor base. It has become something that charities have become very aware of over the past few months. The trust we have with our donors gives money to charitable causes. If the systems were to diverge substantially and income tax in Scotland were to be very different from the rest of the UK, clearly it might well become in the interests of some of the donors to charities to consider. Particularly if the system became very complicated for them in this part of the UK, they might consider moving. It is an interesting question whether they would or would not, but I could see a case for some of them thinking that if I can have a more coherent system, if I move in another part of the UK, if I can make sure that all of my money goes to the good causes and so on, if I can deal with the complexity better there, then maybe I should move. A question rather than a certainty. To continue on that theme about all of you in each of the papers that you have presented, talk about education on tax and actually getting people to understand the tax system better. If we think back, and I was in the SNP at the time when we had penny for Scotland, which was not seen as a great idea, although clearly there would have been more money to spend on public services, how do you think that that can happen? Do you think that money should be ring-fenced? Governments do not like that, but is that something that you think would have public appeal in terms of absolutely seeing what the penny income tax, if it was a penny increase of 1 per cent, 10 per cent of the 10 per cent, would mean in real terms and how it might be divvied up would make that more appealing? I could offer a very limited comment on that. That is just to look at the Scottish Social Attitude Survey, which asks questions on people's appetite for further redistribution. Although the proportion of the population that supports redistribution has come down over time, it is still substantially above 50 per cent. Although that does not specify particular policies or particular increases, there seems to be a majority support for greater redistribution. I think that it is widely accepted that the narrative adopted by a whole variety of people in the public arena around how we describe particular groups and their needs, and the whole Shrivers vs Shirkers debate, the description of welfare recipients and people who require different aspects of the social security system has often been quite divisive and has reduced the social solidarity and the universal approach to providing services and universal all contributing to them. I think that we all have a responsibility in how we describe, how we fund and provide public services to enhance that social solidarity lest we exacerbate inequalities and the basis for addressing inequalities in the future. Since the referendum, a lot of comparisons were made with mostly the Nordic countries who are higher tax payers generally. That has given people a much greater awareness of what happens if you pay more tax. I mean, in a sense, there has been a bit of an argument around that already, even if it is just comparing a Government saying that we can have Nordic public services without increasing tax. But taking that out of the equation, I think that people have looked at that in a different kind of way. Would you agree with that? I think that for me, part of the trouble here might be if we are looking at this in terms of the tax that you are paying as a taxpayer, how is this being spent and where is it going. That then starts to look quite strange and dour to those people who maybe are not paying income taxes because they are below the threshold or maybe they are not depending on them more support. It is probably better to look at this from the perspective of the tax that Government collects from old sources, whether it is from corporations or through consumption taxes or through duties or whatever it might be, to look at tax and holding and seeing how that is then spent and looking for people to buy into that rather than to personalise it to the extent of where is your penny that you are putting in going. You start to only speak to a very particular section of society. I am not particularly confident that the referendum debate that was left is in a significantly better place to have this discussion than before. I think that there were a number of narratives that arose during that debate that were not particularly helpful, i.e. we could be more like the Nordics but all we needed was more in better jobs rather than higher tax rates. Jerry and I were both involved with the Jimi Reid Foundation and Jerry will remember when to email exchanges before we published a paper on taxation in which I was arguing strongly that that was a risible approach, frankly, to funding public services on the basis of a Nordic model. I think that it is also important that we do not get too dry-eyed about what is happening in the Nordic arena at this moment in time and when their higher tax systems have been under significant attack for a number of years now. We have seen Sweden in particular and the total tax revenues fall reasonably substantially over the past few years. Generally speaking, the scale and quality of political debate in Scotland has improved. I would not make too much of that over the last few years, so maybe we are in a better place in which to start generating a more mature discussion about taxation. However, I do not think that the referendum debate in and of itself left us in a hugely better place to have a discussion specifically about taxation. Along with the Jimi Reid Foundation, I addressed a public meeting in Eldersley in 2013. I remember taxation playing a very big role in that debate. I would like to say one thing for clarification to what Jeane Arker said. The SNP specifically pointed out how that money would be spent in a ring-fenced way on housing education and health. I do not think that it made much of a difference. Tony Blair raised taxes through fiscal drag, excise duties, VAT and national insurance. In other words, he said that there would not increase income tax, but other taxes were allowed to rise. Sometimes politicians, because the public do not feel it perhaps in the same way as income tax, use other methods, but we do not have some of the methods that are available to us in Scotland. I was quite impressed last week by Lucy Hunter Blackburn—I do not know if you saw her paper or heard some of the things that she was saying—but she gave us some figures about what tax would be paid at different levels of salary. She was arguing that SRIT is progressive. That has been a wee bit of uncertainty in a bit of debate. Do you think that SRIT is progressive? I do not think that it is progressive in and of itself, but that is not to say that the funds that could be raised through increasing SRIT could not be used in progressive ways. I mentioned Della Rona. I think that we can use progressive in very narrow and simplistic forms. I have read Lucy's submission. I thought that it was very good that it is a serious argument. As I said, it is one that is certainly informed in discussion and debate at the SDUC. I have to stress that our position is unbalanced in the basis of a very difficult trade-off. If the Scottish Government chose to run with Lucy's suggestion, then that is something that the SDUC could entirely live with. For this specific year under discussion, we are making a recommendation. We understand that there are other approaches, and it is certainly not a dine-a-ditch position for us. I think that it is a reasonable case that she makes, but I will be tough on the fundamental point about whether or not SRIT is in and of itself progressive. I cannot agree on that, but I think that it is clearly a regressive instrument. Only tangentially, and that is to say that the reason that the income tax increase is modelled to have a positive impact on reducing health inequalities is because there is a non-linear relationship between income and health. We have to increase incomes by quite a lot at the upper end of the scale to make a difference to health, but