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I am sorry to jump in, minister, but this is not about UK tax law: it is about a devolved tax. It is—potentially, if it so wished—within the power of the Scottish Government to, for example, exclude any company that is based and incorporated in a tax haven from benefiting from an LBTT relief. However, you have chosen not to do so in this case. Why is that?

Thank you. Something that the committee has discussed quite a lot recently is the challenge that the convener pointed out, which is the financial gap that the SFC has identified. Even if we were to have substantial tax rises, such as those that you, and even my party, have proposed, that would mitigate or prevent potential cuts in public services, rather than expanding those services.

Do you have any concerns about public consent for that? Polls have consistently shown that people in Scotland, including those who are on higher incomes, are willing to pay more tax if that results in better, or more, services. If we embarked on tax rises in the next few years, we would simply be preventing cuts and it is hard for people to identify something that they have not lost, as opposed to something that they have gained. How would you manage public consent around that?

The STUC deserves commendation for that. Other organisations, bodies and representative groups come to the committee every single year wanting more money, but they are unwilling to say where it should come from or, indeed, they say that they want more public spending but they do not want tax rises—some even want tax cuts.

My final question is about the public sector estate. The union movement has been a champion of flexible working, remote working and working conditions that suit the needs of workers. Post-pandemic, that genie is not going back into the bottle, and that is true in the public sector in particular. However, that has resulted in a number of buildings that are either owned or leased by public sector organisations being largely empty or certainly significantly underoccupied. Does the STUC recognise that that is inefficient and not a good use of public money, and that therefore there needs to be reform in the public sector estate?

That should be done not simply as a cost-saving exercise, in the way that it was off the back of 2010 austerity, but in recognition of the fact that we no longer work in an environment where everybody is in the same office from Monday to Friday, nine to five.

The emergency measures that the Scottish Government put in place during the pandemic excluded companies that are based in recognised tax havens, such as the Cayman Islands, from benefiting from Scottish Government emergency relief. The Scottish Government is therefore clearly capable of recognising what is, and is not, a tax haven, and whether a company is based in a tax haven for the purposes of—albeit legally—avoiding tax.

The Scottish Government is allowed, within the devolved settlement, to make policy decisions to exclude such companies from, for example, public procurement grants or tax relief. It has chosen not to do so in this case of tax relief, so I am simply asking for the rationale as to why.

The premise of the relief is about providing companies with advantages so that, in exchange, they will pass on those advantages to the wider economy and their workers. Why, then, are companies that have, for the purposes of avoiding tax, based themselves in offshore tax havens such as the Cayman Islands, still allowed to benefit from this further tax break when they could have been excluded? That is entirely a matter for the Scottish Government.

Why have we not done so in this case? As far as I understand it—I am not a lawyer, but I have tested this particular area through policy a few times—the Scottish Government could require businesses to commit to paying at least the real living wage in order to qualify for the benefits that it will provide to businesses in the freeport areas, but it is not doing that.

I recognise that employment law is a reserved area and that power over it is not devolved. For years, we were told that, under schedule 5 to the Scotland Act, it is not legally possible to require businesses that bid for public procurement or which receive business grants from Government agencies to pay their workers at least the real living wage. That is now a requirement that the Scottish Government has delivered on—it is a legally binding requirement—so it turns out that we can do that within our devolved competences.

Let us put aside trade union recognition for a moment. I recognise that that area is untested, although I encourage the Government to test it.

It is clear that we can require businesses to pay workers—in this case, within a freeport—at least the real living wage. We have just done that with procurement and public grants, so why are we not doing it with the freeports?

I have plenty of other questions, convener, but it is probably time for other members to get a word in.

First, I would like some clarification. Regarding your income tax proposals, am I right in understanding that, beyond threshold freezes, you are not proposing any changes to the starter, basic and intermediate rates, and that you are only proposing the new £40,000 threshold for whatever the new higher rate would be called, without any change to the lower thresholds?

The rationale that you have outlined this morning is that companies will be given tax breaks in exchange for being encouraged to pass on the benefits thereof to their workers and to the wider economy. Is that not trickle-down economics?

If the fair work criteria are legally required of companies that operate in a freeport or that, in this case, benefit from LBTT relief, could such a company pay its workers the minimum wage—not the living wage—and refuse to recognise trade unions, but still access such relief, which is a tax break?