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I do not have specific data in front of me with regard to the forecast for the number of people working in oil and gas in five or 10 years’ time. That is driven by a number of factors and, from a public policy perspective, as we would all recognise, by many levers that are not in the powers of this Parliament.

The fundamental point that I am making is that, as we all understand, the transition away from oil and gas will be a global phenomenon. It is an imperative—it is required. Without it, we will not meet our 2045 targets. The broader policy objective is that we have a just transition that enables people who are operating in that sector, with the high skills and expertise that they bring, to be deployed in the emerging opportunities of a green economy.

As I said, delivering a just transition to net zero presents significant economic opportunities, so, from a tax perspective, the ultimate objective would be that people in that sector and others would have the opportunity to move into those high-paid and good green jobs that we want to be created. That would help to provide a steady tax base to generate the revenues that we require.

Alex Doig, can you add anything on the data that we have available?

I take your points, but there is the question of impact. I mentioned fuel duty, but VAT is a key element of the cost at the pump, too. I take your point about the tensions around potential administrative complexity and deliverability, but those can be worked through by designing and implementing the devolution of tax in a way that is consistent with the Adam Smith principles. When it comes to what we would do if we had such levers at our disposal, control of VAT and national insurance contributions would be quite impactful in allowing us to shape policies more appropriately for Scotland.

Yes, I do. There was an opportunity for those matters to be covered in that dialogue.

I would also mention that although the bill does what was set out in the order, it uses the date of April 2020 rather than April 2021, and there was an opportunity for consultation and direct engagement on that issue between ministers and business organisations—and, importantly, the Parliament—when that order was considered. I am confident that there has been sufficient opportunity for engagement and consultation in the extensive process that I have outlined. The process has allowed issues to be aired and considered, and business has had the opportunity to feed into it.

I am happy to do that. I sought to address the point about consultation and stakeholder engagement in my response to Mr Dey. Certainty is at the heart of what the bill seeks to do.

On how we go forward, as I said in my opening remarks, the key ask on non-domestic rates from business ahead of the budget was to avoid the cliff edge on 31 March. That is exactly what we have avoided through the RHL 50 per cent relief for the first three months of the financial year.

The certainty that the bill will provide, the engagement that took place between the announcement of our intentions and the order being made, and the non-domestic rates policy for the forthcoming financial year, which was informed by the key ask from business, show that in relation to engagement and providing certainty, the Government is absolutely committed to being consistent with the principles that are outlined in the tax framework.

That is a good question and, in answering it, there must be recognition that it has not been possible to help every single business. We are restricted, to an extent, by the mechanisms for getting money out of the door that are at our disposal.

One of the ways that we are seeking to solve that is through the discretionary funding that we have provided to local government, and I have already referred to the latest tranche of £80 million. That reflects the recognition that councils have local knowledge that they can bring to bear in supporting businesses.

We have also sought a few other mechanisms, such as the Scotland loves local fund, to provide support for businesses in other localities more generally. However, the key point to come back to is the fact that we have provided a total of £4.5 billion, £1.6 billion of which responded to the key ask of business, which was to avoid the cliff edge on 31 March.

Obviously, the targeted business support covers a range of actions. Extensive and specific reliefs have been delivered through the NDR system in the past two financial years, and they will address the ask in the coming financial year to avoid the cliff edge. Various business programmes have also been in operation throughout the pandemic. Finally, there has been the discretionary money for local authorities, the last tranche of which is £80 million, and local authorities will have the discretion to decide how to apply it to their own areas.

I hope that that gives an overview of the support that has been provided and how it relates to what we have done on NDR relief. [Interruption.]

I do not have the details of that in front of me. We have published our most up-to-date statistics on the delivery of resource on the Scottish Government website, and local government provides the Scottish Government with returns on its spending for statistical analysis and monitoring.

On how funding is agreed with local government through the Convention of Scottish Local Authorities, the £80 million was subject to principles agreements about what we are trying to achieve. Whether it be through the publication of overall business support, monitoring the returns from local government, or the principles agreements that we have with COSLA for allocating funding, there is a range of ways in which we monitor the money, which is what Mr Briggs is driving at, and make sure that we can evidence that it gets to those who need it.

No, the money has been committed as part of the budget process.

