Chamber and committees

Many people would want to see that evidence being used as the basis for the decision making. If that evidence is not being compiled until after the decisions are made, it puts the Scottish Government in quite a difficult situation. We have seen the reactions from the business community, in particular, and many people feel that the evidence in relation to the changes that have been made is not being compiled. There is a great worry that some of the behavioural changes that will happen could be detrimental to the economy.

I will come to retail in a minute. Were there people in the business community who were supportive of the Scottish Government’s tax changes?

This will be my final question, cabinet secretary. On that point, the Scottish Retail Consortium has said that, according to the budget document, the tax, should it come in,

“is about plugging a shortfall in the devolved finances”

but the Scottish Government is now putting it forward as a tax that would be “hypothecated for public health”. In fact, you have just mentioned its title—I think that you said that it is a public health supplement.

Can we just get this clear? Is it the intention to bring in this tax as part of a public health agenda, or is it simply about trying to plug the big black hole in the Scottish Government’s finances?

The business community has, almost universally, not been supportive of the changes because—

In your response to paragraph 41 of our report, you are clear that the move to the five-band system had

“a relatively negligible impact on the size and growth rate of the economy in the short-term.”

What long-term analysis has the Scottish Government done on the basis of the information that the SFC has provided and other financial information?

I am sorry, but I want to bring you back to the business rate surtax proposals that I asked about. We have received a detailed submission from the Scottish Retail Consortium that sets out somewhere in the region of seven or eight very serious objections to the surtax’s possible introduction. There are two things that I would highlight, the first of which is its bitter complaint that, when it came to the discussion about the new deal for business, the Scottish Government said that there would be “no surprises”. However, this has come as a complete surprise as an announcement without warning.

Secondly, the consortium has set out some pretty substantial concerns about behavioural change. On what basis have you modelled the surtax’s potential impact?

Cabinet secretary, in your response to paragraph 40 of our report, you said that, in relation to looking at the impact of tax policy changes on the wider economy, you have been using

“a range of evidence including: real-time economic data”

and

“formal evaluations”.

You give one example of a formal evaluation, which is the income tax evaluation of the 2018-19 reforms. Using the statistics that you have received, what are the other formal evaluations of behavioural change and the impact of tax policy change?

It is, of course, the decision of ministers as to what changes to make to tax policy.

I do not doubt that. It is the fact that that is not going to be compiled until after the decisions have been made that is the issue.

You also said that engagement with stakeholders, including some of those in the business community, has been very important. Who was it in the business community who was supportive of your income tax changes?

In answer to the convener, you said that you are not able to provide timescales, should further amendments be needed. Might a number of adjustments need to be made or are you reasonably content that, should the order be agreed to, it will be effective in addressing most of the concerns that we have heard about?