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Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 4 May 2021
  6. Current session: 13 May 2021 to 11 September 2025
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Displaying 1237 contributions

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Finance and Public Administration Committee

Aggregates Tax and Devolved Taxes Administration (Scotland) Bill: Stage 1

Meeting date: 19 March 2024

Liz Smith

The gap, though, does not help us to work out elasticities of demand, as the convener rightly pointed out. That is the issue. As you have rightly said, in 2016, all parties agreed about the devolution of the tax—I am not arguing about that point at all—but I would argue that, to make people feel comfortable, it would be helpful to have more complete data, which would enable us to analyse the likely behavioural change and the elasticities of demand that will follow from it. It is difficult to do that if we do not have information from HMRC in that manner, so that we can compare. I would make that point quite strongly, and it should perhaps be mentioned in your engagement with the UK Government.

I come back to the issue of the finance bill. You are quite right to say that it is not a matter for the Scottish Government to decide on. However, do you think that, when it comes to the next session of Parliament and a likely parliamentary reform of some sort—of course, that depends on the make-up of the Parliament and on the new Presiding Officer—the Government would agree that that issue could constitute part of the reform of the Parliament?

Finance and Public Administration Committee

Aggregates Tax and Devolved Taxes Administration (Scotland) Bill: Stage 1

Meeting date: 19 March 2024

Liz Smith

You will not be surprised to hear that I will come on to the issue of a finance bill in a minute. First, I will follow up the convener’s questioning about data. With regard to the current UK levy, why is HMRC unable to tell us how much of that money is apportioned to Scotland? What is the problem there?

Finance and Public Administration Committee

Aggregates Tax and Devolved Taxes Administration (Scotland) Bill: Stage 1

Meeting date: 19 March 2024

Liz Smith

That is helpful. There have been growing calls in the Parliament for a finance bill, and, as Mr Mason has rightly highlighted, the public sometimes does not understand to a particularly high degree of transparency what is going on with the public finances. Anything that we can do to improve that process would be welcome, and I have certainly heard colleagues on all sides of the chamber suggest that it would enhance the Parliament.

Perhaps that is a debate for another time, minister. Thank you for your comments.

Finance and Public Administration Committee

Aggregates Tax and Devolved Taxes Administration (Scotland) Bill: Stage 1

Meeting date: 19 March 2024

Liz Smith

You mentioned that you have carried out estimates and studies to get an accurate assessment of that figure. I am struggling to understand why HMRC is unable to provide that information itself. I appreciate that you cannot answer that question, but it is not helpful that we do not have that data, because, if this devolved tax is to work well, we need to understand that.

You itemised the issues of fairness and simplicity, which I completely understand, but the other issue is the income that will be generated as a result. If that income was to be below what is already being taken through the UK levy, that would be an issue. We cannot make that judgment until we know what HMRC is currently doing. Do you accept that that is a bit of an issue?

Finance and Public Administration Committee

Aggregates Tax and Devolved Taxes Administration (Scotland) Bill: Stage 1

Meeting date: 12 March 2024

Liz Smith

I have a question about the possibility of behavioural change, which has been flagged up to us by other witnesses. The general message that we are getting is that not much behavioural change in how people operate is predicted. That said, are you aware of any behavioural changes that have happened as a result of the UK aggregates levy, which I think has been around for about 20 years? Are you aware of any instances of UK tax changes having a marked effect on elasticity of demand or whatever having affected revenues? Are you aware of comparable studies?

Finance and Public Administration Committee

Aggregates Tax and Devolved Taxes Administration (Scotland) Bill: Stage 1

Meeting date: 12 March 2024

Liz Smith

We are not predicting that there will be behavioural change. That is helpful.

Finance and Public Administration Committee

Aggregates Tax and Devolved Taxes Administration (Scotland) Bill: Stage 1

Meeting date: 12 March 2024

Liz Smith

In relation to the work that Mr Lindsay talked about, obviously Revenue Scotland has been speaking to HMRC, but has the latter flagged up any issues of concern?

Finance and Public Administration Committee

Aggregates Tax and Devolved Taxes Administration (Scotland) Bill: Stage 1

Meeting date: 12 March 2024

Liz Smith

That is all very encouraging. The bottom line is that, for the tax to be successful, there has to be good compliance, it has to be seen to be fair and people need to understand what it is for. It is also vital that we get some benefit from its revenue-raising aspect—indeed, that is the basis for the Scottish Government wanting to introduce it.

My second question came up in the previous evidence session and is on an issue that has been going round the committee for some time: the possibility of a finance bill that would allow the Parliament—not just this committee—to scrutinise taxation a bit more fully than is currently the case, and with greater clarity and understanding. I know that you cannot comment on Scottish Government policy, but would that help the process of getting more people to understand what is going on?

Finance and Public Administration Committee

Aggregates Tax and Devolved Taxes Administration (Scotland) Bill: Stage 1

Meeting date: 12 March 2024

Liz Smith

Boring technical can be good.

Finance and Public Administration Committee

Aggregates Tax and Devolved Taxes Administration (Scotland) Bill: Stage 1

Meeting date: 12 March 2024

Liz Smith

That was very helpful—thank you.