I will not get into the intricacies of the budget process but, as you will be aware, we have found ourselves in quite a challenging situation. I do not want to draw direct correlations between the MCC money and other parts of the budget, because it is quite complex. However, with, for example, the resources that we anticipated as supplementary estimates towards the end of last year and in the early part of this year, we have received less than we expected. Beyond that, we were led to believe that we would receive additional money to support the cost of living, but we did not receive that and we had to find that £290 million from within money that we had already committed.

Fundamentally, the UK Government gave us an indication of money that was going to come, but the money was less than indicated and new commitments had to be met from it that we had not been led to believe would have to be met from it, such as the cost of living package. To take an example, we expected to get £841 million of supplementaries. That went down to £827 million, if I remember correctly. Then, rather than getting £290 million of additional money for the cost of living, we had to take that £290 million from the £827 million.

We explored that situation last week at the Finance and Public Administration Committee in the spring budget revision. I mention it to give you an example of the complexity that is involved at this point of the year. The key point that I come back to is that we have delivered significantly more in business support than we have received in consequentials and we have worked to get that money out of the door as quickly and effectively as possible to the businesses that need it.

As you will be aware, we indicated our intention to act on this in late June. In other words, it preceded the order, which went before Parliament in the autumn. In the interim period, extensive consultation was undertaken by me and my colleagues, the Cabinet Secretary for Finance and the Economy and the Minister for Business, Trade, Tourism and Enterprise, and we met and engaged thoroughly with all the major business representative organisations across Scotland. If memory serves, I conveyed to the committee that the issue that you have highlighted was not raised as a priority at that point.

Following that, the Valuation and Rating (Coronavirus) (Scotland) Order 2021 was considered, with Parliament taking extensive oral and written evidence, on which I was able to answer questions at a meeting of this committee in November. Throughout that process, we have been clear about what we are doing. Indeed, we even announced in the programme for government that we would introduce primary legislation in year 1 of this session, a commitment that I reiterated to this committee in November.

We have continuous and regular engagement with business. As I have said, in the period between announcing the intention to act on MCC and the order being considered in Parliament, we had extensive engagement with the business community, and—in my experience, at least—the issue that you are talking about was not raised to any meaningful extent.

Last year, amendment regulations were laid in response to the financial pressures faced by local authorities as a result of the pandemic. The Scottish Government worked jointly with the Convention of Scottish Local Authorities to identify ways for local government to address the funding pressure. The amendment sought through the Local Authority (Capital Finance and Accounting) (Scotland) (Coronavirus) Amendment Regulations 2021 allowed a local authority to reduce the amount of any of the statutory repayments that it was due to make to the statutory loans fund in either the financial year 2020-21 or 2021-22, but not both. That would reduce the expenditure of a local authority in that financial year, thus creating additional financial capacity to meet Covid-19 costs.

Given the on-going challenges of responding to the pandemic, COSLA requested a further one-year extension to that flexibility to allow a local authority to reduce repayments to the statutory loans fund in 2022-23. Again, councils can make use of that flexibility only in one financial year. Most councils did not utilise that flexibility in either 2020-21 or 2021-22, but they have indicated that they may choose to use this flexibility in 2022-23.

Under normal circumstances, that is not something that ministers would support. Requiring the repayments to be made in the financial year when they are due is prudent financial management. It ensures that both current and future taxpayers are charged for their share of the capital expenditure costs of assets being used to deliver services. However, these are not normal circumstances, and it seems right to allow the flexibility to be extended through the amendments made in the draft regulations before you. We have made it clear to local government that the flexibility should be used only as necessary to address funding pressures arising from the pandemic, and it may not be used to grow reserves.

The 2021 regulations include a provision to ensure that future changes to loans fund accounting arrangements can be delivered through statutory guidance, rather than requiring further amendments to regulations. That change, which was due to come into force on 1 April 2022, is to allow future harmonisation between accounting standards and statutory arrangements. In order to facilitate the extension to the loans fund repayment flexibility, the draft regulations defer by one year the effect of that provision in the 2021 regulations.

Separately, the draft regulations change the audit completion deadline for local government 2021-22 annual accounts, as requested by Audit Scotland, in order to address the continuing challenges resulting from the delay in auditing the 2019-20 and 2020-21 accounts. Both Audit Scotland and councils are keen to return to the original statutory deadlines for 2022-23.

In summary, the draft regulations provide a financial flexibility that has been asked for and will be welcomed by local authorities. The extension of the audit deadline will alleviate some of the strain on council staff and auditors.

I encourage the committee to support the instrument.