Seòmar agus comataidhean

I can come in at any point.

Like John Mason, I apologise for having been late this morning. It had nothing to do with buses or trains, either; it was due to a much more mundane issue about my pass and gaining entry to the building.

Convener, may I check something so that I will not be wasting time by duplicating matters? In its initial questions, which I missed, did the committee cover the GDP deflator?

Those were really interesting points, so I appreciate your circling back to my previous question.

My final question is on a different area. When lowering the threshold for the top rate of income tax has been considered in the past in Scotland—recent tax papers by the Scottish Trades Union Congress and the Institute for Public Policy Research have included proposals in that area—the counterargument has been that that would result in significant behaviour change and would not raise additional revenue.

Part of the argument is that a Scotland-specific reduction in the threshold could result in people on higher incomes simply moving elsewhere in the UK to avoid paying the additional rate. If the Scottish Government follows the UK Government’s lead in reducing the threshold to £125,000, that behaviour change element will be eliminated, although there will still be the prospect of people converting their income into other forms to avoid paying income tax.

Do you expect tax avoidance-related behaviour to change in that regard? I have to say that I have never found the argument to be massively credible, but I am interested in your thoughts on it.

You have hit on a key area that really needs to be considered in the review of the fiscal framework, which is the perverse incentives that it creates.

I hope that you do not mind me jumping between a few different areas. First, I will follow John Mason’s line of questioning around inflation. I am interested in your thoughts on debt interest. It feels as though the era of cheap money is over globally, at least for now. However, the UK went through a particular episode with debt interest rates on the back of the mini budget. What is your expectation of the rates over the next couple of years?

I will jump to a completely different area. I take on board what you said earlier about neither of you being an energy policy expert, but are either of you aware of any work being done on the impact of windfall tax loopholes? I think that Shell was the company that most recently reported that it has managed to avoid paying any windfall tax. That was as a result of its North Sea exploration activities giving it sufficient relief from the tax. Are you aware of any work being done to identify whether that loophole creates an incentive for companies to pursue exploration that they had not planned before the introduction of the windfall tax?

If the decision is made at a later point to include children’s services, that will presumably entail a calculation of how much of what local authorities currently spend on children’s services will be moved to the new delivery bodies. Given what I just said about the evidence on the high level of integration in some authorities between children’s care services and the other services that they provide to children, how will you make that calculation of what to take from what is currently in the local government general revenue grant?

I am sure that local government will welcome that statement, but I am interested in the process by which that will be achieved. At the heart of my question is the issue of how complicated the process will be, given how well integrated children’s services are in some places, which means that it will be very difficult to disaggregate them. I am interested in what process you will follow to make that calculation and to ensure that the change is cost neutral.

I am happy to finish at that point, convener.

I accept what the minister has said on the current state of play being a postcode lottery across local authorities in relation to the services that are provided to children. A lot of the evidence that we have taken in recent weeks, particularly from local authorities, made the point that, especially in the areas where children’s services are performing well, they are extremely well integrated with the other services that local authorities provide to children, particularly education.

Surely, centralising children’s care services to the new bodies would be a step backwards in relation to our attempts to create a consistent network of support for each individual young person from all the various places from which they might need that, whether it is an education setting, a care setting or something else.