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I have to say that the choice of taxes does not fulfil Adam Smith’s four criteria of certainty, proportionality to taxpayers’ ability to pay, convenience and efficiency. I think that aspects of the chosen taxes—especially VAT—are extremely contentious when it comes to who gets what and whether Scotland benefits disproportionately from an assignment. However, that is undoubtedly a discussion for another day.

I just want to mention a couple of other wee things before I let others in.

First, on the North Sea, there are a lot of highly paid workers there—71,000 at the last count, I think—who earn more than the Scottish average and pay a lot more in tax than the average person. Is the Scottish Government looking at how the switch to green jobs will impact the tax base in that respect?

I do not want to take up too much of your time, minister, but I just want to ask a second question. Has the Scottish Government looked at the issue of behaviour change? Obviously, if we are short of taxes, Governments will be tempted to put them up. However, if you increase taxes in the short term, you might well dissuade people from investing in or living here and therefore paying their taxes either in the rest of the UK or elsewhere, which means that you effectively lose everything. In that respect, is half a loaf is not better than no bread?

I know that today’s announcement on Cambo, which has been made as a result of rocketing fuel prices and the Russia-Ukraine situation, shows that North Sea oil might have a wee bit more life left in it than we thought, but this is a long-term issue. Behaviour change will always be with us in relation to taxation, so what is the Scottish Government doing about it?

We are talking about the Scottish tax framework, so I just want to see what is Scottish about it. How is it different from the UK framework? It was my understanding that this principled approach was a significant difference, but I would have thought that any legislature anywhere would want to try to make sure that avoidance was minimised when it set a tax. Otherwise, what is the point in setting a tax?

Thanks for that response, but what you have outlined is not really public engagement, is it? It involves stakeholders and people like that. How many will there be at the citizens assembly, for example? A hundred folk?

Is that different from what happens in the UK?

My final question is on similar lines. I am curious as to why the focus is on those three taxes: national insurance, VAT and the remaining element of income tax—in other words, tax on savings and dividend income. Those are quite complicated taxes. I will give an example of a business in Glasgow that supplies another business in Manchester, which then sells something to a guy in Aberdeen. That involves a complex chain of VAT. In previous sessions, our predecessor committees have looked at how difficult that is and where the UK Government would suggest that VAT would accrue to Scotland—or not, as the case may be.

Why have you not picked fuel duty, for example? When people buy fuel, that is in Scotland. Because of the geography of the country, you would probably get a disproportionate amount of it. Excise duty is another possible example. I am pretty sure that, when it comes to tobacco and alcohol receipts, we exceed our 8.3 per cent population share. If we had control of excise duty, we would get a higher proportion of it. Those taxes are much easier to collect. That assumes, of course, that the UK Government would be in any way interested in devolving those taxes.

Why have you picked the priorities that you have picked, when there are other taxes that could be devolved that would be a lot less contentious from the point of view of how they are calculated, would be much easier to deliver and would bring in a higher proportion of revenue?

Australia has had road pricing for 20 years. You have an electric chip in your car, you drive along a motorway and you do not have to stop at any tollbooths or anything. You drive along, and you pass these things every 5km or whatever it happens to be. It is almost like being in a taxi—the meter keeps ticking over. If Australia has been doing that for 20 years, there is no reason why it cannot be done here, although, as you said, it will not be very popular. It would probably have to be met with reductions in other motor-related tax. One of the things about road tax is that it is not all spent on the roads—it just goes into general taxation.

Well, they will not happen without significant fiscal measures, so I think that it is an important fiscal issue for us. If farmers are not incentivised, they will just not do it; it is as simple as that.

Thank you for your evidence. We appreciate your giving us your time this morning, and thank you for your excellent report and for answering our questions. Your report will inform the committee’s approach to examining the finances of our net zero ambitions and areas beyond that, and we will consider the issues again at a future meeting.

We will now move into private session.

That was excellent—it was fascinating stuff, so thank you very much. It has stimulated our thinking on the subject and has probably generated quite a lot of questions from committee members.

I will open with some questions and then we will go around the table. In your last slide, under the “Fiscal Measures” heading, you talk about carbon pricing mechanisms matching a UK solution. You also mention devolved taxes and subsidies under that heading. It is really important that we take people with us on this journey, and I think that one of the most difficult things, as you list under your second heading, “Principles”, will be ensuring that what is done is proportionate.

You spoke about behaviour change and about good will from the public, which is what we need to be able to change behaviour. It is about how we marry those together. You said that, for landfill taxes, everything was set out over a number of years so that people could see the road to be travelled. Should the Scottish Government try to do that, so that we have a 10-year programme involving all the issues that you have mentioned, including how we reach various milestones along the way, where we think changes should be made, at what time they should be made, and by whom?

That concludes questions from other members of the committee, but I have one or two wee issues to raise.

Biodiversity is one of my great concerns. In the past couple of weeks, I have read in The Economist that, excluding our seas, 96 per cent of the biomass of all vertebrate creatures on earth is either human or the livestock that we raise to feed us. For example, 70 per cent of all bird life on the planet is poultry.

Some of the measures in Sweden with regard to lynx have been touched on. I know that a lot of work is being done to try to restore the Iberian lynx, which was on the verge of extinction.

What more can we do on biodiversity? For example, you have spoken about perhaps up to half of tree plantations being native woodland. We have done a lot in Scotland since the first world war, when our tree cover was down to 2 per cent. That is now up to around 17 or 18 per cent. It is not quite like that of Japan, which is 73 per cent. It has been like that in Japan for centuries because Japan has never denuded its forests. What more can we do to try to restore biodiversity, which has halved worldwide since the 1970s?