not by very much at the lower end of the scale. Therefore, small changes that improve the incomes at the lower end will have a bigger impact. That is why it comes out as being progressive in terms of health inequalities. I think that the argument about whether SRIT itself is regressive or not depends a lot on how you measure it, in relative terms, absolute terms, Stevens Wright. Normally, it is in relative terms, which is why it is normally a judge to be regressive, but clearly it would take a greater amount of tax and so on, absolute terms. You could argue that it was, but the bigger prize clearly is to have greater adjustment in the bandings and other aspects of other taxes. It is about what you do with the money as well as how you collect it. Clearly, it has got progression built into it, which is what Lucy was highlighting last week, but the difference is that the progression is what you are given. It is not something that you can change or make more progressive or rebalance, and that is why overall, plus the fact that this is just a very single, blunt instrument that you have been given. You cannot deploy policy decisions within the Scottish Parliament to change how it is balanced. That takes away the overall sense of progression, but it has an element of progression built in. Lucy could easily provide those figures to show that it is just a question of what you can do within the Scottish Parliament to change it. The figures that she gave us were that if somebody went from 25,000 to 125,000, that is their salary increased five times. The extra tax being paid went from 216 to 1875, which is about eight and a half times. On those pure figures, Steven, you would accept that that is progressive. I will follow those figures by a minute. If the rate has been applied in a flat fashion to the basic additional and higher rates, I cannot see how the revenue is collected can be used in progressive ways and have progressive outcomes, such as Jerry describes, but I do not understand how the instrument in and of itself can be described as progressive. Her argument is that, because of the 10,000 allowances at the bottom, somebody on 15,000 is not paying very much tax at all, whereas somebody on the 45 per cent rate, every pound that they get, they will be paying an extra 45 pence. I take the point to one or two that your comments are just for this year, and I accept that that is what we are asking is just for this year. I am just wondering about the timescales though, because the power that we were given in 2012 is taking four years to work its way through that HMRCs managed to change their systems, employers have got new software or that kind of thing. I do not know if I have a timescale, but my assumption is that any new powers in the Scotland bill will also take four years to work their way through, so that would be 2020. Should we wait until 2020 before we play around with taxes at all, or should we be thinking about it before then? We should certainly be thinking about it before then. My understanding is that we should hopefully receive the Smith commission powers before 2020, but whether it be 2018, 2019, 2020, we should certainly look every year when we should look at the case on its merits, and we should certainly have a very close think about whether or not we need to increase, or indeed to make the case for decreasing, which I would not share, but to have that discussion year on year, absolutely. Again, would SCVO have a different view for the next four years, or is it purely talking this year? Not only was it getting the systems in place or the infrastructure in place, but it was also because the modelling had to be done so that when we move into next year there could be some confidence that the correct kind of calculations could be applied. Now, we clearly will not need to do that same kind of level of modelling again for the next phase, because a lot of the calculations that have been done. My understanding is that it will not necessarily need to have the same kind of lead-in, but I am not an expert on this, so I do not know, but certainly one of the things in parallel to all of the building of the infrastructure and the modelling has been the discussions that are taking place. In Scotland, there was a devolved tax collective that the Scottish Government set up, which did have representations from a range of organisations, including from the third sector. A lot of the principles and discussions about how we might start with a tax system in Scotland, including from a blank sheet of paper to the credit of the Scottish Government that they were open to that, has been very, very helpful and very, very useful for us as third sector organisations to engage with. Yes, of course, we have not had the space and time, even with the referendum, to engage a much broader range of people into the discussions as we would like, but that discussion has already started. I mean, it was interesting, one of the things you said earlier, which was that, obviously, you are trying to help the most vulnerable people. Now, presumably the most vulnerable people are not paying tax at all, really, or are not paying much tax, so this would not actually have an effect on the people that you are helping or your organisations are helping. I think that they have just as much of an interest in how their society is run and how it is paid for as anybody else. Of course, everyone pays taxes through the other taxes that are not up for SRIT, including VAT and other forms of taxation and also local taxes and so on. One of the key points that we would like to get across, certainly, is that just because you are not necessarily income tax pay, it does not mean that you have less of a stake in society or in the way in which resources are deployed within your country. It is really important that we do not make that separation. Yes, people might not be paying a particular set of taxes because of their particular circumstances, but they just have as much of a stake in society as any others and they will certainly be paying taxes through other forms, whether it is through—they might even see the rent that they are having to pay at extortionate rates as a tax on the limited resources that they have. We need to look at that from a broader context. I very much agree with that argument, which has come across in some of the papers that we should look at the whole package. Obviously, at the moment, we are only looking at SRIT. If SRIT was increased by a penny and we did target it at those who are more needy, on the whole, the people that your organisations are helping would net benefit because on the whole they would not be paying it more tax, but they would be benefiting from the services. I think that we have said in our submission that if taxes were to be raised by £1 billion, clearly, as long as it is spent in a way that does tackle poverty and inequalities, then that would be something that would definitely support the people that our sector works with. If I can go back to Stephen Boyd, I am still struggling a wee bit to understand the STUC position. For example, taxes are not high by historical standards, and I take from that that we have a bit of space to raise them. You have said today that this is not the time to raise tax, but this is the time when public sector finances are absolutely squeezed. Surely, this is the time to raise taxes to get more money? What I am trying to describe, and I have said a number of times, is a very difficult trade-off at this specific moment in time. If we are having this discussion again in a year's time and the economy has continued to grow and the labour market has continued to stabilise, I think that the point that you have just made about additional tax revenues being used to support the most vulnerable people in society is one that we would absolutely support. Our judgement this year is that, coming off the back of five years of historically unprecedented real wage falls, the recovery is still not particularly robust and a number of significant uncertainties. It may well even play out between now and when the taxes are