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Thank you. SPICe produced an interesting document, which you might have seen mentioned in the press. It says that because of the Scottish Government’s tax policy, some £500 million was raised in taxation, but only £148 million benefited the Scottish budget due to block grant adjustments. We have an explanation from SPICe, but will you talk about that a wee bit?

I thank members of the committee.

I have a couple of questions to wind up with. One relates to capital budget. Raw material prices are growing by between 5 and 15 per cent a year. You said that the agreement with the Greens would not threaten the delivery of Scotland’s capital projects that are already committed to but, clearly, if there is significant pressure on the capital budget because of inflation, that may make it more difficult to deliver some of those projects. What discussions have you had with the UK Government regarding an uplift to the Scottish Government’s capital programme budget?

Politics moves very fast in Scotland, and we now have the co-operation agreement between the Scottish Government and the Green Party, with ministers, including Patrick Harvie, a former member of this committee, being appointed this afternoon. What work has been done on the implications of that for the public finances? For example, the number of affordable houses to be built to 2032 is to increase from 100,000 to 110,000, although that will happen at a time of labour and skills shortages; £500 million is to be invested in a just transition fund for the north-east and Moray; and there is to be a fair fares review to provide a realistic alternative to car use and increase investment in active travel and public transport. Given the likelihood of the funding for those measures impacting on other Scottish Government policies and programmes, can you take me through the process of how the agreement will work as you take the budget forward?

A number of members, myself included, have raised issues with regard to tax and demography. One issue of concern is the need to grow the Scottish economy relative to the UK economy. We have real demographic challenges, and there is also a productivity issue. What steps will be taken on that?

As the Scottish Government recently pointed out, the UK has had the lowest economic growth of any north-west European state over the past 12 years or so since the financial crash, but Scotland does not seem to have done particularly well in comparison, as reflected in the block grant adjustment in some years. What can we do to try to increase productivity so that we can restore and improve the health of, and enhance, the public finances?

This morning, members of the committee received a detailed letter from the Cabinet Secretary for Finance and the Economy. No doubt colleagues will ask questions about that in the second session. She says in that letter:

“there is logic for publishing the MTFS alongside the Scottish Budget and thereby basing it on the updated SFC and OBR forecasts. Publishing it before the OBR October forecasts would mean having to use OBR forecasts from March, the effect of which would be to give a misleading sense of the fiscal outlook.”

Does the commission agree with that statement?

Thank you, cabinet secretary. I think that some members are having a wee bit of difficulty in hearing you clearly. Perhaps we can make some technical adjustments. If that is not possible, we will have to soldier on. Please bear with me for a minute.

I have been advised that broadcasting is trying to improve communications but that we should plough on in the meantime. I hope that you will be able to hear me, cabinet secretary. I will try to enunciate and to not sound as west of Scotland as I normally do in asking these questions, you being a poshie and all that. [Laughter.] You will probably be able to translate what Daniel Johnson is saying much more clearly than I could.

Congratulations, Daniel, and welcome aboard.

I have no relevant interests to declare.

Thank you very much, John.

I welcome everyone to the Finance and Public Administration Committee. We see from the papers that have already been distributed that it is going to be a very challenging year and, indeed, that it is going to be a very challenging five years, but I am sure that everyone is ready for the tasks ahead. We have a small but perfectly formed committee, and I am sure that we will all be able to work very well together for the good of the Parliament and the people whom we represent.

Item 3 is to choose the deputy convener. The Parliament has agreed that only members of the Scottish Labour Party are eligible for nomination as deputy convener of the committee. Therefore, I nominate Daniel Johnson as our deputy convener.

Daniel Johnson was chosen as deputy convener.

Item 4 is a decision on taking business in private. Do members agree to take item 5 in private? If anybody disagrees, they should type N in the chat box.

We agree to take item 5 in private.

I put on record my thanks to the Finance and Constitution Committee for its legacy report in session 5, which is very detailed. I am sure that everyone has looked at it, and I know that it will be very helpful to us over the coming months in considering our future work programme.

We will now go into private session for the remainder of the meeting.