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As you would expect, I will preface my remarks by saying that you will understand what the Government’s objective is, constitutionally, and what its views are on where fiscal decisions should be taken. My earlier comments were made specifically in the context of the fiscal framework review. I set out some of the immediate policy challenges that we face that cannot be addressed as a result of our not having control over the three taxes in question. That is why those three taxes are highlighted. As I mentioned, there is also the added complexity of the interaction with the benefits system.

Decisions around the process for devolution of those taxes, the implementation of that and the operation of the devolved system would have to be consistent with the framework. As far as tax authorities are concerned, HMRC operates with the devolved elements of income tax. That works effectively and efficiently, as was recognised through the independent evaluation. There is the role of Revenue Scotland in relation to the two fully devolved taxes, as well as the role of local authorities in relation to the local taxes.

The approach to operation would be underpinned by consideration of what would be consistent with the framework for tax. That is how that decision would have to be taken. We are approaching the fiscal framework with a set of asks. What emerges from that will ultimately determine questions around delivery and operational matters.

We have set out the three asks in the context of the fiscal framework review. Should there be opportunities for further devolution of tax beyond that, we would, of course, want to explore those. A topical example is a potential windfall tax, the possibility of which has been raised in exchanges in the chamber.

If opportunities for further devolution of tax were to arise, we would want those opportunities to be taken, as we believe that all tax powers should be in the control of this Parliament. However, our commitment, which we prioritised in the manifesto, was that our key focus in the fiscal framework review would be the three taxes that we mentioned. The precise nature of the operational arrangements will be contingent on the outcome of that.

You identify a tension that exists between administrative complexity and policy impact. The ability to take decisions on the taxes that I have referred to—especially national insurance and VAT—offers the potential for significant policy impact. I am not saying that that is not the case with other taxes. I appreciate that, with the cost of living crisis and the events that are unfolding in eastern Europe—which the framework predates—fuel duty has taken on an added dimension.

My key point is about the issues that we could address if we had powers over national insurance and VAT, examples of which I gave earlier: the marginal rate that exists between the higher Scottish rate and the upper earnings limit, and the implications of VAT for the deposit return scheme and for our work on decarbonising heat in buildings. You will be aware of some of the challenges that exist with regard to VAT in relation to the refurbishment and renovation of properties. There are areas where control of those taxes could be impactful.

There is also the question of going in with a clear set of asks and objectives with regard to further devolution of tax policy in the context of the fiscal framework review.

My final point, which relates to a point that Mr Johnson made, is to recognise that the taxes in question are significant revenue-raising taxes. If we had a broader suite—or basket—of taxes, we would be less reliant and exposed to volatility on income tax.

It is not our policy to have a revaluation of council tax at this time. We have a commitment through the joint agreement with the Scottish Green Party to have a deliberative process that will culminate in a citizens assembly looking at sources of funding for local government, including council tax, which will be delivered in this session of Parliament. It is a priority for me as public finance minister, and we are taking forward that work.

Ultimately, it will be for Parliament to respond—Government will of course respond, too—to what the citizens assembly concludes should succeed council tax or what should change in council tax. Ahead of that, we can provide certainty and continuity with our existing arrangements on council tax. Once the citizens assembly has had the opportunity to consider the matter in detail, we can take on board those recommendations and move forward from there.

As you will appreciate, the Scottish Government’s view is that this Parliament should enjoy the full fiscal levers that an independent country would enjoy. Short of that, we have had some devolution, and we have highlighted three areas—income tax, national insurance and VAT—in which we think there can be further devolution.

Ultimately, in going through the section 80B mechanism, the UK Government would have to make a judgment as to whether it felt that any new national tax in Scotland would impact on the wider UK economy. That is where the challenge would arise.

That is because it is about how one specific tax operates. The tax framework is designed to be a high-level and accessible document that will inform people and provide transparency on how we take decisions.

For example, if we were do a deep dive into the operation of the fiscal framework and block grant adjustments for income tax, it would necessitate doing the same across every single tax that is referred to in the tax framework. As such, the document would go from being a concise high-level document that seeks to provide clarity to being quite a dense one, which, ultimately, would not realise its stated purpose.

Of course, there is voluminous material on the operation of the fiscal framework. We set out income tax policy as part of the budget and we have a specific debate in Parliament on the rates resolution, so there is an opportunity for fuller consideration. We are transparent about how we engage with the UK Government on the upcoming review of the fiscal framework. I take the point, but, ultimately, if we went into huge detail in the document on the operation of the fiscal framework, it would start to lose its overall purpose.

Alex Doig might have an insight into what consideration was given, in the development of the tax framework, to what was included and what was not included, which might help to elucidate some of the points that I am trying to make.

As you will be aware, there was a review of business rates in England. Ultimately, that review recommended that England should start doing things that we are already doing up here, short of revaluation cycles, such as implementing something like the business growth accelerator. That is an example of a neighbouring jurisdiction that has considered the issue and did not land on a proposition that involved fundamental and wholesale reform.

We have made a manifesto commitment to consider an online sales tax. I appreciate that a request for that has been made by people who operate in the retail context, given the difficulties that our town centres and high streets have been facing. Various calls have been made to level the playing field—that is not language that I would use, but that is how it has been characterised by some stakeholders. However, we must also be cognisant of the work that the UK Government is doing in this area, as there is the potential for a UK-wide digital sales tax.

To go back to the original point about NDR, we have to get to the point of revaluation and let the Barclay review bed in. We are considering how we will respond to the key points that were identified by the Fraser of Allander Institute, but we recognise that having the data in place would allow a more informed discussion of potential options for further reform. What we are talking about is a first step.

This relates in the first instance to how the document itself—which I have described as a foundation document—was created. There was extensive consultation. There was a pre-consultation process with Revenue Scotland and other parties; we had the public consultation over September and October; and, following that, we had further engagement with stakeholders, including Revenue Scotland, to refine the proposals in the framework. As a result, the framework reflects that extensive engagement.

Let me give you one or two specific examples of our process of engagement. One of the commitments in the work programme relates to the additional dwelling supplement review, which is under way at the moment. We have undertaken a public consultation, which closed earlier this month, and we have also had significant engagement with stakeholders at official and ministerial levels, with a round-table discussion at the start of this month that I chaired. We will respond fully to that process during the summer.

That is an example of what is happening in one area. Another area of the work programme—and one that reflects the joint agreement between the Scottish Government and the Scottish Green Party—is council tax, with the establishment of a working group to look at deliberative processes, culminating in a citizens assembly to look at the resourcing of local government, including council tax itself. It is an example of engagement of the widest possible kind, and I hope that what I have said demonstrates the wide array of ways in which we are taking forward our commitment to transparency and engagement with the people of Scotland on how we design tax policy.

Is there a specific aspect of evaluation that you are concerned about, or is it just evaluation overall of how the framework—

With the wellbeing economy, we are committed to the wellbeing economy metrics. The national performance framework is published online and routinely updated to demonstrate performance against the national outcomes. With stable revenues, we have a process of reporting through outturns, consolidated accounts and the budget process.

I appreciate that, ultimately, responsiveness to societal shifts is reflected as and when it happens, and that it depends on what the policy response is. Perhaps it is slightly more challenging to evaluate that, but in the other areas—stable revenues, the national performance framework, and the wellbeing economy, for which we will develop metrics—clear data will be provided to allow any individual, organisation or indeed Parliament to evaluate those independently. That also allows Government to evaluate the performance of tax. Those means of evaluation exist independently of the framework.