implemented in April next year. We think that on balance now is not the time to raise SRIT, but again I would stress if the Scottish Government does, as you seem to be implying that it should increase SRIT and use it in a way that is used to support the most vulnerable people in society. That is not something that you are going to find out, as in the papers that I am screaming about. Sometimes, there are very clear dividing lines in taxation policy, and corporation tax would have been one, as you know. We have vigorously opposed the Scottish Government's approach to that over a number of years. I think that whether or not we should increase SRIT by one or two p next year is an altogether different kind of debate. It is one where the dividing lines are much more blood, and we would certainly be much more accommodating to the Scottish Government, changing our position on this than we were on an issue such as corporation tax. Is one of the factors in your attitude or position—I realise that it is a net effect of all your different members—that does not make any difference if we said that that penny or tuppans was a ring fence or something like that specifically for, say, we put it all into mitigating welfare cuts or say, we put it all into GP practices locally in poor areas? Would that kind of thing make a difference to your position or not really? It is not disgusting to the committee's structure of the STVC, but among the people we represent, and it probably would, we all know the more technocratic arguments about why tax-hypothecation is not necessarily a good idea, but I think that in selling that increase at this particular juncture in economic history then it is probably not unhelpful to do it in that way. We come back on that point. I would be very concerned with that approach, because in one sense it would be seen as well where we have managed to cover and sort out the welfare mitigation side of things because look, we are taking this one p and we are using that to mitigate it. What about the rest of the budget? I would be concerned about trying to ring fence and trying to say that that is the bit that will sort out welfare, and that means that we do not need to worry too much about the rest of the budget and how we might use that for tackling poverty inequalities. I was reading your question that is implying that at all when I was talking about that, Richard Baker was raising that. I think that you were making a distinction between how we spend the money at the moment and maybe we should spend less on acute services and more on preventative, but surely if we had a bit of extra money that would take that pressure away, because this disinvestment thing and taking it away from the acute services is very difficult for example in health. If we could raise a bit of money and put that into preventative, would you be happier with that? I think that what would happen is that we would get in a situation where we raised a bit more money through the income tax and we would be back here in a year's time discussing the very same thing. If we could only raise a bit more, we might be able to then put it in prevention, because the acute services will swallow up whatever resources you put in overall through the tax space. I think that it would be very difficult to try to hive out, for the same reason that I gave in the previous point, to try to say that this bit of extra money is for prevention. It kind of makes it sound like it's a luxury. Doing prevention is a luxury, it's not a luxury, it's absolutely essential. It needs to be the whole budget, the whole resource that's looked at, not just any additional extra that's done there. I wouldn't necessarily agree with that point now. Okay, thanks. Finally, Dr McCartney, you do give a reason what we should do with the money if we were to raise more money. For example, you say, increase the incomes of the lowest income groups, fund high quality universal services, brackets with proportionate universalism. If we said that to the public, that would be quite wide, really. Do you think that we can sell that kind of argument, let's raise income tax two pence for that, or do you think that we need to be more specific and say, well, let's put this chunk into, say, GP services in the deep end practices, or something like that? How this is sold to the public isn't my area of expertise, and so I don't want to be drawn too much on that. I would like to make two points in relation to what colleagues have said. First of all, in relation to welfare cuts and social security benefits, we know what's coming down the track for the next five years, or we know at least what's coming down the track, and there may be more to be announced from the UK Government. The incomes of many of our Scottish citizens who are reliant on social security payments, who are on the lowest incomes, particularly those of young men being sanctioned off of JSA, are going to be plunged into absolute poverty over the next five years, as that policy winds its way through the system. The question about whether we do something now or whether we wait, put up the prospect that it might not be 2020 before we have more powers around us. I think that if we continue to wait and not use those powers that are available to us, we do run the risk that things will be an awful lot worse by the time we get round to discussing what we might do with more powers. I would just support the point that Rashir made earlier on about prevention. It doesn't need to be a cost to the Scottish Government to do prevention. Most of the effective things that you do around prevention are about regulation and legislation and don't actually cost enough of money to implement. It's more simply the cost of implementation rather than some revenue stream to employee staff to do X, Y and Z. A lot of the effective means of prevention are available to the Parliament at the moment, but those options aren't being taken up. If I could just follow up on that. Something like family nurse partnerships are often an example of preventive spend, but that would require money to be put into that. There are other aspects around the regulation of food or the regulation of alcohol sales. What is perhaps unknown is that in the USA and Canada, many off-trade premises for alcohol sales are owned and run by the state jurisdictions. That reduces the marketing of alcohol, it reduces the availability of alcohol and it reduces the mortality of alcohol. There was a very high-quality systematic review done by Han et al that showed that very clearly as different states nationalised and then privatised its off-trade licensing. It had a huge difference in alcohol deaths and so that doesn't cost an awful lot of money, it's revenue neutral. Those things are available now. John Gavan, to be followed by Jackie. I'll start with the NHS Scotland submission. You talked about the impact of a 1p increase in tax. Did you only measure the impact of a 1p increase in tax? That's the only modelling that was available to us at the time. You're looking to do more for next year or so. You don't have any other figures, but just from what you know, if you increase 1p to 2p, would you expect it to double? Would you expect it to increase, or is it just impossible to say without looking at modelling? It would likely make further reductions to health inequalities. I couldn't quantify exactly how much. It's impossible to say unless you look at the model. That's something that we will look at doing. Indeed, we'll look at some of the other powers that will be coming to the Scottish Parliament as you go, so I'm trying to model some aspects of that. STUC submission. Again, you've answered some questions about this comprehensive statement on tax policy, which you would like the Government to do. You've outlined a guess that it's more about an approach, as opposed to exact figures. What sort of timeframe would you expect if the Government were to follow your advice on your submission? What sort of timeframe would you think is reasonable for them to go forward? Should it be the duration of a Parliament, for example? Should