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Okay. My colleagues are quite keen to come in, incidentally.

The financial memorandum refers to the £10,000 benchmark for materiality, which

“takes into account the relative cost of changes in proportion to the overall budget of the affected organisations ... and the difficulty in being precise when dealing with smaller estimates.”

However, the approach of presenting costs as material and immaterial and using the £10,000 figure as a benchmark is not the usual approach that is taken with Scottish Government financial memoranda. As the Finance and Public Administration Committee, we are trying to interrogate apples with apples, not apples with pears. Why have you decided to use that approach?

Yes. Paragraph 6 of your report says:

“The Scottish Government ... controls most public spending on Surface Transport in Scotland but many aspects of its regulation are reserved, for example banning polluting vehicles or imposing more stringent emission standards.”

You go on to say that that

“illustrates how policy decisions at the UK level are important in ensuring the Scottish Government can meet its net zero targets.”

Also thrown into that mix are shipping and aviation, for which responsibility is also reserved. How realistic is it to expect Scotland to meet its targets without very strong co-operation from the UK Government?

Ross Greer will open the questions from committee members.

LULUCF.

Thank you for yet another excellent report. We have a commitment from the Deputy First Minister to having a debate on fiscal sustainability between now and the summer recess, and we will continue to press for that.

Thank you for all your evidence and for answering our questions. I hope that members will be able to come to the Scottish Parliament information centre event from 8.30 to 9.30 tomorrow morning in the Holyrood room. Bacon rolls and scrambled eggs are included, and I look forward to seeing you tomorrow.

With that, I move the meeting into private session. The public proceedings are finished for the day, and there will be a five-minute break to allow the witnesses and the official report to leave and to give members a natural break.

I will now open it up to colleagues. The first to ask questions will be Liz Smith, followed by Michelle Thomson.

I will quote paragraph 27 of the financial memorandum. It says:

“The figures contained within this Financial Memorandum are the Scottish Government’s best estimates of the costs of the provisions of the Bill”.

They are not the best estimates, are they? The figures are nowhere near the costs.

Ultimately, this is taxpayers’ money, so there is a duty to ensure that the figures are accurate. We do not want a situation in which a bill goes through and the figures are, for example, chronically underestimated—as appears to have happened in this case—and then that money has to come out of front-line policing services, for example. That is what we could be talking about if the issue is not looked at, which is why we are taking it so seriously. It is important that we get this right.

Speaking on behalf of the whole committee, we look forward to getting a revised financial memorandum prior to the completion of stage 1 evidence, for us to be able to scrutinise it in order to inform the lead committee.

I thank you, gentlemen, for your evidence this morning and look forward to seeing you again before too long.

We will take a five-minute break to allow for a change of witnesses.

The next item on our agenda is an evidence session with the Scottish Fiscal Commission to discuss the commission’s report “Fiscal Sustainability Perspectives: Climate Change”, which was published on 14 March 2024.

We are joined by Professor Graeme Roy, chair, Professor David Ulph, commissioner, John Ireland, chief executive, and Claire Murdoch, head of fiscal sustainability and public funding, all from the Scottish Fiscal Commission. I welcome them all to the meeting and invite Professor Roy to make a brief opening statement.

That thread of shared endeavour runs right through the entire report. One example is the issue of flooding. The recent flooding in Angus cost the Scottish Government £15 million through the Bellwin scheme, whereas the flooding that the UK Government dealt with south of the border cost £10 million, and, as a result, there was only a £1 million consequential. Therefore, there could be disproportion. Of course, that could work the other way, as you have pointed out in the report. There could be an incident affecting only some parts of the UK, and Scotland would get a Barnett consequential even though it was not impacted. There needs to be a bit more flexibility in that respect.

Prior to the update of the fiscal framework, we had the concept of a Scottish economic shock. Obviously, that has now been removed, but should there be something along the lines of, say, a climate shock? Instead of our having to deal with the sort of example that I have just given, with approaches to flooding being enacted in such a way, could we have something more climate focused?