Seòmar agus comataidhean

I will highlight two elements. Within the overall package for each of the green freeport sites, there is £25 million of seed capital available. More crucially, on that point about having a coherent approach and taking into consideration infrastructure, including schools, local government is part of that consulting approach and is a key partner with regard to its responsibilities around planning. It is about ensuring that we have all the right people around the table and that, given its statutory responsibilities in that regard, local government is at the table. That will help to ensure that there can be a co-ordinated approach to address the issues around infrastructure that you highlighted.

The tax designation sites are very specifically drawn, with clearly defined boundaries. Clearly, overall, green freeport sites are chosen for a number of reasons, against criteria, but place is an important part of that. Those sites in particular parts of Scotland will have comparative advantages, but we are seeking to remove barriers to investment that would perhaps not take place elsewhere but that can take place at those sites if those barriers are removed. Again, on the point about displacement, there is potential investment that would not necessarily take place were the reliefs not in place.

I am not going to try to outthink the SFC on this and say exactly that. The point that I am making is that, if we adduce the evidence that is available—the past revenue from leases as a proportion of overall LBTT, and the assessment in the SFC’s May 2023 “Scotland’s Economic and Fiscal Forecasts” that the relief would fall below the materiality threshold—we find that we are talking about a relatively small amount of money compared to overall LBTT revenue, never mind the whole of devolved and semi-devolved tax revenue. However, that is not to say that the relief does not translate into a meaningful impact on individual transactions that can positively influence commercial and investment decisions.

There is a range of avenues for providing resource. As I said, that can happen under the planning system, when there is justification in planning matters for resources to be accessed as part of a development that is taking place. There are public resources, such as the capital allocations to local government.

As always, we will continue to have dialogue with local government. More broadly, that has been taken to a new and strengthened level across Scotland following the Verity house agreement. Such discussions will continually take place. If particular areas of pressure are identified and we need to consider solutions that go beyond what an individual local authority or group of local authorities was capable of, we would have those discussions at that point, just as local authorities routinely raise a number of areas.

We recognise that what we are seeking with regard to the creation of jobs and the development of land presents a huge opportunity. We also recognise that significant economic development can be attended by a range of challenges, so we will continue to engage. We are not taking an approach of saying, “On you go,” and leaving local government and the areas to it. We will continue to engage, and we will look to understand any challenges that emerge and identify solutions in partnership.

I am grateful for the committee’s scrutiny and have no further comments.

The provisions around avoidance are general avoidance provisions. Laura Parker might want to come in and speak to those, because it is an important point in which the committee will be interested.

As has been touched on, we are in a situation where, subject to the order being passed, we hope that tax site designation would take place between HMT and HMRC in the near future, which would allow for the next stage. We continue to have active dialogue and engagement, and there is joint decision making between Scottish and UK ministers. Laura Duffy, do you want to add to that?

Yes, of course. As I said, there is continued close dialogue and engagement, which will inform any decisions, and earlier we recognised the approach that we have taken from the outset with regard to parity.

LBTT relief sits separate from the other reliefs. The way in which LBTT is constructed as a tax is that it is transactional—it is based on the transaction. Earlier I set out the criteria for when that could be withdrawn—that is, when development does not take place within the control area.

As for the broader points on fair work and monitoring, those must be evidenced through the outline business case and go into the full business case. Laura Duffy might want to add to that.

I will make some broader points in a moment. Laura Duffy can speak about our specific engagement with the UK Government on the design of the prospectus and bids and on money laundering and security issues.