it be 10 years? Should it be three years? Do you have a view on the sort of timeframe? I necessarily have been thinking in terms of timeframes. It was more just an approach to the tax powers that we know are going to be forthcoming. The Scottish Government has set out very clearly that tackling inequality is an overriding concern in this Parliament, which we absolutely concur with. Knowing that you're going to receive significant new tax powers, how would you begin to plan your taxation framework in the longer term? I haven't really been thinking in terms of timeframes, but I would say that the next couple of Parliaments will probably be more appropriate. That's helpful. Last question is just the SCVO submission. The submission sort of laid the groundwork for a tax increase, and then it explained how it would spend additional money, but it didn't suggest a tax increase, so I'm just keen to explore why it didn't. Is it a case that you didn't get an opportunity to speak to enough members to form a view, or is it the case that you spoke to a lot of members and the view was mixed? Was it a case that the members said that they didn't want an increase? I'm just keen to explore why you didn't ultimately reach a view. It's interesting that you say that it lays the groundwork. I can see why you might think that, because we said that from the conversations that we were able to have formally with our policy committee in the third sector forum and other arenas, there wasn't really an appetite for reducing taxes during a time of austerity, so that suggests that the only way is up. I can see why you might say that, but at the same time, there wasn't a strong view expressed collegiately around increasing taxes. I think that the concerns would be that you could increase taxes, but if that increase in taxes is just there to offset a reduction in taxes, let's say for business rates or something else or some other area within which the Scottish Parliament has competence, then clearly that's not going to work. The view that we were able to collect was that, if there is to be any tax increases, then this is how it should be spent. We would apply the same principle to a majority of the rest of the budget that's available to the Scottish Parliament and the Scottish Government. I wouldn't try to read into it that this means that we're basically trying to prepare the ground for tax increases. We haven't really expressed a view on that. I'll be very brief, convener, because a lot of it has already been covered by colleagues. However, I want to touch on the point that was made by Stephen Boyd, because what you're saying in the SUC submission is that progressive income tax doesn't actually get you there to tackling inequality. It's a much wider discussion about taxes in general that will reduce inequality. Given that we would expect any Government to set out its approach, what pointers do we have so far as to the Scottish Government's approach to taxation that would lead us to conclusions about the future? I wonder whether you'd make some observations on that. The first thing that I would say about progressive income tax would be a very central component of the kind of taxation framework that we're looking at, so we're not saying that it's not an issue. We enjoy a very comprehensive and constructive dialogue, on-going dialogue, with Scottish Government ministers and officials on a daily basis about how we develop the Scottish economy and interests of all our citizens. We agree about an awful lot of things, but we have often disagreed on issues around tax. As you know, corporation tax is a very public spot about that. We would be concerned in the area of taxation about a number of signs that we've had from Scottish Government ministers over the years. Corporations tax would be one, albeit that the current economic strategy has rained back significantly on that position. The various mechanisms that we discussed earlier on in the sessions—the small business bonus, air passenger duty and so on—has been an on-going stream of suggestions about ways that taxation could be cut on the basis of assumed and central effects that we don't believe will materialise, which is why we don't support them. A number of things were said—I think you have to acknowledge that the referendum campaign was different times. It was a campaign, but a number of things were said during the campaign about taxation rates in Scotland not rising under independence. I think that we are unhelpful to our longer-term matured debate about Scotland's taxation needs. Whether or not ministers two or three years hence are prepared to have a very different kind of debate, I am not entirely sure, but I think that constant refrain about whether we could achieve a Scandinavian level of equality on the basis of total tax revenues in Scotland not increasing was unhelpful to the kind of debate that we would want to generate. Tax revenues being cut, though, was actually the case. When I looked at the examples that you gave and what we know, it was about reducing the tax base by particularly reducing taxes to businesses. Would that not be a fair comment? I think that I have already, through the course of my evidence, made that point. The question here seems to be now whether to increase now or to wait, and I think that the STUC's position is to judge year by year. I am curious, because I think that Russia makes a very good point, the amount of yield that you would get from one pence on the income tax in relation to the Scottish rate of income tax is actually quite small. What kind of effects do you think this would have in quantum terms? Is there not a better argument to be had about shifting the spend within the overall budget, which is substantially higher? I put that to you all. I mean, do you want me to start? Yes, it is a small change, but it is one of the few changes that are available, if you like. I think that we have all discussed how we would like to have a different conversation when we have a larger range of options on the table, and hopefully we will do that in the future. I think that small changes are important. That is still people's lives that can be affected, both in terms of their health outcomes and when they will die, but also in terms of the money in their pocket and their quality of life. Small changes matter, because lots of small changes add up to big changes, but it would be nice to have a wider conversation. In terms of how the money is spent, we would encourage a shift towards preventative spending and we could have a further debate about what that means and what is not preventative around the system. There are mechanisms within the health sector already to try to minimise ineffective spending, so you would be aware of things like the sign guidelines of the Scottish Intercollegiate Guideline Network, which try to reduce spending on ineffective medicines, drugs and new health technologies, often marketed by pharmaceutical agencies, to try to get revenue stream from the NHS, which might not actually be that effective. We always need to guard against the demand for ineffective treatments and ineffective interventions. We have also got a very strong position within NHS Health Scotland of ensuring that robust evaluation is built in at the start of any innovative policy. We too often blunder into a policy announcement on an intervention that sounds good, but we do not know whether it will be effective or not. It is implemented in a way that there are no randomisation or robust control groups. By the end of the intervention, we are none the wiser about whether it is effective. We need to stop doing that. I encourage all policy makers and politicians to be more honest in the sense of saying that sometimes we do not know what works and we are willing to experiment here. We will tell you in five years whether or not that did work, and we will tell you because we have implemented it in a way to allow that, but if people nail their colours to the mast and say that this is going to be our policy and it will be effective, that creates an awful lot of disincentives to evaluate