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There is also the issue of cross-border purchases and so on, but there are sales taxes in the United States and Europe. They are quite common around the world, aren’t they?

The finance committee from 2011 to 2016, of which I was convener, looked at the matter briefly and we took the view that there was not enough on it. The Scottish Fiscal Commission was in an embryonic stage; we were not at the stage that we are at now; and it was hoped that, in future years, we would be able to look at the issue in greater depth. I should say that our predecessor committee in the last session of Parliament was very sceptical about this as a practical way forward.

However, it remains part of the Smith commission’s work. I take the view that the Smith commission is not necessarily set in tablets of stone. It happened some years ago now; I think that we have to evolve beyond it in some areas, and this might be one of those area where we have to say that this approach will not be a runner in the foreseeable future. Scottish Government officials are looking at the matter, yet, given that we can see no practical or pragmatic way forward, one has to wonder whether that is a good use of public resources.

Before I get trampled by people wanting to come in, because no one has so far, I will add to what you have been saying there. HMRC did a presentation this morning and it said that the changes between each publication in the past year were, indeed, the highest that they had been in the last decade at 9.81 per cent. Mark Taylor, you said:

“The implementation of VAT assignment would further increase the uncertainty, volatility and complexity of the Scottish Budget.”

I will bring in one of my colleagues in a minute but there are a couple of others who want to speak so I will bring them in first. First of all, David Phillips, to add a wee bit more to the mix here, you said that

“VAT has properties that make it a relatively poor candidate for devolution”,

although we are talking about assignment at the moment. Then you go on to say:

“The administrative difficulties of devolving VAT to Scotland should not be overstated”.

Is the issue for you that it would perhaps skew economic activity as well? For example, if food is VAT zero rated and in other areas of the economy VAT is 20 per cent, that would perhaps skew Government policy and decision making, if it were devolved, into areas where it was likely to have a VAT return.

Charlotte Barbour, you have said that

“VAT is the only ‘assigned’ tax in the package of taxes that fund Scotland”,

that the UK Government would retain

“full legislative and administrative responsibility”,

and that

“The aim of VAT assignment is to bring greater accountability to decision making in Scotland. However, the Scottish Government will have no direct controls over VAT rates and policy.”

That goes back to what you were saying initially.

Yes. For example—and, John Ireland, I do not know how you would feel about this—HMRC said that its survey would be 2.3 per cent plus or minus at a 95 per cent confidence interval. It would be looking for just a ballpark prediction, but we have seen the revisions that I mentioned earlier—9.81 per cent out in the current year, which is the highest for over a decade. It almost seems as if volatility has increased rather than decreased as it has progressed with looking at this. How would you feel about that? I know that 2020 was an outlier; I appreciate that.

Lastly from me before I open it to colleagues, I understand that the figure for fines, forfeitures and fixed penalties is at approximately £30 million at the moment but that there will be a flat deduction of £25 million from the block grant going forward. Is that linked to inflation at all and are those figures accurate? We have two sets of figures—£30 million for this year and £25 million from now on, which seems to be a reduction.

I am sure that a future UK Government could easily reopen those negotiations if it wanted to be more generous to Scotland.

We have covered all the changes that are mentioned in the summary of changes to the fiscal framework, except one. It is a fairly minor one, but it would be remiss of us not to touch on it. What will happen to the coastal communities fund? What will that mean for Scotland? We understand from the agreement that that fund will be absorbed into Barnett, and that there will be no immediate impact on funding. What are the long-term implications?