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I have found the conversation about the inspectorate—particularly the question about who the inspector should be—to be very interesting. Given what has just been said and remarks in your report, Professor Muir, about the need to make greater use of peer review processes and for inspectors to have recent first-hand classroom experience, does that all point towards a system in which the ideal inspectorate is largely staffed by teachers who are on a three-year or five-year secondment? If we want there continuously to be people with very recent classroom experience, people cannot be in post as inspectors for a particularly long period of time, because they will get further away from the last time they were in the classroom. I think that that is an attractive proposal. Does that not lead us to say that the inspectorate should be seconded teachers on short-term contracts?

The paper says that the Government will explore a digital sales tax. Are you in a position to give us a bit more detail on how that process will be taken forward? Presuming that a UK-wide digital sales tax will not be forthcoming in the immediate future, and given the difficulties that have been mentioned about the devolution of new national taxes to Scotland, is that something that you are considering with COSLA as a potential local tax power? I am keen to understand how we will move forward from a commitment in principle to explore the power to a process that would flesh that out.

I return to the convener’s original line of questioning about fiscal sustainability. We know that we will need to significantly increase tax revenues in order to plug the gap with the shortfall in income tax that has been forecast, alongside the increase in social security spending and, on top of that, the additional spending that we all acknowledge will be required to hit our child poverty and climate targets. A lot of the discussion so far, and much of what has been referenced in the framework, has emphasised the need to grow the taxable economy and improve economic performance. Other points have been made about folk in higher income tax bands replacing those who are moving out of the oil and gas sector.

Is it the Government’s position that wider changes in economic policy and wider improvement in economic performance are the primary ways to increase tax revenue, or is there an acknowledgement that direct changes will need to be made to tax policy in order to increase revenue by the amount that is likely to be required?

I turn back to the Fraser of Allander Institute report on the small business bonus scheme that the minister mentioned. The top line conclusion that I drew from that report was that there is essentially no hard evidence that the scheme is improving economic performance. Can you comment on that? I know that the Scottish Government is developing its full, formal response, but what is your initial response? Given the amount of money that it has put in to the scheme, it seemed an alarming conclusion for such a respected institute to essentially say, “There is no evidence that this is working.”

It is surprising.

I agree absolutely with the FSB that we need a tax system that supports small businesses. However—and forgive me for being flippant—if we ask those who receive free money, “Is it a good idea that free money is given out?”, of course they will say yes. The Fraser of Allander Institute’s conclusions were concerning, given the amount of money involved.

Just to dig down a bit deeper on that, exactly what data is missing? Even before this report was put out, the tax framework document said:

“We will pursue a greater understanding of the drivers of devolved tax performance”.

What specific points of data are we lacking at the moment?

Thank you for that really interesting presentation, Callum. I was particularly interested in some of your comments about the potential of procurement and in your reference to the Bute house agreement, which underpins what the Government is currently doing.

With regard to conditionality in procurement for net zero purposes, the agreement commits to consulting with regard to

“businesses receiving grant or loan/equity funding of over £500k and for major contracts”

on a condition

“to reduce scope 1 and 2 greenhouse gas emissions at a level consistent with Scotland’s 2045”

targets, including a requirement to publish a carbon management plan and to submit a copy of it to whichever Government body is providing the funding.

As one of the folk who wrote that particular section of the agreement, I hope that, given your earlier comments, you can tell us whether there are certain areas that we have missed or on which we can build. If you were one of the people that we consulted on that condition that we might put on public procurement, what would you tell us could be done to make that more effective? At the moment, the commitment on those businesses is just to say that they will reduce emissions and to provide a plan in that respect. Could we ask for more?

That was really useful. When the formal consultation on that starts, I might come back to you in a separate capacity to ask you to put that in writing.

I was quite taken by your comment in the report, particularly given the urgency of the climate emergency, that reform of existing levers of taxation is perhaps more attractive than the creation of new ones. I am interested in your thoughts on the potential for reform in a couple of areas.

You may not have seen it, but last week the Fraser of Allander Institute published a report, which was commissioned by the Government, on the small business bonus scheme and its relative effectiveness. I am interested in any views that you have on how mechanisms such as the small business bonus scheme could be reformed. There are other areas where we have more latitude for reform, such as council tax. There is potential for significant reform or even replacement of the council tax in the current parliamentary session, or at least for starting that, because the council tax is complex and reform would take a while to implement.

Do you have any thoughts on the direction of travel in relation to the reform of either economic incentives such as the small business bonus scheme or local taxation such as the council tax?

That is useful. To be fair, the small business bonus scheme report came out only last week and it came out quite quietly, so I did not necessarily expect you to have noticed it.

I have a final question. You are relatively critical—in a way that I would agree with—of the forestry grant scheme, in that it focuses on the economic benefits of commercial forestry. That essentially means a monoculture—Sitka spruce et cetera—that certainly does not contribute to the restoration of biodiversity or tackle the nature emergency. What reform are you looking for in forestry grants? What would a successful version of the scheme look like if the overarching objective is to tackle the climate and nature emergencies?

Professor Heald, you mentioned the need for a UK-wide discussion around taxation, which I absolutely agree with. I accept that most national tax powers are reserved. We do not have the power to create new national taxes in Scotland, but we do have powers over income tax, land and buildings transaction tax, non-domestic rates and so on. We can also create any new local tax that we wish to—we can create new taxation powers for local government. Does the resource spending review offer an opportunity to have a discussion about taxation in Scotland? That would perhaps not be as comprehensive as what you are looking for UK-wide, but should we attempt to discuss taxation in Scotland in the context of devolved constraints?