it robustly and find out whether or not it did actually work. Where we are trying to move towards prevention, let us build in that evaluation from the start and learn what works, disinvest in what does not work and then use that money to try other things. I think that there has been a theme during this particular evidence session of whether we could hypothecate any increase in the SRIT towards specific ambitions, whether it be prevention, tackling inequalities, welfare and so on. I would agree with what you have said. We have to look at the whole budget. We have to look at what is our strategy for tackling inequalities, shifting to prevention, tackling poverty and so on, through the whole budget, and then look at whether it raises taxes through the SRIT, how that contributes to that wider objective. I think that it is really important that we do not just hive off this one-pay as a completely separate resource that we can do something completely separately with. It needs to be coherent and consistent with the rest of the budget as well. It is important to remember that the yield is small but it is not insignificant. The macroeconomic impact of that tax rise in Scotland is likely to be similarly small but perhaps not insignificant. The environment in which that rise will be introduced in April next year, we do not yet know. I have already ran through a number of reasons about why we are concerned about what the recovery might look like at that moment in time. I think that we sometimes forget that austerity is short-hand for fiscal consolidation. Fiscal consolidation has got two components, spending cuts, but tax rises as well. When a tax rise across the border next year is a form of austerity, introducing that additional austerity after the chancellor has announced his potentially swinge on additional austerity on 25 November in a economy that we in a labour market still think is significantly weaker than the headline data tends to suggest is problematic. Again, I suggest that if that increase is forthcoming and if that money is spent well, we look forward to listening to that case, but the macroeconomic consequences should not be overlooked this year. Yes, and apologies, convener, for the lateness of my arrival this morning. No disrespect was meant to yourself or to the witnesses. Forgive me that there may be a potential that why I ask has already been asked in the 15 minutes that I missed before I arrived. If it has, then this will be a very short question session. I wonder if you would agree that some of the difficulty that might be created as a result of what you have all described as the inflexibility of SRIT, although there are some arguments about changes that you could make, but I think that certainly from the STUC perspective that there is a difficulty around making changes because those changes are probably across the board, is that we run the risk of a stilted debate occurring in the lead-up to what we anticipate being more substantial powers coming as a result of Smith, and it makes it more difficult then for not necessarily radical but even just changes to be proposed because we have come into this Scottish rate of tax and the view being held out there that it will not really alter that much. I think that that is a concern. It is something that we tried to cover in evidence that, although we are proposing no change this year, we hope that a robust debate will happen year on year about what should happen to SRIT. As long as it is the only mechanism that we have, we hope that there is a thorough debate every year about how it should be wielded. I think that there is a danger that, yes, we just leave it sitting there until the Smith commission powers are forthcoming. I think that it was incumbent and all of us in the organisations would represent to ensure that that does not happen. Briefly, a frustration of organisations such as my own who are trying to do what we can to reduce health inequalities is that we seem to be postponing action frequently. We know that there are difficulties with the powers that we have, but there are things that we could do to better redistribute income at the moment, both around SRID and what we might do with the revenues from that, but also around local government taxation. There is an urgent problem here. Health inequalities are wider than the rest of Western and Central Europe. That is not a good place to be in, given the human consequences that it has. It is also us just saying that that human consequence knocks on to the economy. The lost working days and the lost economy of all that additional morbidity are substantial. By not acting and not using the powers that we have, that has a consequence. Clearly, the promise of a more nuanced set of policy options does tend to put it on to the never-never. I think that what I mentioned earlier was that what next year does offer is a spotlight on tax, because this is a new tax, a very significant new tax, symbolically at least. It has got the opportunity to offer a spotlight and improve and encourage discussion with a much wider range of people than might have normally taken an interest in tax in Scotland. That is the opportunity next year. Clearly, whether there is no change or if there is some minor change, I cannot imagine that there will be any significant radical major change. I only imagine that there will be something like 1P if there is a change. There is plenty of opportunity to lay the groundwork for a discussion, a debate with a much wider range of people, because, for the first time, we will be thinking about an income tax in Scotland. I mean, not relating to us. We have had some submissions that have spoken about reducing SRIT. While Ben Thomson was here before us last week, I think that the Scottish Retail Consortium has also suggested that a reduction would bring a wider benefit around, for example, a boost to VAT through consumer spending. We can argue the wise and wherefores of that, but I wonder if one of the difficulties that is created in terms of the completeness element is that, if you do not have access to all of the other taxation elements, if there was that corresponding benefit, it would not necessarily be felt in terms of the budget that was available to the Scottish Government. That is one of the difficult challenges that the Scottish Government is going to have to weigh up when it comes to what it decides to do with SRIT. Seeing general nods of the head, I don't think we want to expand beyond that. That is entirely true. It creates a difficulty where you have aspects of devolution and you do not have a joined-up picture, and it is going to cause some uncertainty about where revenues might appear, whether they appear through VAT or whether they appear through growth in some other sectors. I can understand that uncertainty and nervousness around it. If we had a very comprehensive set of arrangements in front of us to discuss, or if we could start from scratch, as we sure previously talked about, we might have a more informed discussion around what the best options might be, but we are necessarily constrained. Some of our members, when we were responding and thinking around the Smith commission, did debate openly with us about the possibility, and it was a strong point, that it could have actually been better if a portfolio of taxes right across the different ranges of tax options was up for devolution, rather than a full-income tax proposition. Even if a portfolio of taxes meant only partial income tax devolution—much more partial than what is currently being debated in the Scotland act—it would be balanceable with other taxes across a portfolio of taxes. That could have been a better option for policy design in Scotland than what is being rooted around much more full-income tax powers for the 2015 act. I repeat the point that I made earlier. When you cut taxes, you can be sure of the detriment in terms of lost revenues. Any potential economic benefits are highly uncertain and may not materialise at all. I would refer you to a very interesting example recently. I am not pretending that Scotland is a