Open the meeting welcome colleagues, and obviously we've got visitors today, who are here to witness what we're doing, so welcome to everybody who's here. There are no apologies being received. Agenda item one is declaration of interest and obviously we welcome Duncan McNeill to the Committee些 and invite Duncan to tell us whether he wants to consider any relevant interest or otherwise. I've're got no interests other than the in م,,26 express my public declaration community. I'm grateful to you, Duncan. Rydych chi'n golyb o Nosim gan Dduncan Yrgrifeswyr yn mynd i gyd pan yr eich ddwyd bob ddifan dda gennym ni i ddysgol i ddwnod i'r ddนif frå yn nhw yn ddoch chi'n ei ddweud sy'n ddych chi yn cynnwys o'r ddynnu.  Fod ti'n dilos i gyd o unrhyw charto, eriffodol o fyctf recrudd drwysigwyr a wedi eu br defnyddu i dna ni i craith brygawr? Bol, mae Fyroddhau tildeydd ond nwy wneud hyn leddod mewn gwirsaidd. yn gweld cais i'r credu dechrau yn perlobiad honno i pelwyr wahanol iamaill i'n broom stiffere fakth am iawn hon oedd hynna yn cael ei hollach hynny fits. Strinwys allan digidenneu i fynd ar gyfer yきたgau们 sympathyod. Rydym yr Allan ni i'n un credu iddo. O bobl hwnnw iawn. I alu i ddim yn detteru i y di forgiveniom d���ym i gynnig i barawsweiaid am gyda'r hyn y rai. Mae'r dyrector o'r Poverty Allianz, Dave Mocksham, gyda'r Deputy General Secretary o'r STUC, Lucy McTernan, gyda'r Deputy Chief Executive of SCVO, Satwa Rehman, dyrector o'r One Parent Family Scotland, Bill Scott, dyrector o'r Polisi Inclusion Scotland i'r Mary Taylor, dyrector o'r Chief Executive in the Scottish Federation of Housing Associations, Stalfon is going off here somewhere, but I hope that it's now stopped. Good morning, everybody. This is quite a big panel we have here today. So I'm going to ask my colleagues MSPs to be as succinct as they can with their questions. And obviously, if we can do the same with our answers that would be helpful. We'll ask probably general questions of the panel. There may be occasions when there's a particular question directed at you. nesbeth. Mae aeth rydd yn gwybod i fod i ddechrau'r hyn oes chi oedd yn oed, ond mae'n gweithio gan gwybod i weithio i gwybod i gyd. Mae ddim gweithredu i'r hyn o'r lleoedd ar gyfer y cyfnodau.  Ond oedd fyddwch yn ddechrau, mae rhai cyfan gael gan gweithgwch yn gweithio eich gweld, ac mae wedi gweld i'n gweithio'n gweithgwch yn gweithio'n sefydlu iaith a gyfan zamaniadau i'r cyfan amfotoedd. yn dibuig ar hyn sy'n dech ! everybody thanks for having us all along to have this discussion this morning the first thing i like to say on behalf of the voluntary sector is that we engaged with the smith on behalf of the voluntary sector on behalf of the voluntary sector Ac yn gweld tot weithio'r cyfractur, mae'n gyntaf o'r cydweithio'r iddyn nhw'n mynd i gweithio'r cyffredin o gybligydd. Mae'n cyfractur o'r cyffredin, nid yw'r cyffredin, ond am edrychwch o gyllid yn gyffredin cydweithio'r cyllid. Oeddwn i'r rŷod i ddifenol, mae'n fyddfa'n Abertaid i'r Pwblik Press a'r gael, Myseidwyd b certaen o r affair, Ach tails in that very intense, very quick way, really quite frustrating, it didn't enable us to engage with the people that we represent and involve in the thorough way that we would like. While everybody did, as I say, engage very thoroughly and with a lot of enthusiast and because it is such an important set of issues, I think that we need, on an on-going basis, to create the space for this kind of discussion about what is appropriate governance for Scotland for Scottish society, for people wherever they are in whichever communities, is a new type of politics that we are seeking. If the general question is about content, it is important that we make that point. In terms of the conclusions that the commission arrived at and the content of the report, the summary would be that we are happy with some elements, not happy with others, where the things that the voluntary sector called for have not been addressed, not even mentioned in some cases, but the key issue around welfare, I think, and I'm sure colleagues here will talk more about this as we progress through the morning, is about the issue of coherence and whether the things that are detailed in the report actually do have the correct dividing line, whether it is possible, given the interconnectedness of the full range of benefits that people can access make sense in a way that can be supported and delivered in practice. There is work yet to be done, which we in the third sector would very much like to be involved in. We don't think that this is just a politician-to-politician or official-to-official type engagement. It's something that we have expertise about how these kinds of issues will affect people in practice and we would like to be involved in it. A third bundle of issues would be about those things where the Smith commission has suggested that further powers should be devolved. I think that we have a key interest in ensuring that where that is appropriate, that that is expedited. A very key example for us in the third sector would be around employability as part of the package of welfare services. We know that the work programme is not delivering for people in Scotland, it's not delivering for people across the rest of the UK either, in our opinion, but we know that the kinds of programmes and projects and activities that the third sector delivers and supports in Scotland really does work, really does help people, the statistics prove it, particularly those that you might call the furthest away from the labour market or have been called the hardest to help. We do help and we do get into productive employment and we would like to see work done as soon as possible to ensure that the resources can be transferred to the kinds of activities that we undertake to make that kind of work happen as quickly as possible. That would be my three main areas. Thank you for the opening, that's quite a broad opening you've provided. Is there no need to add anything new into that? Dave, I think that you wanted to… Yes, specifically I suppose and I suppose apologists are starting with a negative, the biggest concern for the STUC was that the range of powers that might impact the labour market and the quality of work, employment law and other areas weren't included in the proposals for devolution. I won't talk about that for too long because in a sense that's a ship that seems to have sailed, but that was one of our major concerns. I think we did welcome the increase in tax powers, we would have gone further. I think the big question now for what happens next is how the financial framework is written up so that those new tax powers and those new spending powers can be exercised in a way that properly incentivises government action in Scotland and doesn't, in a sense, repeat to pay Paul. I'm happy to go into that in more detail when we discuss the fiscal issues more specifically. Any other questions? Mary? Yes, I'd like to come in here and echo much of what Lucy has said already. I think there are two key areas of concern to us. One is around housing benefit or what has come to be the housing costs element of universal credit. We acknowledged on the day of the Smith commission that this was a step in the right direction, but it fell short of what we had asked for on the grounds of coherence across the welfare system. There are lots of boundaries that will need to be managed. That was one of the first areas of interest. The second area of interest was around fuel poverty. There were moves that I think will be helpful in the long term. Those rely as well on the use of those powers effectively by this Parliament once they're transferred. Given the terrain that we're in, the other thing that I think that the Smith commission was really helpful in shining a light on was the whole area of intergovernmental working, where you have a mixture of devolved and reserved powers, whatever those are. You need, at the political and at the official level, to have effective mechanisms for managing those. I think that Smith rightly identified those issues, and they are coming to light as issues through the stakeholder group. You know I'm trying to manage the follow-on from Smith. Thank you, Mary. We'll obviously get into some more detail as we get through the discussion bill. I think that one of our greatest disappointments was because of the timescale involved. We found an enormous enthusiasm amongst disabled people to be involved in the process. So, as a spillover from the referendum campaign, a lot of disabled people had been energised by that, wanted to take part and decide to determine in their country's future, and that's people from both the yes and no camps, including activists from both camps. When we organised consultation events on the Smith commission, we had to turn people away. Again, the timescale meant that we couldn't organise too many, but the ones that we did organise were over-subscribed massively. It was a very complex area. What powers should come, et cetera, but again, we managed to devise a way in doing that that actually was meaningful and people could understand what the movement of powers between one Parliament and the other might mean. One of the key things that was said by a disabled person to ask was that the powers that the Scottish Parliament should get should be looked at through a human rights lens. Will they enable the Scottish Parliament to enhance the human rights of disabled people in Scotland or not? Unfortunately, all that work took place after we had submitted evidence to the Smith commission rather than before. There's a disconnect between the energy, enthusiasm, et cetera, and feeling that they were taking part and how much they could influence the Smith commission in its deliberations. It's something to bear in mind in future that if we want to see local democratic participation we have to allow the space for that to take place. That's one of the key issues for us. The other one would be around employability. Again, it's the welfare powers and their interaction with employability. Yes, we're going to get the work programme, et cetera, but the sanctions regime, which we think impacts badly on disabled people and discourages them from seeking employment and seeking the support that we need to get into work, is going to remain in place and not be influenced by that. Therefore, the background in which the Scottish Parliament gains those employability powers is going to be affected by certain welfare powers remaining