���˿���

Good morning, and welcome to the 22nd meeting in 2023 of the Finance and Public Administration Committee. Before we start, I congratulate all members of the committee who contributed to ensuring that we won the powering change award at last week’s Holyrood awards. It is a committee award, not an individual one for me, as convener, so I thank everyone. I doubly thank Michelle Thomson, who won the political hero award on Thursday night. [Interruption.] I named everyone on the committee to ensure that you were all recognised, including new members such as you, Jamie—you also got the nod.

Let us get on with the meeting and the matter at hand. The first item on our agenda is an evidence session with the Minister for Community Wealth and Public Finance on a draft Scottish statutory instrument—the Land and Buildings Transaction Tax (Green Freeports Relief) (Scotland) Order 2023. The minister is joined by Scottish Government officials Laura Parker, who is the land and buildings transaction tax policy lead, and Laura Duffy, who is head of the green freeports policy and delivery unit.

I welcome our witnesses and invite the minister to make a short opening statement.

As you will probably know from reading last week’s Official Report, there was quite a lot of discussion and deliberation regarding all aspects of the green freeport proposals. One issue is the importance of attracting green jobs into green ports. I felt that there was an element of frustration from our witnesses last week that there does not appear to be a definition of what a green job is. For example, on two occasions, Derek Thomson from Unite the union asked whether someone making deliveries on an electric bike counts as a green job. Does the Scottish Government have a definition of what a green job is? We do not want to be comparing apples and oranges in our discussion, with everyone around the table having a different view of what a green job might be.

Thank you. That concludes my questions for now. I open up the session to colleagues around the table. First, we will hear from John Mason, to be followed by Liz Smith.

Assuming that every single job created in the green ports is in a completely new industry, a new manufacturing business or whatever it happens to be, people in other parts of Scotland and beyond who are highly skilled will still want to move there. Will that not exacerbate labour shortages and create inflationary pressures in other parts of the economy?

Okay. Just one last question from me. There was loads of information there and I am sure that other members will want to come in.

According to David Melhuish,

“the officials behind the UK Government’s freeports prospectuses ... were very impressed with the prospectus that was put together by the Scottish Government”.—[Official Report, Finance and Public Administration Committee, 5 September 2023; c 46.]

However, Unite the union seemed frustrated that there did not seem to have been much engagement with the trade unions. Its representatives said that the City of Edinburgh Council was not listening to them or keen to engage with them. There was almost an accusation that that was deliberate. What engagement is the Scottish Government having with its trade union partners on such developments?

I have one last question on the issue of the green economy, which you just touched on.

You said that a £13 billion green stimulus package could create 150,000 jobs in Scotland and suggested that there is a pressing need for the Scottish Government to maximise the impact of its spending priorities. Labour in the UK has said that it can no longer proceed with its £28 billion green prosperity plan because of affordability. How can Scotland, with 8.2 per cent of the UK’s population, afford to do something as ambitious as a £13 billion stimulus package?

Right—so, the revenue from that group is not decreasing. I asked the question because there seems to be a contradiction between what is said on page 19 and what is said on page 46. One talks about—

I touch on that issue because about one sixth of income tax comes from 0.7 per cent of taxpayers. Throughout the document, you make a point of talking about the volatility of that specific group. I therefore think that we have to keep an eye on that issue.

Another point that comes through quite strongly in the report on a number of occasions relates to self-assessment. Looking at the graph on page 21, I was quite astonished at the jump in the outturn figures for self-assessment—they far exceed any others. Can you, for the record, explain that a wee bit?

There is just one more question from me, and then I will open up to colleagues round the table. In paragraphs 8 and 9 of annexe B to your report, you say that

“Scotland’s lagging earnings growth since 2016-17 has been exacerbated by much stronger earnings growth in the financial services sector in London and the South East”,

and that

“Scottish employment linked to activity in the North Sea has ... fallen, lowering the average participation rate in Scotland. These jobs ... were generally high paying, which has likely contributed to the divergence in average earnings between Scotland and the UK.”

What kind of pace are we talking about? What decline in overall earnings is coming from that sector, relative to the rest of Scotland? Obviously, that is fundamental—including for the green transition process that we are trying to undergo.

Given that we are coming out of a pandemic and that we have the Ukraine war, the cost of living crisis and high inflation, a GDP forecast error of 0.2 per cent is remarkable. I know that there have been one or two areas in which the figure has been quite high, but the Scottish Fiscal Commission has still done an excellent job.

I open up the meeting to colleagues.