perfect analogue for Kansas, but in 2012, Governor Sam Brunbach slashed state income taxes on the basis that the incentive effects would be dramatic. Economic activity would flow rapidly to Kansas, and the economy would soar while, of course, the opposite has happened. The economy has grown no quicker than anywhere else, in fact there is a lot of evidence that has been significantly slower. The state finances are an utter mess. The state Supreme Court recently ruled that the quality of education no longer fulfilled the Governor's responsibility to provide inadequate education. The revenues fell off dramatically and quickly. The impact on the quality of public services was felt almost immediately, and we are still waiting for supposed magical incentive effects to materialise. I hope that we are a long way from Kansas. On the behavioural impacts, it ties into the completeness element. There has been much said about relocation of individuals as a consequence of this and whether that would happen. Is the more material risk not around issues such as deferred income or moving towards dividend income, where, for example, on dividend income, while there is still a tax to be paid, it is not going to be paid in Scotland necessarily? Is that the more material risk that would have to be weighed up when you look at particularly the higher-rate payers with any increase under SRIT? That is a legitimate concern. Under SRIT, it is very difficult to envision circumstances where increases in SRIT are going to materially affect labour mobility. I do not really see it now. I think that there will be much more of a discussion when we assume full control over rates and thresholds. If, as I would argue, we need a significantly higher top rate of tax and a lower threshold, then yes, there should be a discussion about what that might mean in terms of labour mobility, but I think that there is a false issue around SRIT. I do not think that if we stuck to pay on SRIT, we are going to see a flow of executives suddenly from Scotland to the rest of the UK. I cannot really see it happening. I thought that it was interesting that the Scottish retail consortium, number one who were arguing that that effect was likely to ensue. I do not think that paying that sector is such that it is really going to affect the decisions of executives about where to—or even senior management—where to locate, which, of course, rely on a number of things, not just the rate of taxation, which relies heavily on the quality of public services, quality of life and so on. I just cannot really see it being an issue under SRIT. Okay, thank you very much for that. That concludes the committee's question. I am just wondering if, with witnesses of any further points that I want to make to committee before we wind up the session. Is there anything that might not be covered that you want to say? I would like to say a couple of issues, particularly around the progressivity or the regressivity of various tax systems that we have done some work on. I would be happy to say that I said that I would follow the work that we have done on the small business bonus as well. Yes, that would be very helpful. Okay, thank you very much for answering our questions so comprehensively. I am now going to call a five-minute recess in order to give members a natural break and allow for a change over our witnesses. I am going to reconvene the session. Our next piece of business is to take evidence from the Minister for Sport, Health, Improvement and Mental Health, as part of our continued scrutiny of the Care of Scotland Bill's financial memorandum. Mr Hepburn is joined today by Scottish Government officials, Dr Maureen Bruce, Maureen Olyffant and Victoria MacDonald. I would like to welcome our witnesses to the meeting and invite the minister to make an opening statement. Thank you, convener. I hope to have an opening statement. I am happy to move straight to questions. Okay, that is fine. It is okay. Obviously, I am being a member of this committee for a considerable period of time. You know that I will start off with some questions. I will try not to ask all the nice juicy questions so that colleagues can actually have a go. I have gone and lynched me during the break there, so I will just kick off and we will see how it goes from there. In terms of the recommendations from the report on Care of Scotland Bill's financial memorandum in paragraph 88, we said and I quote, "...the Scottish Government has indicated that it would intend to bring forward a supplementary financial memorandum to address at cost of any amendments at stage 2. The committees have a view that sufficient time must be allowed between stage 2 and 3 of the bill to allow proper scrutiny of a supplementary FM, including time for the committee to seek evidence from stakeholders in the Scottish Government. How much time are we likely to get between stage 2 and 3, minister? Time between stage 2 and 3? The timetable that I understand is that we will have stage 1 in early November, so we will move to stage 2 pretty promptly thereafter. I think that stage 3 is likely to be at some point in December or January thereafter, convener. Do you feel that that allows sufficient time? I certainly hope so. Of course, the requirement that I understood that you would request that it was sufficient time to assess any supplementary financial memorandum, I was clear that we would only provide a supplementary financial memorandum in the circumstances that anything that we put in the face of the bill necessitated such. In my letter to you, I do not think that we are in that territory. You are going to propose relatively minor amendments at stage to ensure that we forward on the waiving of charters that could be delivered through regulations in due course. That is a bit woolly. What kind of timescale are we talking about there? In terms of when the regulations would be enforced. Of course, the provisions of the bill would come into effect for financial year 2017-18, and I think that we would have enough time between the bill being passed at this Parliament, getting royal assent to try to have them in place more or less at the same time as the implementation of the bill, when the bill starts. In your letter to us about the carers bill finance group, which is met for the first time in July, you say that this will further explore the assumptions behind the financial memorandum and consider any new evidence that might be available. Will this feed into supplementary financial memorandum? Yes, having made the point that we do not envisage there being a sestifon, it did emerge that there was such a requirement. Of course, we would provide such. I still stand by the financial memorandum that we provided. I think that it is based on the best available information that we had. Of course, there have been some remarks made by other stakeholders, and that is why we set up the finance group. I am not aware of any evidence having emerged thus far that would cause me to question the initial financial memorandum. I know that you say that you consider the financial memorandum to be robust based on the available evidence, although the committee did express a number of concerns, as we have obviously reported. However, there is a separate issue in the role of finance group in recommending an appropriate method of distributing funding to local authorities, NHS boards and third sector. You talk about having a role in establishing procedures for monitoring demand costs and achievements against the bill's objectives on a longer timescale. Again, what timescale are we talking about? The issue that we have here is that it has been quite difficult to pin down a lot of those things. In due course, longer timescale, we are not really getting anything coming out of here. I suppose that the group has two roles here to help us and form us as the bill proceeds, and that is clearly imminent. We need to get that at any information that it wants to provide as soon as possible, but there is a slightly longer term role. I know that one of the things that this committee has expressed interest