at Westminster so that the work capability assessment benefits sanctions that's happened. We'll get into the detail of that just shortly. Peter, then sack that, please. I think really just to echo some of the points that have been made already, so I'll be brief. I think we have struggled looking at the Smith commission report to see the coherence in the proposals that are in there. I think we also shared and we've stated several times about the difficulty of the process. Similar to Bill, we had a huge response from our membership and beyond to engage in some of the work that we did in the run-up to respond into the Smith commission. We really need to think seriously about how we maintain that momentum and how we try to engage with people as we go forward into the next stages. I think that that's already going to be difficult but I think that it's something that we need to turn our minds to. Where we've been a bit more positive is around some of the proposals, for example, to provide the power to create new benefits. That's useful and interesting. I think that that should allow some scope for the Scottish Parliament, Scottish Government to take new actions to address problems specific to Scotland. I think that that's something that we were keen in our evidence to the Smith commission to see take place. I think that it goes back to Dave's point. Do we have the fiscal responsibility to enable us to use those powers? That would be a key issue for us that seems to be hanging in the air. I'm going to echo much of what my colleagues have said. We too had engaged quite effectively and widely with single parents in the lead-up and during the referendum process and they've shown that energy to continue to be involved and particularly around the issues that are affecting them. In terms of welfare benefits, the work programme and job centre plus is one of the areas where they've expressed the most disappointment when we've gone back to them with what's come out of Smith. The fact that, although we are going to have the work programme devolved, the policy framework is going to remain reserved and the regime of conditionality and sanctions, which is having such a negative impact on the families that we work with, is going to remain in place. In terms of whether we were content with what came out of it, I think that when we looked back at the tests where we were going to apply to it around what was being proposed, alleviate or reduce poverty and support to children and families, particularly single-parent families in that situation, would it avoid or address some of the cliff edges that exist currently between the two regimes and would it address inconsistencies in the system? I think that there's a number of areas that colleagues have spoken about where what's been proposed, what we have, fall short of that. The one in particular, which was not mentioned at all in Smith, even though we had a session specifically looking at it with Lord Smith, was childcare. For us, childcare is one of the most stark examples, in a way, of what happens when you have supply and demand funding, in a way, being across two parliaments. We were very disappointed to say that there was no mention of childcare and also nothing to look at how childcare could be addressed through the greater powers that have been given to Scotland. I thank you to all the witnesses. I will now get into much more of an exchange process. Duncan? I don't know. I don't know. Hopefully, I can meet that challenge. Good morning to the panel. When I read the written submissions, I found it very interesting that there was this balance of what was missing. I also thought that, when I read the submissions, there was a determination and willingness to participate to make them better. Indeed, some of the submissions spoke about significant progress from the Smith commission, and there was a lot of positivity in that. I wonder if witnesses can focus on what they believe that progress was and reflect on some of the submissions and where those opportunities to make progress are. I think that Peter mentioned some of that with the right to make new benefits. The other one was, of course, the fiscal issue that Dave had mentioned. There is not agreement there. Some people are for full fiscal autonomy and some are not. Some are for devolution of some of the taxes and some are not. I think that that might be helpful if we can speak to some of the positions on that for balance in the committee. Dave, do you want to kick off? On that financial issue, we reflected a little bit when we did our submission on the situation in Northern Ireland. There is quite a significant devolution of a range of policy powers, welfare and the like, but clearly a problem, as we currently see in terms of the discussions going on in Northern Ireland just now, about the funding of that. It seems to us that there has to be a coherence between the amount of money that the Scottish Government spends and how that is reflected, both in respect of the number of taxes it can levy, but also with respect to how the block grant is calculated on that basis, because you can have a whole number of negative incentives within a system where you simply get a block grant that is static. I will give you one quick example. The future jobs fund, which was introduced some four or five years ago by Alice de Darling, was essentially half funded by fiscal stimulus and half funded by savings that the DWP managed to make, because obviously people were not being paid housing benefit, job sequence allowance and other things. Under the current circumstances, where John Sweeney, to look at doing the same thing, he wouldn't derive any of those benefits, they would essentially be recaptured by the DWP. So, it's only useful to have this additional devolution of powers if you have a suitably flexible and negotiated fiscal framework, which allows some of those spending decisions in Scotland to derive benefit in Scotland. So, we're looking very closely at how that financial memoranda and how that fiscal arrangement will be negotiated in the next three or four months. That's a great helpful example. Peter, do you want to build on the stuff that you said about benefits? In terms of looking at the positives from Smith, I've already mentioned the powers to create new benefits. I think that Dave has very succinctly put the point about how that's paid for and how that can be, if you like, consentivised. We were also happy about devolution of cold weather payments, funeral payments, sure-start maternity grants and so on. Those things can make a real difference if we use them creatively. All of that comes down to at some point political will to use those new powers in ways that reflect the concerns that the whole panel would share. I don't want to go into what are some of the negatives. In terms of things that weren't devolved, that we were happy they weren't devolved, we've mentioned corporation tax. That's an area where we were happy that we don't have new powers and that there needs to be some division of responsibilities, appropriate division of responsibilities between the UK and Scotland. Those would be some key points at this stage. Picking up on the points about what was in the report that was welcome, there was a very wide range of issues raised by the voluntary sector, as you would expect, from such a diverse sector and such a wide range of key interests. For example, the proposed evolution of the Crown Estate was exceptionally welcome to many rural community organisations and to environmental organisations. Some aspects of energy policy were also very much welcomed. Consumer protection, in the interests of citizens' rights, was also welcomed as being proposed to be devolved. I've already said that the aspects of employability, given the complications that we've just discussed, were also very welcome, because we believe that we can design a system that supports unemployed people and is much more tailored to their personal circumstances in a population of 5 million, far better than we can in a population of 50 million. In terms of equality, that was a very big area of concern for many in the voluntary sector. There was a wide range of calls for this Parliament to have more control over equality law. While Smith concluded that equality law shouldn't be devolved, the slightly enigmatic phrase that the Scottish Parliament can legislate in relation to socio-economic rights and devolved areas has left us all rather intrigued as to what might be possible. After all, we only want the powers in order to promote the interests of the communities and individuals that we serve and to pursue the human rights agenda that Bill was referring to earlier. It may be that there is more scope in that phrase than perhaps first met the eye. Duncan mentioned the word progress. Mary, I don't know—I think that you're on the implementation group who have got that right. Can you give us a flavour of what progress might be going on, how the nuts and bolts are actually progressing? It would be helpful, because that's one of the attempts at Duncan's question. I'm happy to do that if it's subject to clarifying that what you called the implementation group is the stakeholder group under the Scotland office. Yes, it's fine just to make sure that we're talking about the same thing. I've given it too much importance probably in that sense. I think that we're not quite at that stage yet, I wish. I think that at the risk of being an anorak I would refer to paragraphs 44 and 45 of the Smith agreement. 