Chamber and committees

I have other questions, but I want to open up the discussion to colleagues round the table, rather than holding the floor. I will bring in John Mason first.

Thank you very much for that and thank you to your officials for their contributions today.

That concludes the public part of today’s meeting. The next item, which will be discussed in private, is consideration of our work programme. I call a five-minute break to allow the official report and our witnesses to depart.

I will not bombard you with myriad additional questions, but I will ask one more. It is really from ICAS, which followed up a meeting last week with a wee letter. It concerns section 2, which I did not touch on because I knew that other colleagues were likely to do so, and states that, although we want to see the payment of taxes that are due, for those who fall foul of that requirement, there appears to be

“no official objection/complaints/appeals process”

in the bill,

“which seems to be inequitable.”

Will there be any change at stage 2 to alter that?

Hold on a second. The bill is already a year later than was intended. What efforts have been made to secure data over the past year and before that? I would have thought that that would have been a primary objective before the bill was lodged.

Good morning, and welcome to the 11th meeting in 2024 of the Finance and Public Administration Committee. Agenda item 1 is to take evidence from the Minister for Community Wealth and Public Finance on the Aggregates Tax and Devolved Taxes Administration (Scotland) Bill. I welcome the minister and give apologies from Ross Greer, who has to attend another committee meeting.

The minister is joined by Scottish Government officials Jonathan Waite, the bill team leader; Robert Souter, a senior tax policy adviser; and Ninian Christie, a lawyer for the Scottish Government’s legal directorate. I welcome you all and invite the minister to make a short opening statement.

Thank you for that helpful opening statement. I have scribbled down quite a few things to ask on the basis of your statement; I hope that I can read my writing when I try to ask my questions.

The first thing that I will ask about is the consultation on part 2 of the bill. Why did the Scottish Government not consult on those provisions? That caused some irritation among our witnesses last week from the Law Society of Scotland, the Chartered Institute of Taxation and the Institute of Chartered Accountants in Scotland.

The policy memorandum states that the bill will support the Scottish Government’s ambitions for a circular economy through

“encouraging the minimum necessary exploitation of primary aggregates ... maximising the use of secondary and recycled aggregates, and ... incentivising innovation and development of alternative materials.”

We are in a world in which the climate is changing rapidly and the world is moving forward quickly, and we are talking about a fairly modest bill that will not be implemented for a couple of years. What will actually be done to fulfil the ambitions? I am not really seeing anything. I am hearing a lot of talk about stability and continuity, but we are talking about a couple of quid a tonne of tax on rock coming out of the ground. I do not see the incredibly complicated picture that you seem to be portraying, minister—surely it is pretty straightforward.

The Scottish Government is not setting out what it would like to see. I know that you are saying that we cannot pre-empt taxes a couple of years ahead, but the tax has been £2 a tonne for 15 years. Where is the incentive for people to invest in a multimillion-pound recycling plant? We visited a facility that invested £4 million, and there is another facility that invested £2.5 million. Others want to recycle to avoid the 700,000 tonnes that went into landfill last year, if the amount of soil can be reduced.

What is being done to achieve that? It looks as if this is going to be a landfill tax that just mirrors what the UK has done for the past 10 years. Is that likely to be the situation 10 years from now? I know that you cannot predict the future, but the direction of travel that I am hearing in all this talk of caution and stability is exactly that.

How much does it cost per mile to ship a tonne of aggregates by truck, for example?

I appreciate that, so how much does it cost by rail or by ship? If we are talking about the difference between Scotland and England, what is the elasticity of demand? I asked that in a private briefing with officials and I could not get an answer. The bill has been worked on for a couple of years and I thought that you would have a pretty straightforward answer to that. If you put the tax up from £2 to £3, does that mean that you will not sell any aggregate in England? Will there be a 10 per cent reduction? Will it have no effect whatsoever? Similarly, what will happen if you reduce the tax by £1?

Despite all the talk about moving towards a Scotland where there is more circularity, the financial memorandum makes it look as though, over the next five years, there will be no change whatsoever in the estimated tax take. I appreciate that that might be partly because of the lack of data that you talked about, but it looks as though there is no ambition either to increase or reduce the tax by trying to move people into greater recycling. Of course the industry will sit where it is at the moment, because vested interests always oppose change, do they not?

If I have a company that has a branch in Manchester, one in Belfast and one in Glasgow, I will know what its output, cost base and profit are. I am really struggling to understand the lack of data. We are talking about millions of tonnes of rock. It is not as if people can hide it—well, apparently, they can hide it, because we have found out that loads of quarries are unregistered.