in is that the Government is always reviewing the legislation that passes, so this group is there to help to inform that type of process. That is a slightly longer term piece of work. I am going to open out to colleagues around the table straight away to Jackie. I wonder whether I could pursue the question of whether there is going to be a supplementary financial memorandum. You seem clear in your response to the convener that there would not be one at stage 2 because there are very limited amendments. Are we going to get one at all at any stage? At this stage, I do not envisage one, Ms Bailey, but I suppose that the point that I have made to the convener is that having been a member of this committee, I recognise the absolute requirement for it to scrutinise every item of government expenditure if it emerged that there was one necessary and, of course, we would provide it. You are saying that if the committee recommended that, you would then provide it, which they have already done? No, I am suggesting that if it emerged as a necessity, which I do not think that it has thus far, we would provide one. Would you not accept that there is no procedure at all for anything like a financial memorandum at the stage that you would be introducing regulations? I would accept that, and that is why we said that we would provide any financial information on the face of the policy note. Of course, I am also very willing to keep this committee up to speed as we progress. By definition, with secondary legislation, there is a lower level of scrutiny, and although you have moved from a negative to an affirmative instrument, that is still considerably less scrutiny than would happen with primary legislation. Is that not the case? I would suggest that that is in the hands of the committees of the Parliament. If they want to exercise rigorous scrutiny function on any statutory instrument, then they are able to do that. I think that it is an important change to move from a negative to an affirmative instrument, and that is primarily the reason why we have done that, because I recognise absolutely that the Parliament has to have the ultimate say in moving forward. The Parliament also sets out quite clear procedures in relation to financial memorandums that should be before committees with primary legislation. That, in essence, is the problem. Have you made any estimate, because I am being told that it could be tens of millions of pounds worth of spending that was simply going to slip through under secondary legislation? What estimates have you made of the total cost? Let me be clear, we are not seeking to slip anything through here. We are seeking to be as clear as we can. This is a complicated matter to be candid with the committee, where we are not quite there yet, but we are still discussing the matter with COSLA. That is on-going, but I commit to keeping the committee informed as we move forward. Is it not the case that there is a difference of opinion between yourself and COSLA about some of the unit costs that are used? Yes, we have explored that to stage 1. I would go back to the point that I have made on the available information that we have. The estimates that we have set out in our financial memorandum are robust. I made the point at the last time that I was at this committee, speaking to the financial memorandum, that I very much welcome any different methodology that other partners, including COSLA, might like to set out. I am still right in saying that, thus far, we have not received such, but nonetheless, we have set out the finance group to work through those issues, but I stand by the financial memorandum that we presented. It is the case that stakeholders have said that, in their view, there will be enhanced costs. Is it not a danger that, in setting out an ambitious policy by not following it up with adequate finance, you are in danger of disappointing people about its implementation? I would certainly agree that this is an ambitious piece of legislation. I think that it is an area that we need to be ambitious on. I am sure that you would agree with that, Ms Bell. I am sure that you have many carers within your constituency who find life difficult. I think that we can do more to support them. I stand by the financial memorandum that we have presented. Of course, it is the case that we would all seek to finance any legislative mechanism that we take forward through this Parliament. I was not quite clear that I got information from you when the convener asked about regulations in due course. When is that anticipated to be? I would hope that we could put them in place to have the statutory effect at the same time as the bill had statutory effect. Which is when? It would start in 2017-18. Minister, you stand by the financial memorandum. How is the cost of replacement care dealt with in that memorandum? I think that we were clear that at that stage we had not come up with the appropriate mechanism to provide that information. I have been perfectly clear at the time of presenting the financial memorandum. I have been perfectly clear with the committee in that respect now. That is an on-going matter. It is one that I am not only happy to keep the committee up to speed with, but I would expect the committee would want me to keep them up to speed with that. There is no figure in your view for replacement care in the financial memorandum. From my memory, I am looking to my officials to correct me if I am wrong, and I think that we are pretty clear that there was not at that time. Subsequent to that, the bill team gave evidence and said to the committee on the record that the cost of replacement care on current prices would be in the region of £30 million. We asked why that was not in the financial memorandum, and we were told that it was not in the memorandum because it would work the £30 million figure out after the memorandum was published. Scottish Government is saying that there could be a cost of £30 million on top of the financial memorandum, yet you are saying that there is no need for any additional information on the memorandum? I do not think that I am saying that there is no need, and I, as a former member of the committee, I would recognise the importance of assessing any financial commitment that the Government seeks to make. I suppose that the point that I would make, Mr Brown, is that we have not yet defined what the mechanism will be. Without having defined what the mechanism will be, we cannot say definitively what it will cost. What I can say is that I do not think that it will be anything approaching £30 million. How can you say that then? What will it be? We have not defined it ultimately. I am happy to come back to the committee once we finesse that further, but what I can say is that it will not be £30 million. The problem is that you have said this before, minister. If I quote directly from the official report of 3 June, you said to me, having committed to come back to you in writing to clearly establish whether the £30 million is an annual figure, I will commit to providing a further breakdown of what it relates to if the committee will find that useful. That is a direct quote from 3 June. Can you now tell us, is it an annual figure and why you have not come back to us to tell us how it is broken down? Having said that it will not cost £30 million, I can tell you that it will not be an annual figure. If you feel that we have not provided you with the requisite information then I am happy for us to look at that and come back to you. I apologise if we have not done that. What do you mean if you have not done that? I have read what you said. Do you feel that you have given us a breakdown? If you are telling me that you do not feel that we have, then I am willing to concede that we can look to provide you with further information. I think that that would be really important. The reason that I am pressing us is that it is potentially the biggest single slice of the whole expenditure. For a memorandum, not to have it is a big mistake. For you not to have corrected that mistake, clearly there are going to