44 specifically talks about administrative powers and paragraph 19 makes a very clear distinction at the start between administrative power and legislative power, which we thought was quite helpful. What's interesting to me is whether the administrative powers that are identified in paragraph 45 of the Smith agreement actually give quite a lot of flexibility in the short term, potentially, to the Scottish Government to be able to introduce changes in the way that the housing costs element of universal credit is administered. I say potentially because we're still trying to clarify, not least through the stakeholder group and through back channels, what exactly the form of the transfer of powers in that area needs to look like and the position is not clear at all. I think our submission identified that we were still trying to clarify that and that remains the case today. The other issue is around paragraph 45, where we were told quite clearly on at the most recent stakeholder group that it would require legislative power to be able to move forward with power to vary, for example, the under occupancy charge of what's probably more commonly known in these circles as the bedroom tax. That will rely on legislation and there's nobody banking on legislation any time before next autumn, this autumn, sorry. It was just a very brief point. We obviously welcome the transfer of disability benefits to the Scottish Parliament. That was one of the key calls by disabled people. The problem being, on the fiscal side, that the Scottish Parliament then needs to have sufficient scope to raise funds to make a more supportive system work in the future. Otherwise, you've got powers, but you can't really do very much with the benefits that you've got. Stuart, I think that you were interested in the area of balance in that area in terms of some of the stuff that Mary began to touch on. I felt that there was a kind of underlying thread that ran through all the written evidence that I read. I suppose that it's this interesting issue about administrative powers and what I might call real powers. I don't really mean that in that sense, but I think that you understand what I mean by legislative powers. I think that it was summed up very well in the SCVO submission in the conclusion where it says, and I'll just quote from it, that these powers cannot merely be administrative to create solutions that work for Scotland. We must be able to design not just deliver. This has to be a genuine transfer of responsibility. I just want that we can maybe tease apart this notion of or how you feel about the Smith package in relation to legislative powers, powers that can change things and administrative powers that might be able to change things at the margins, but effectively you're just administering a system where the policy decisions and legislative decisions lie in Westminster. I just want that that seemed to me an issue that seemed to be underlying a lot of the submissions that we had today. Mary, could you start? Yes, I'm happy to kick this off. We started off, we have consistently as an organisation thought that housing benefit should have been devolved at the time when the Parliament was set up so that the powers to support tenants to live in any kind of housing in the form of housing benefit should have been devolved, but more recently, in taking advice about the way that social security was going and the formation of universal credit, we had arrived at the position where the whole of social security needed to be devolved in its entirety. I've had some conversations with some of you around this table about some of the details behind that, because some parties were calling for elements, including housing benefit, to be devolved on their own. The problem, and I think inclusion Scotland has a very clear understanding of that from a very specific grassroots perspective, particularly in relation to disabled people, where some of the trickiest issues arise, is that if you devolve any part of the benefit system, you still have to manage the boundary, whether they're inside universal credit or outside universal credit. We take the view in the SFHA that the Smith commission has given us a certain array of powers, and we will work with whatever those powers are. The administrative ones are actually quite helpful in the short term, as long as they don't end us up—and I hate to refer to Northern Ireland again—but as long as they don't end us up in the same position as Northern Ireland is in, of having devolved powers nominally but not being able to do anything with them, because, as Dave has already referred to, the fiscal consequences of that. I am assured verbally that that's not what we're looking at. I specifically asked this question at the stakeholder group the other day, and I was assured that that was not the case, but I have seen nothing in writing, and until I have seen something in writing, I remain to be convinced. Yes, and thank you for remarking on it. What's right behind this, if you peel it right back, is back to my very initial point this morning, which is about how you do governance and how you involve people. We're very intrigued in SCVO and other colleagues in the sector by the growing emphasis on co-production involving people in the design of policies that affect them, not just involving them at the sharp end of implementation. We hear ministers and others academics talking now about the Scottish model, which stems from Christie, which is about prevention, enabling people to stay well and out of harm's way and in work, rather than dealing with them once they've got to the acute part of that cycle. What we were interested in particularly was having the powers over design of a welfare system that supported people in that preventative upstream way. We think that we've got a lot of experience across the third sector in doing things with people and for people differently from the way that the current top-down benefits system operates. It's an ambitious vision that we have for a system that supports people, communities and families very differently from the way that it's been conventionally done in the UK. That obviously requires this Parliament to have the powers to create an enabling environment for the kind of discussion that involves people like my colleagues here today, but right through to communities and individuals themselves on a routine basis. That's why design is important. I absolutely agree with Mary that there is a lot in what Smith does propose, and even in the administrative aspects of it, that we can do better. If you want to get fundamental, you need to have the design powers as well. I'm sure that you've got any supplementary to that. I'm sure that it's supplementary, and it's a different area, but it's the same point effectively. Is there any comment on the issue of assigned revenues? It seems to me that effectively, the VAT example of 10 per cent of VAT being assigned, if you take something off the block grant and replace it with assigned revenues from VAT, it looks like a power that's transferred, but are we just administering a different bit of the system or not? There's no power to change anything there. I'm not sure that many people agree with me on this, but I'm actually quite a fan of assigned revenue. I fully take your point that it's not a power in the sense of being usable to promote particular behaviours, but almost to return to my point of how do you see the reflection of good Scottish policy in terms of its block grant, then clearly a degree of assigned revenue rewards the Scottish Government for economic growth. It rewards it for economic growth, and essentially, in our view, the closer you get to an amount of revenue which is derived from positive actions undertaken by the Scottish Government, the better. I take your point about it not being a lever, but I still think that it's useful that we move towards a situation where a larger proportion of Scottish revenue is derived from positive Scottish Government economic activity. You do accept the point that effectively we can't make any changes to VAT whatsoever, so effectively we're going to go that way. Indeed. One example would be the building trade where we have campaigned for many years on reduced VAT, for example on repairs, etc. But we can't do any of that. No, and I do believe that there's categories of activity that were actually discussed at our stakeholder group, where essentially through grant mechanisms you can effectively find ways of providing VAT advantages for people, for particular activities. But I take your point that it's not a lever in the sense, and Europe wouldn't allow it in many ways to be a lever anyway, but I still return to my point that it is useful as a reflection of how we will give Scottish Government activity to have a degree of sign taxation. Lewis has indicated that he wants to ask a supplementary round the housing issue, and then I'm going to go to Alison Johnstone for the last question in the general area, and then I'll move more into the welfare arena. I was really following up on Mary Taylor's submission and the points that were made in that regarding implementation. I think that we've touched on some of that already, but I wonder if there's more that can be said about how to implement the elements relating to housing that have been included in the Smith agreement, and also around the fuel poverty link, because I think the point that was made in the written submission is that for those people dealing closely with the housing sector, that are obvious read across from one area of policy or implementation to another, and how that would be articulated. Clearly you're giving advice to Government on that. I think that we need to be mindful of the distinction between housing benefit, as it is at the moment, and the housing costs element of universal credit. You'll be aware that we have called, along with others, some of whom are on the side of the table, for the suspension of roll-out of universal credit in the short term, pending clarity around what the additional powers look like, what form they come in, and when they can be introduced. We have had a reasonably constructive dialogue this week with the DWP, and that's not come to an end yet. None of what Smith talks about relates to housing benefit as it sits at the moment. For everybody that's on housing benefit, be they of working age or pensionable age, the existing housing benefit system continues to exist until they have been subjected to the roll-out of universal credit. The niceties around administration are about making sure that we have a safe transition of powers for the housing cost element of universal credit, because in the meantime the housing benefit side of things is working okay, bedroom tax aside. On the fuel poverty issues, I think what we were saying in our response to Smith was that the transfer of powers around warm home discounts and eco obligations was really, really welcome, because we have been bedeviled in recent years by constant changes in the arrangements for those which took very little account of Scottish climate or Scottish market conditions, so that's very much welcome. I think one of the issues around, to go back to the very earliest point around cohesion, is that the fuel poverty stuff is scattered in different places, and I think it's really incumbent on a committee such as this to make sure that it keeps an eye on some of the themes. I would invite you to make sure that fuel poverty is one of