Chamber and committees

Can you give us some detail on what else is in an application?

Nonetheless, one of the criteria that would be used to judge whether we are successful is whether, overall, there is a net gain to the Scottish economy over a certain period of time, because that is obviously what is important.

It is quite an important aspect. As the Scottish Fiscal Commission set out, the challenges are huge. One of the biggest is in ensuring that our labour market is fit for future developments. It is not just a case of ensuring that new investment exists to create new jobs and attract people into them; we will also need the skills and talents of people who have taken themselves out of the workforce, who tend to be in a particular age group. It might be quite helpful, when considering the two areas that are designated, to have a look at that aspect because that incentive might be increasingly valuable to us.

In relation to the relevant skills that go with new green jobs—I accept the definition that you mentioned earlier, about being as flexible as possible—do we need to do a lot more to ensure that the skills and training that we are providing fit the new green opportunities in a way that can benefit the labour market?

On a related issue, the Scottish Fiscal Commission has made a very important point about our demographic structure, which is that one of the problems that we have in the Scottish economy is the size of the working population compared with the total population. Do you believe that the green ports initiative can help not only to create new jobs but to get some people who have left the labour market back into it to help with some of the issues that we have in the Scottish budget?

I completely agree with you that any reform of council tax would first require a revaluation, which is long overdue.

I want to ask a few questions about your specific proposal for replacing council tax—what you call a “Proportional Property Tax”. Can you be very specific about how that would work?

That is very important. It would be double taxation, and you would be in very considerable danger of not only creating very considerable bills for some people who might not actually be at the top end of the scale but making things very complex administratively. As you know, the Parliament does not have the power to tax bodies on a non-income basis—that is, we cannot have a national wealth tax—but I think that the wealth tax that you have suggested in your paper is to be administered locally.

Would that not make things more complex, too?

I come back to the point that we want a much more sustainable future for the Scottish economy in terms of the revenue that we bring in, in line with necessary increased expenditure, particularly on things such as health and social care and social security. Obviously, that tax revenue is absolutely vital to the future. If we are going to have increased taxation on certain members of the population, as well as structural changes, we have to be clear that what we are suggesting will not provide the disincentives of the sort that the convener set out. It is not necessarily that people are going to move elsewhere, but that they might think, “Well, this isn’t very good for us—we don’t like this extra burden of taxation, so we won’t work quite as much,” which would be a considerable problem for the economy. Also, from a business angle, people think, “Do we want a higher tax burden in Scotland? Probably not.” Do you accept that that is a view that, certainly, business and industry hold?

Thank you.

I will pursue that point, in line with the committee’s job of scrutinising the budget. In your answers, you have given an idea of what the potential costs might be. Has the Government done some arithmetic on the benefits that would accrue, in particular from the creation of new jobs, in the five-year period that you spoke about earlier? The hope is that those would be highly paid jobs, so we would get a greater return through tax revenues from income tax and so on. Have you done any analysis of the benefits and the costs?