be costs for care. You might not think that it is £30 million, but there are going to be costs. Whether those costs are borne by the Government or by local government or by individuals, they are going to be borne by someone. In terms of standing orders, you use the Government to have to say to us what you think the costs will be and which of those three categories will bear it. However, the waving of charges issue is resolved. If there is going to be the number of carers getting respite, as we all want to see, there is going to be a cost. The cost will be large. The only thing that you are arguing about is how it will be broken down and who will pay for it. Regardless of who pays for it, it should all be clearly in front of the financial memorandum. Well, I take your perspective. What I am clear on is that we can only cost things that we have definitively set out how we will take the matter forward. That is where we are working. I have already been clear and quite candid and I am not trying to hide anything from the committee that we are still talking to COSLA about the costs related to this matter, and we are not quite there yet. However, my commitment is to inform on this committee as quickly and as promptly as we can in that matter. Forgive me for pursuing this, convener. You have said clearly in the financial memorandum that, in 1718, you would expect 11,000 carers to receive support. Not all of them would be entitled to a break but support of some nature. By 2021-22, there will be 153,000 or almost 154,000 getting support. Again, not all of them getting breaks but presumably a proportion of them. You can predict how many people are going to need support. Surely the Government can then predict on current modelling what percentage of that 153,000 are likely to need additional care while the carers are away. Presumably, you have some idea of the average weekly cost of care. Presumably, the Government would be in a position and ought to be in a position to have an estimate of what the likely costs might be. Of course, there will be a range and, of course, it will depend on demand, but you must have some idea of what the likely costs will be. We are continuing to discuss this with COSLA. COSLA represent local authorities. Local authorities will have the delivery function here and we are trying to ensure that we can get a solid and reliable figure, which I will present to this committee as soon as possible. You could not say whether there would be more or less than 50 per cent of those carers would be likely to require a break. I think that I would want to reflect on that and probably write back to you on that. Mr Brown, I can provide you with that information. Again, on your letter to a subsequent dear appearance that you wrote to us on 10 June and said, a set-out in my previous reply to your 28th May, the waving of charges issue is to be resolved for stage 2. My reading of your most recent letter is that it is not to be resolved for stage 2 and it is going to be resolved after the bill has become law or after the bill has been passed. I have decided to resolve it by using a statutory instrument. I think that it gives us the... What we can do here is we can rush to try and resolve this. This is not a straight-forward matter, it is a complex matter, or we can try and put in place the appropriate mechanism that will support carers in the appropriate way. That is what I think carers out there would expect us to do. I think that that can be resolved by having the approach that we do by regulations, which we will be taken for by an affirmative instrument, which is subject to parliamentary scrutiny, as any affirmative instrument would be and gives us the space to ensure that we do it in the appropriate manner. That is how I have decided to resolve the matter, so that is the resolution that we are taking forward by a statutory instrument. Do you not think that that is just delaying resolution, as opposed to resolving it? I mean, just to say that we are going to have some regulations on it, it is not actually resolved. The issues remain the same, you are just delaying a decision on the issues. No, I mean that it is clearly imminent that we continue to discuss that with local government and the national carers organisations. Incidentally, carers out there would want to know that we are resolute in our commitments that we have made to them. That is just the mechanism by which we seek to deliver them. I would not argue that that is any more a delay than any other form of statutory instrument in any bill that is taken forward. We deliver many things by that mechanism. We have been involved in scrutinising many bills in my time as a member of the Scottish Parliament by which we seek to take forward statutory obligations by way of regulation. I do not think that that is any different in that approach. I strongly believe that the Government ought to produce a supplementary financial memorandum here, because I think that you have missed potentially the biggest slice of the cost, if not certainly one of the biggest slices, and therefore I do not think that the financial memorandum is best endeavours, but I will leave it at that point. Okay, thank you for that. That concludes questions from the committee, but I still have a few more questions. You have said, minister, that you do not want to rush to resolve this, but it is 16 weeks since you were last at committee. As you know, as you have said on a number of occasions, you were a member of this committee, and yet you say that there is no defined mechanism, and you have also said in a quote that you do not define what it will cost, but it will not be £30 million. The financial memorandum obviously indicates that this is your best estimates, so is it going to be £29 million or £9 million or £15 million? We really have to have a wee bit more information, because it is not as if we are asking you back after you were here last week, which means that 16 weeks is quite a long period of time. I would have thought that negotiations and deliberations would have progressed somewhat, even before you came to committee and before the financial memorandum was published, let alone in the 16 weeks since you were last here. Do you feel that it is somewhat unsatisfactory? If you were back here on this committee, how would you be viewing this position? I recognise that the members of this committee take their scrutiny role very seriously. I did that when I was a member of this committee as well. All I can be convener is as candid as I can be. What I am telling you is that we are currently in dialogue with COSLA around this matter, and we have not reached agreement yet. Clearly, it would have been better if I was able to come along today and say that we were at that place, but we are not at that place. I hope to be there very soon, and as soon as we are, I will inform this committee. How long is it going to be? Is it going to be a week, two weeks, three weeks? Is there any deadline for the conclusion of those discussions? Is stage 1 approaching? I would certainly hope to do it imminently. I think that it should, hopefully, only be a matter of weeks. Jackie, sorry that you want to come back in. A question to you, convener, because I am not sure of what we can and can't do, given the evidence that we have had today, but I was wondering whether it would be appropriate to consider a supplementary note to the committee's report, given what we have heard here from the minister today? We will sit and discuss this matter when we have a private session on how we take this matter forward. I think that that has concluded all our questions on this matter. Thank you very much, minister. I am just going to have a two-minute recess to allow our witnesses to leave, and then we will go into a private session. I will consider a negative statutory instrument in relation to the Land and Billing Transaction Tax Scotland Act 2020. I just want to know if members have any comments that they would like to make. Will there appear to be no comments from members on that particular issue? We will now move into private session.