the themes that you keep an eye on for all the reasons that Lucy has already referred to, because they could very easily get lost in the welter of bigger discussions about fiscal arrangements and so on. It's part of what I was after, convener, in relation to when a bill comes forward containing implementation of these proposals, clearly then, at that point, this committee will need to be well advised in terms of precisely recognising those connections. Okay, now Alison, I think you wanted to ask a question about fuel poverty at some stage, and Mary just introduced that area, and we're now moving into welfare as a natural progress before I intended to be. Do you want to deal with that question now? We'll come back to your more general question later, and then I'll go to Mark. Sure. Mary, in the SFHA submission, you say that we need effective powers in order to ensure the equitable pricing of energy supply across Scotland wherever the customer lives. That isn't explicitly in Smith, and I wonder if you feel that it should have been, and what we might do to take that discussion forward. Obviously, there are things around ECO that I very much welcome, and it's great that we're going to have an opportunity to tailor fuel poverty to better suit the conditions that we face in Scotland, but regarding the equitability of energy pricing across the country, what would you like to see happen now? I'm going to struggle to find it right this very second, but I might come back to you on the detail of which paragraph it's in. I think this relates to the point that I was just making about the scattered nature or the dispersal of reference to discussions about fuel poverty. I think it's quite clear that the Scottish Parliament itself will have powers around what I would put under the banner of intergovernmental working to hold to account off-gem in its relation to its powers on pricing. I would encourage the Parliament to make sure that those are framed in such a way as to allow it to exercise those powers effectively. My question straddles the line in general, but moving into perhaps the welfare discussion. After you'll come to Rob then, because Rob will have a general question at welfare as well. There's a lot of talk in all of the submissions around the issues of in-work poverty and incomes. Obviously, one of the means with which to boost incomes is obviously to pay people more. There's a lot of talk in the submissions about a desire to see, for example, a living wage or also to see devolution of minimum wage. I wonder what the view of the panel is around the absence of some of those powers. Obviously, if one of the ways in which you reduce welfare spend is to reduce reliance on in-work benefit and paying people a better wage is a perfect method by which to do that, I don't know who wants to kick off. David, you want to kick off, then I'll come to Peter Kelly. For instance to that, so you'll probably not be surprised to hear what I say. I mean the first thing to say is the trade union movement in Scotland looked very, very closely and not with an uncritical eye at the potential for the devolution of employment law, minimum wages, health and safety, a range of things that we categorise as workplace protections, which in our view fit your prescription for improving the quality of work wages and reducing the benefits bill. And we were aware of many of the historical arguments that maintaining a single market across the UK has clear advantages. But in the end, we looked at the fact that the Scottish Government already exercises a large degree of economic powers, economic development powers. It has the justice system, which obviously interacts very clearly with the workplace. And when we looked at it in the round, we took the view that those form of workplace protections, including the setting of minimum wages, fitted better with devolution and therefore took that clear view. And it's therefore a clear miss for us that it's not there. If I could just migrate slightly on to the issue of living wages, which is also obviously something slightly different because it's not a mandatory prescription, it's a voluntary or partially voluntary approach. We take the view that, you'll know that the Scottish Government and most local authorities are now living wage employers. When the Scottish Government did its analysis of the impact of paying the living wage to all of its employees, it found that around 50% of the benefit of doing that, this is back to my previous point, was effectively derived by the DWP, because essentially it was people who were on some form of means-tested support and it came back to them. This is where I move back to my idea of the flexible financial arrangements. Is it really right that the Scottish Government taking a conscious decision to directly pay the living wage to its employees should not derive the full benefit of that budgetary decision? So even though we're disappointed, even though we're disappointed at the lack of core employment powers being devolved, we still think that there's imaginative ways that we could look at incentivising what we would consider to be good behaviours around pay and unquality of work. Already said, we had also called for the devolution of national minimum wage and it goes back to that point that we were making at the start about coherence. We think that there was a bit of coherence in the submission that we made to Smith. It's about with a range of employability powers that we had hoped would have come and with a range of social security powers that we would have hoped would have come, then it would be natural to have the national minimum wage as part of that overall package to support people as they make a transition from out-of-work to in-work. So, yeah, we're disappointed with the lack of devolution of national minimum wage. There is still much that we can do and I think much to the Scottish Government and a range of organisations around the table and outside Parliament are doing to promote a living wage, but I think fundamentally to bring the legal mechanism to set the floor to wages would have been very helpful, I think, in linking the economic development ambitions of the Scottish Government and the Scottish Parliament. I think that Dave makes an interesting point around the coherence element again and also who it is that derives financial benefit. Obviously, the individual derives benefit because they're moving into a situation where they're relying on a secure pay rather than having to rely on on top-up benefit. I wonder if, Satwak, because I noticed in your submission when you talk about key policy issues affecting single parents in Scotland, two of those are financial security in and out of employment and also in-work poverty and low pay high turnover economy. It strikes me that the kind of asks that Dave Moxham is looking for are very much in tandem with what your organisation would be calling for as well. Absolutely, very much, and as we say in our submission, we were disappointed that employment remained reserved, particularly the national minimum wage. We had called for in our submission to Smith for that to be devolved and for hopefully the minimum wage to be set in line with the living wage. One of the big issues for the families we work with is that we've got a welfare and benefits system that's got a work-first agenda, but for many of the families that we work for, work doesn't pay. We find that single parents enter work at the same rate, relatively speaking, as the rest of the population, but they tend to leave work much more quickly because of the additional costs of working and the stresses of working and the fact that they end up in situations or finding themselves in quite severe in-work poverty. That's why we felt similar to what Peter has said, that if you're looking at a model of progression from being out of work to being into work, we would see a wage that provides a decent standard of living as being a key cornerstone of that, so we would have seen it as part of that coherent package of support through employability into work and then to retain work and to progress further into work, so that's why we'd called for it. Duncan, come on to select supplementary and then I'll come to you. It's a quick supplementary and just to explore this, I noted that Dave and understand why the trade unions would have that tension here about coming to that decision, given that we have approached the regional levels of minimum wages in the past. More interestingly, I think that it would be a leap of faith that we'd expect those minimum wages to go up, and I want to contrast that with, I think, poverty aligns position and STC's position, where they have said they were against the devolution of co-operation tax because that could be a race to the bottom. Why are we confident that setting a minimum wage here in Scotland wouldn't be a race to the bottom? The evidence seems slightly clearer to start with on co-operation tax because the Scottish Government has said that it wanted to reduce it, so that was, I suppose, a fairly easy judgment to make. Our main view was number one. Scotland, as a functioning economy compared to the rest of the UK, is around average in terms of its levels of employment, in terms of its output, in terms of its productivity. Therefore, the idea that Scotland would, if you like, attempt to seek inward investment through some trickle-down mechanism of lowering wages seemed to us to be economically unlikely. It seemed to us that the whole flavour of the referendum campaign, the nature of the two biggest political parties in Scotland, did not lend us to the view that Scotland would be likely to wish to reduce its minimum wage compared to the majority parties across the UK. For a range of reasons, we didn't think it likely in the short to medium term. We also reflected on the fact that Northern Ireland currently has that power and there's been no race to the bottom, even though Northern Irish productivity and economic output would, from one economic stand point not mine, make it some sort of candidate for that kind of competitive activity. We felt, and as I reflected, it was a judgment that we undertook very carefully. We didn't see the prospect in the short to medium term of a race to the bottom. In fact, we saw some prospect of a race to the top. I'll come to you then, Bill, and then we'll come back to the more general issues on welfare with Robbie. I think that with any of the new powers that could have come to Scotland and that are coming, there's an inherent danger that around welfare benefits you could make the very same argument that potentially they could be levelled down. I think that, as Dave's expressed, we've made a judgment that, on some things, that's less likely to happen. We want to see those things increased. I think that around the minimum wage it was an interesting call. I think that it was important that the trade unions took the position that they did. Again, it goes back to policy coherence. When the minimum wage was introduced, there was a very strong case when this was the first national minimum wage that we had in 1999 when it was first introduced. Before that, we didn't have anything pre-99, but up until 1993 we had the wages council system, which was that patchwork. When campaigners who had campaigned for the minimum wage wanted to see that unified system across the UK, we've moved on from there. In terms of the powers of the Scottish Parliament and the opportunities that were around, we wanted to see that coherence again around how we set the conditions to address poverty, to promote social justice in Scotland. The minimum wage would have been one way to do that. It's not just about the level of the minimum wage, but the enforcement, which is a key issue. We would like to see a progressive increase in the minimum wage, but we need to do more around the enforcement, and that's an issue that's been withered on the vine for many years. Again, those powers would have allowed us—again, it's about political will. We would have to assume that there's political will to enact and to use those powers in the way that many of us around this table would want. Bill? We were very careful to warn all the disabled people that came to our engagement events that simply the transfer of powers wouldn't change anything. It wouldn't change anything for the better, it wouldn't change anything for the worse, because those powers would then have to be used in one way or another, and they could be used to effect our lives in the negative rather than for the good. Nevertheless, the overwhelming message that we got back from 80 to 90 per cent of people was that we want equality's law and employment law because, if employability is going to be addressed, those are key policy areas that affect employability of disabled people. Less than half of disabled people are in work. Those who are in work—a majority are in entry-level jobs—depend on the minimum wage being set at a level that removes them from poverty, otherwise they're just exchanging out-of-work poverty for in-work poverty. That's why they sought, as a coherent thing, to bring all of it up here so that they could effect employability over the longer term and address the particular issues that single parents and disabled people face in the current labour market. I'd like to turn to universal credit, not the principle but the practice of what might happen. We were provided in this committee by the Parliament Information Centre with a note that says, if a universal credit claimant is receiving any of the reserved benefits below, they have been increased by the Scottish Parliament, then they will get a reduction in their universal credit award pound for pound. That could mean that a universal credit recipient is worse off. However, that could eventually be offset if the Scottish Parliament decided to increase the universal credit award as well. A similar situation might arise if the Scottish Parliament introduced a new benefit. In that case, there would be a need to be a discussion between the two Governments about how the new benefit would interact with universal credit. Would you agree that that would undermine the Scottish Parliament's ability to improve outcomes for individuals by topping up reserved benefits? I'm happy to click off on that. I've not seen any such note. I'm not entirely surprised that it exists. I'd be very happy to have a look at it if you were able to share it with us. I think that on the basis of what you've read out and your conclusion on the basis of what you've read out, that's a fair comment. I think that goes back to what I was saying about Northern Ireland. That piece of evidence is on our website. I'm not suggesting that you should have necessarily seen it. However, as a result of the very first discussion that we had with Alasdor Cymru, that issue was raised if we wrote to Alasdor Cymru to confirm whether or not the position of spice was accurate. Unfortunately, we had not yet had the response to see whether that position of spice was agreed to by either the Scottish Government or the UK Government. You might be a wee bit in the dark here, but if there's anybody who wants to raise, deal with it. Please feel free. I apologise if I'm misunderstanding in which case you'll stop me quickly. If referring to 0.55 in the Smith commission report, which is any new benefits or discretionary payments introduced by the Scottish Parliament must provide additional income for a recipient and not result in an automatic offset in reduction, then you can interpret that two ways. I did raise this at the meeting that Mary and I were at the stakeholder meeting. You can interpret that as you can't introduce anything which might result in that situation, or you can say anything that you introduce must not have that effect. Now, it was my impression, and Mary will say whether it's right or wrong from our meeting on Monday, that it was the latter rather than the former, which is to say that those benefits, top-up benefits, could be introduced, and the rule was it should not affect somebody's universal closet. Now, how that is written, whether that's in draft clauses or whether that's in financial memoranda, which should involve both Governments including the DWP, I think is still to be investigated, but I very much hope that it's the latter interpretation and not the former. Otherwise, we'll have moved no further forward so anywhere else on that? Very much on that. A carers allowance, for example, is one of those benefits where if it's increased, it results in a pound-for-pound reduction in income support at the moment and similarly would do with universal credit. If the Scottish Parliament decided to increase carers allowance by £10, as it stands just now, that would result in £10 less being paid in universal credit. So, there has to be some arrangement whereby any increase by the Scottish Parliament is matched by a disregard by the UK Parliament. Whereas Smith says that this is what must be achieved, it doesn't say how it's to be achieved. To give you an idea where the other benefits although disability allowance is not taken into account in terms of a reduction being made to universal credit, it does result in disregards and premiums in universal credit and income support. So, if the UK Government has a benefit ceiling that implements and that's an overall benefit ceiling of the amount that they spend on benefits and an individual benefit ceiling and the Scottish Parliament again acts to increase those benefits or increase the number of people receiving those benefits, that will have an effect on the UK Exchequer in terms of the amount of benefits that it has to pay out in income sport. Because if you are more generous and award more people personal independence payment in Scotland than is generally the case in England, that will result in a higher bill for the UK Exchequer in universal credit because it will have to pay premiums and it will have to disregard that money. So, the savings that it thinks it's going to achieve in certain areas of welfare reform, it will not achieve if the Scottish Parliament acts differently. Again, I don't think that Smith goes into that at all about the interaction. This is why it was so important to bring Social Security as a block to Scotland rather than piecemeal because the interaction between non-means-tested benefits and means-tested benefits is much more complex than Smith envisages. Fascinating area, you've opened up there and it certainly says to me, the committee agreed last week that we needed at some stage to bring on some sort of benefits experts to help us when the clauses come. But it would be useful, I think, if you could explain a bit more of that in detail and writing to us so we can get a time to absorb it and understand it. Rob, you want to build on that? I echo that the convener is saying that Alistair Carmichael was unclear and unable to articulate this. You would agree, of course, that we need to deal with any other complications that could be envisaged in this and that we need clarity on this matter going forward on an early stage. I would only add at this point that this was a live topic at the stakeholder group earlier this week and in the sense of the issues being aired, I don't think that we were seeing any solutions being proposed or clarified, but it is a live topic for discussion. I think that there is another area in which it may be of interest to the committee to know that we were assured that, where the Scottish—I can't remember whether it was the Government or the Parliament—took decisions that would benefit, that actually created savings for the UK Government, which is the opposite of the situation that Bill identified, that those savings would accrue to the Scottish Parliament or Government whichever in the first place. I specified housing as an example just to test whether that would work. For example, if the Scottish Parliament were to agree a greater budget for housing investment, particularly in social housing by housing associations, and at enhanced rates of subsidy, that would produce more housing at lower rents than would otherwise be the case. Those tenants who were then potentially living in expensive private rented accommodation on expensive local housing allowances would then move over to a cheaper housing cost elements of universal credit or housing benefit, and that would create a saving to the UK Exchequer. I was assured by the Treasury that the saving would then accrue to the Scottish Parliament. I commend to you the enhanced investment in housing. That is very complex, obviously, and slightly concerning, because we are only a week away from seeing the actual clauses, and yet we haven't bottomed out some of this yet, obviously, in terms of the final positioning. I hope that by the time we get to next Thursday, and the clauses are published that a lot of this is able to be bottomed out, but any further written evidence that people want to provide us in that area will be very useful. Rob, do you get any further supplementaries on this subject? Is it still welfare? It is, yes. After Rob's deal with the welfare, unless there's any else got welfare issues, I'm going to go to Alec Johnston on taxation issues. We're talking about housing at the moment, and I think the question about sanctions and so on have a particular bearing in this. Last year, the SFHA published a report that set out how benefits sanctions are compounding the impact of welfare reform in two important areas, directly where sanctioned tenants are falling into arrears as a result of seeing their housing benefit claims suspended, and secondly, indirectly where sanctions are leaving tenants' destitute with no money for rent, fuel or food. What's your view on the impact that the UK-wide sanction system would have on the ability of your member's tenants to pay their rent? Well, the situation is as it was as we reported last year, only my guess would be if we were to update the figures, we would find that more tenants have been sanctioned since that time, and with all the consequences that we identified in that report at that time. This underpins some of our concerns around universal credit at the moment and the way in which that's being rolled out, and hence the subject of active dialogue with the DWP. So I take it that you're saying that you think that perhaps the control of the sanction system should be devolved to the Scottish Parliament? Well, if our original position to Smith was that the whole of Social Security should be devolved, and so we said that the housing element of it was a step in the right direction, sanctions is clearly not a step in the right direction. I'm sure Bill will want to have more to say on this. Thank you. We found increasingly that the single-parent families that we're working with are being subjected to sanctions, and what we found is that there tend to be two trends as a result of, well, with the sanctions. One is that they're being misapplied so that the actual advisers within the job centres themselves are not aware of the flexibilities that there are currently that they can apply to single parents around childcare, hours they should be looking for work, et cetera. Secondly, it's not that they're not unaware, they are aware, they're still applying them, and what we're finding is increasing numbers of cases that we're taking to appeal are being overturned on appeal, but you still have the situation where these families are having to live with very little or no income for the period that they're being sanctioned and are having to rely upon food banks and other charitable sources to be able to survive. That was one of the reasons why we ourselves had also called for social security to be devolved alongside the work programme and Job Centre Plus, so we could create a system which wasn't reliant on such draconian conditionality and sanctions. Thank you for that. I think that Stuart has wanted to deal with in welfare, Alex, and then we'll come to you on that next issue. Thank you. It's more on poverty as compared to welfare as a whole, if that's okay. All right, thank you, convener. The question is mainly aimed towards Peter, Satratt and Mary. In Paragra, in the Smith report, section 73 and 74, highlight the issues of the proliferation of payday loan shops and the proliferation of Thickstodd's betting terminals. These are two areas where I've been involved in and campaigning on for some time now. In terms of the Smith recommend also for the powers for these to come to the Scottish Parliament, I'm not aware of any of yourselves actually mentioning these within the submissions, and I accept that it might be considered to be on the margins of the bigger issues that we have been discussing. Nonetheless, there will be an impact on the people and organisations that you deal with. Do you welcome the powers to come to the Scottish Parliament? Secondly, do you think that there will be an opportunity for the Parliament to deal with the powers effectively and for the people that you work with and represent for them to have a better outcome? Peter, do you want to pick up that from the Poverty Alliance perspective first? I think that we would welcome those powers. In a lot of the work that we've done with community representatives over many years, a consistent theme that people will talk about is the only shops or the only occupied premises that they'll have in some communities are pubs, bookies and chip shops. That's something that's come out over many years. I think that powers to regulate in those areas, particularly the fixed-odds betting machines, would be useful. Again, it's about how we use those powers because local authorities obviously have powers around licensing of betting shops. We need to think about how those things can be used. That's a power that's useful, but we then need to look quite seriously at the wider implications of that power and how it's used, particularly devolved down to the local level. A disabled person is three times as likely to have a payday loan, even though they might not be an employment than a non-disabled person. The proliferation is something that needs to be addressed, but obviously the proliferation is there because of the grinding poverty that many of our citizens experience, and that has to be addressed as well. The point that I was going to make about sanctions was, in the work-related activity group of employment and support allowance, a disabled person is four times as likely to be sanctioned as to be found a job. That suggests to me that you've got a programme that isn't about work at all, but it's about punishing people for not being in work. My colleague said that payday loans of very high-interest loan companies are one of the areas of concern that come to us. More and more families that we work with are in higher levels of debt, and they're in spiralling debt as a result of being in poverty. On top of that, when they're sanctioned, they're having to find a way of getting money and having to resort to the high-interest lending. Is there anything that we could do to be able to regulate that, but at the same time, to look at what the alternatives are and to support families to be able to find the alternatives to sources of income when they need them? I'll go to Alex Johnston. That's probably the right thing to do at this stage. Thanks very much. Looking through the papers, there are a number of proposals for devolution of tax powers. Of course, there are proposals within the question itself. We'll be honest with each other. I presume that you don't want these taxes devolved so that we can cut them. We've talked about what we could spend that money on, but of course the trend in recent years has been for the proportion of GDP taken in tax to be reducing in the UK. I presume that you would wish to reverse that trend using these powers in Scotland. What do you see as the limit to the expansion of the Government take in terms of the proportion of GDP in Scotland? You're looking at me as the man most likely to work at high taxes. You're spot on. I think there's fairly specific and fairly clear limits to which the amount of tax levied in one part of a highly integrated economy will be different from the other. I think putting an exact figure on that is different, but if you're saying that overall UK tax takers, I don't know the common figure, 38, 39 per cent, would Scotland be likely to jump to 47, 48 per cent? Clearly not. That wouldn't happen. I slightly disagree with you about tax rises and falls, because one of the points about devolving enough of a basket of taxes is that it doesn't power the Scottish Government potentially to vary those taxes within that basket. For instance, that I'm not necessarily advocating it, you could make adjustments to income tax if you were looking to introduce a land value tax. I'll just give that as an example. It is potentially about adjusting taxes up and down if you have a sufficient basket and enough taxes in order to operate an effective system. I would not envisage, beyond certain things that we've heard about potentially retaining a 50p tax rate in Scotland, enormous discrepancies between overall tax take in Scotland and the rest of the UK, because I think there's a number of practical reasons why that wouldn't take place. There's a possibility to do a number of limited specific good things and to convince the people of Scotland that that's a good idea. I don't personally believe the argument over higher taxes has necessarily been won just because I advocate it, but the STUC would definitely recognise the limits to such divergence. Lucy? I think it's probably fair to say that there is a very live debate amongst the organisations that my organisation represents and works with about the role of taxation, not just in terms of overall higher or lower levels, but how it's distributed. I think that that kind of debate, not just more or less, but how we use the taxation system in a designed and creative way to bring about a different balance of resources across individuals, families and communities is the one that we would like to engage in more. If you want to redistribute through taxation, you need to tax more and spend more. I wouldn't say that that was the case at all. I think it's about how you think about the taxation system and it's also about how you think about the economy in the round. The main thing that we've been calling for in recent months is for a broader debate about the type of economy that we want, which looks at things beyond just pure GDP, but about what's important to individuals, families and communities. That could be forms of measures of wellbeing and human need, not just about cash. I think that a broader debate about the economy is one that we would like to engage with. There are some specific points as well that we did raise in our submission to Smith around the role of charity and the taxation system. We have a very clumsy and clunky engagement between charities as particular entities and the tax system at the moment. It could be designed to work with civil society organisations in a much more creative way that supports people by the organisations that support them rather than directly. We would like to see that debate opened up a bit more as well. Alex, any more? Sorry, it was actually on that you have to raise taxes to raise more revenue, you don't. You could, for example, raise more revenue by getting more people into employment. You could raise more revenue through increasing the amount of childcare that's available to parents and therefore encouraging more parents to be in full-time work rather than part-time work or not in work at all. There are other ways to generate revenue rather than just raising taxes. In our own case, we were very keen to see access to work devolved to Scotland because, for every pound that the DWP spends on access to work, the Treasury gets back £1.60 in revenue. That's the sort of tax raising that you could go about without necessarily raising the level of the tax, but you get more of a tax take, and it's the interaction of different policy areas with taxation that you're then talking about. I'd be horrified to realise just how close to my way I think he is for that sort of thing. Are we not perhaps mismatched here in that we've spent an hour and 15 minutes talking about what we want to spend in Scotland after further devolution? We still seem to be avoiding the implications about the fact that that money has to be raised somehow. With current projections suggesting that the tax-taking GDP for the UK as a whole is on its way down to about 35 per cent, that even staying where we are is going to create a divergence and that that divergence could be quite notable. I take the general point, although anyone who's read the Institute of Fiscal Studies analysis of that fall to 35 per cent would only draw the conclusion that they stopped briefly from splitting their sides, laughing at the Chancellor's projections before trying to write their analysis of that. I take your point that that's the intended area of UK Government spending. I don't think it's going to happen because I think some of the very, very basic infrastructure of the whole of the UK would fall apart if those plans were actually implemented. I do take your point that we are in a position compared to five or six years ago, seven or eight years ago, where the proportion of tax is lower and that that is going to be a challenge for all. I do think it's absolutely reasonable for Government, in whatever jurisdiction, to be able to lay out how, through modest increases in taxation and a change in the tax system, how it intends to reap medium and long-term economic advantages that will be derived from that. I think it's entirely reasonable. I refer to my example about the Future Jobs Fund. It would be entirely reasonable for the Finance Minister in Scotland with new powers to say, we wish to, through a combination of taxation and borrowing, invest in job creation in Scotland in order that, in the medium and long term, we will reap those benefits. That's fairly sensible mainstream economics in most countries in Europe and I don't see any reason why, with reasonable tax powers of Scottish finance secretary, we wouldn't be in a position to do that sort of thing. Notwithstanding the fact that I actually agree with Bill, but take the view that that would take quite a period of time to achieve maximum effect. In broader terms, do the tax powers proposed by the Smith commission fit in with the model you imagine? Just briefly because I know I'm in danger of speaking too much, they move further towards that situation than we were previously and they are positive for the tax powers. We would, as I say, have gone further in relation to the tax basket, but they go further. Income taxes are important and the ability to vary the bands within income taxation is particularly important, so it's helpful, undoubtedly, in achieving what would be my aims. The SFHI has not commented on this, so I'm offering a personal view that what we're looking at here in the transfer of powers around taxation creates the opportunity for greater fiscal responsibility over the amounts of money that are raised for the Scottish Government to spend, and that can only be a good thing and build on the democratic engagement that there has been and lead to a much more mature dialogue around policymaking in the future. Lewis, I think that you wanted any of the taxation issues around that. Yes, thanks very much. Again, I'll give Dave Mock some of the opportunity to talk a little more if he would like that. I know that the STUC, in considering fiscal options, considered full fiscal autonomy and increased devolution of tax powers backed up by a continuing bloc grant. I wonder if you could say a little as to why you went for the latter, as opposed to the former, and how you respond to the agreement that's been made. At one level, what I won't do is quite the oil price, because I'm not sure if it's below foot with dollars, but the serious consideration for us was that the Scottish Government's picture under independence of what was obviously full fiscal autonomy because it was independence included a range of additional powers that they thought they were going to be able to use under independence to promote economic growth around migration, reductions in spending on defence, which, as a package, was potentially persuasive. If you then looked at the proposals that Smith was looking at, many of those powers clearly weren't going to end up with the Scottish Parliament. So it was a different calculation to look at how appropriate and useful for Scotland's full fiscal autonomy would be out with the lack of those powers. Our conclusion was, and as I say, it was well in advance of the current position on oil, but our conclusion was that some element of a block grant, which recognised Scotland's historic and future oil take, in addition to significantly enhanced tax powers, would provide a more stable but also fair reflection of Scotland's overall fiscal relationship with the rest of the United Kingdom, and that's how we came to our view. And do you feel that—yes, the submission you made certainly made that—do you feel that what has emerged from the Smith agreement provides that certainty both in terms of an increased evolution of tax powers but also the certainty of continuing block grant, continuing Barnett formula funding from the UK? I think it does. I mean, I think that there's been some fairly clear undertakings from the three parties who were pro-devolution and the independence. There's been some fairly clear undertakings from then, and that appears to be reflected in the conclusions of the Smith commission. I don't want to return to this again. There is a lot of devil in the detail in terms of, number one, what mechanisms are used for setting the original level and then indexation after that. I'm certainly no expert on that, so don't ask me to go into too much detail. Also, to return to this point about the new financial framework in which it will be operated, i.e., how flexible would that block grant be in terms of being able to recognise the impact of Scottish Government's spend on UK coffers and therefore to reflect that in a year settlement? I wonder if I could ask the other witnesses if they agree that a continuing element of block grant funding through the Barnett formula of devolved powers and services in Scotland from the UK Government is an important part of the balance settlement that Smith offers? Yes. I think that it flows from what I was saying earlier about fiscal responsibility that remains the case, and that it's clear and transparent in terms of the mechanism for it. I think that the whole issue here in Smith is around detriment between the two Governments. My sense so far is that that is recognised as an issue that has to be worked through, but we're not at the point yet where we know quite what form that will take. Understanding from discussions that we've had earlier this week is that the challenge is understood in theory what the practical mechanisms are for delivering it have still to be worked through. This comes back to what will happen next Thursday when we see the draft closes. I'm not sure that this is the sort of thing that will actually feature in draft closes. I'm not sure if it's susceptible to closes or whether there's some kind of intergovernmental memorandum or something. I'm not convinced that we'll see something next Thursday that actually clarifies this. Just to answer the question, is it right that that element of block grant remains? Yes. One of the points that we were making in our submission to Smith was that whatever the end result, whatever the recommendations, it did need to reflect the outcome of the referendum. We obviously argue about the detail of what that outcome is, but there are things like, for example, pensions where many of us don't want to speak from our colleagues, but many of us would have said that that's a responsibility that must be shared in the current context. In that respect, it's clearly acceptable that some of the revenue comes from block grant. It's about tax, yes. I'd just like to explore a couple of things. We've talked about getting more people into work, but the STUC said to us that they believed in the empowerment of communities that requires adequate control of land ownership, and it's use for the purposes of tax avoidance, whilst in many cases subsidies are drawn down for farming and forestry activities. There's a whole area of taxation in there about avoidance that potentially could reap benefits for the exchequer. There's a whole potential for land value tax, as has been briefly mentioned, to bring in different sources of income, rather than continually working out the balance of the working poor to be able to contribute. The Crown Estate Commission revenues that can be spent in local communities to boost services at a local level, do you agree that the debate about tax has to take on the potential in Scotland and whether we're able to apply it to things like tax avoidance, to things like the ability to have a new form of taxation that actually brings in money from people who are not paying it at the moment? I agree, and obviously the legislation that has been introduced in past at the Scottish Parliament with respect to the existing tax powers does have fairly strong, and I would argue stronger, than the UK's provisions with respect to tax avoidance. Now, their current application is obviously limited because they apply themselves at the moment to only a couple of small taxes, but there's no reason, of course, that principle, which is very close to what we would describe as an anti-avoidance principle, can't be extended to all of the taxes which will eventually be livert, we hope, through this process. One other point, specifically with respect to land and land reform, we do see, partly because of the Crown Estate Devolution and for other reasons, we do see some additional potential for land reform which we think will dovetail fairly effectively with what at least the Scottish Government has stated that it wishes to do with respect to land reform. It isn't necessarily an uncomplicated issue, but we think the missing part in that is capital gains tax and inheritance tax, which, if you really want to complete the full suite of powers which allows you to, at the end of the day, effectively tax something which is a very, very static and therefore taxable resource, then I would have added those two things. It's not unproblematic, but I think that we should have been looking to do that. That's very helpful indeed. No, is that as completed all the questions on taxation? Probably, yes. Alison, I think you had a very general question which I didn't allow you to ask at the beginning, so you want to deal with that now. I think it's maybe Linda next and we're probably winding up after that. Unless somebody else wants to indicate just now, so there's a couple of people still got questions. So Alison first. Thank you, convener. I think in particular, well, you've all spoken this morning about the level of engagement with all those you work with, and I think that's been such an important part of what's happened in the last few months. I think it's fair to say that, with the number of submissions that Smith received, they weren't all given the attention we might like. Even now, I think that there's a feeling that we're not involving wider Scotland as well as we could be or should be. Around some of those recommendations, I think that there's still a great deal of uncertainty and some people are probably going to get the outcome they expect and others are going to get something entirely different, because I think that there's very narrow and broad ways to define some of those recommendations, but I'm just wondering how you think. You speak about a citizen-led process going forward after the clauses are printed, how we might best involve wider Scotland, and you're looking for innovative ways of really involving the public that go beyond the usual tech box consultation exercise. You just wondered if you could expand on that a bit, how we might make sure that we don't lose those important voices as the process continues? Maybe if I could kick off and say that, to some extent, I am speaking here on behalf of other colleagues here and out with this room, because there is a very live conversation going on across Scottish Civil Society about the need for a process and a space for discussion about these very important issues, which sits outside of the quite closed rooms that currently exist in the very rapid and rushed processes that we've been involved in. We've drawn quite heavily on the experience of colleagues elsewhere in the European community around the concept and theme of social partnership, where it isn't just government or politicians that take these decisions about how we are governed and what the priorities are for our society and our communities, but a much more open form of governance that involves all of us, whether it be in private business, whether it be in the trade union movement, whether it be in faith communities or be in the many organisations that make up Scotland's third sector. We would like to see that as a theme of how we do democracy, how we do governance in this country going forward and in that context look again at these very difficult technical issues that dominated much of this morning's conversation. In order to do that, we need a process and a space created for it to happen. Some kind of citizen led process, we've talked perhaps about a convention, where on an ongoing basis, on a periodic review basis, we can actually look at whether the balance of powers between the respective parliaments and indeed within Scotland, the balance between different levels of government and the engagement of communities is happening correctly. We've had a lot of talk in this Parliament in the last couple of years about the need for empowerment, I've mentioned the jargon word already, co-production. What I think we worry about in the third sector is whether that is really happening in reality or whether it is just rhetorical at this stage, and we have to see a genuine embracement by politicians and officials to work differently with communities going forward. That, I hope, takes us wider from the Smith commission and the Smith agreement specifically to a different set of intentions for the way that we operate going forward. Peter, I think that you wanted to follow on from the points that Lucy's made. I think that the broader engagement that we've all called for on citizens-led approach to that engagement and using very clear tools like citizens' juries, those kinds of things. That isn't just about what happens up until May, up until we have an agreement or just the post general election period when we might have legislation. That is about trying to change the way that we do democracy in Scotland. It's an argument that many of us have been making for a long time, but I think that it crystallised around the referendum where we had so much engagement. I think that I would particularly make a plea that whatever the processes that we come up with and that are agreed with representatives is that we specifically look at how we engage with disadvantaged communities, because many communities are engaged, are represented, but those that are more affected by poverty are less likely to be engaged. It was again one of the things that I think all of us here would have welcomed about the referendum was that those parts of Scotland that maybe have felt less involved in democratic politics were involved, and I think that we need to maintain that whatever the processes are going forward. Mary has mentioned several times about the importance of intergovernmental arrangements, and I think that that's an area that I would like to see ideas around where the engagement of civil society is in the future, that that doesn't become something that's a discussion between cabinets or between First Minister and Prime Minister. This is something that actually engages people meaningfully, and it can be done. It's been done in the past and it can be done. I want to make a pitch for housing associations as part of the solution in all of this. There isn't a local authority area in Scotland that doesn't have at least one housing association, and there are membership organisations and people who want to take part in not just providing housing but a raft of things around housing in areas where people may be suffering disadvantaged can take part in their local housing association. I think that the connection between tenants who live and use the services of housing associations and their responsibilities as committee and board members is part of the kind of democratic governance opportunity that Lucy is referring to, but we don't always need to create something from scratch because we have housing associations, for example, already. There are models of the way these things can work already. I'm just going to sort of act to that. I was going to say that actually I see it as the responsibility of all of us around the table, those at this side of the table, as well as yourselves as MSPs, to look to see how we engage. I was at a poverty alliance AGM shortly after the referendum where this very question was asked how do we maintain the momentum and how do we develop that more democratic governance that's so important or felt so important last year and remains to be. There are many of us who are in civil society who are part of the established civil society in a way. I see ourselves in some ways as part of the establishment as well. Then there was a whole groundswell of activism and activity that took place in the lead-up to the referendum, some of whom will want to engage with the likes of us, others whom will want to create their own spaces and make their own voices heard. I think that's the challenge in how do we all work with the housing associations or however there is on the ground to capture those voices. I think that there are many opportunities and many different ways that were shown to us during the referendum depending on the community or the constituency you are trying to reach. I suppose it's about how we create the time to be able to do so because one of the things that any type of engagement takes is time. One of the things that Lucy and others said earlier was part of the frustrations post referendum with the Smith process was not having the time to be able to do that. It's making sure that we are going to be building the time into what we do to enable meaningful, on-going involvement and not just consultation. That's a good point just now and I want to come to Tavish. The committee agreed last week as part of its work programme that we want to go to initially Hamilton, Aberdeen and potentially Shetland to have wider discussions with communities in a focused way but also as one way to describe town hall meetings in the evenings so that people can come and talk to us. I think that it would be useful if the panel were prepared to come and have a cup of tea, a cup of coffee with Duncan and myself before we go and do that to discuss with you how best we can go about that process. It would help us to be able to be much more effective in what we do in the various communities that we go around. If that's okay, we'll try to get something sorted out in our diaries that works. Tavish? Do you want to take him up on that? We never get a cup of coffee, so that's the best offer you're going to get out of a parliamentary committee these days. One of the things that Lord Smith said, convener, was in his own personal introduction and more to the point in the remarks that he made in the National Museum on the morning at the launch of the Smith agreement was about devolution within Scotland, some of you have mentioned it this morning. Do you agree with him? If you do, what would be your area that you'd like to see that happening? This is a theme that has featured a lot in the discussions that we've had in the third sector. I think our view would be that devolution needs to go to the most micro level possible if you are to follow through on the overall intention of empowering people and engaging people and building on that groundswell that colleagues have mentioned that came through the referendum to bring about that different kind of democracy that we're just touching on. What I worry about is that the way that the debate is being pursued is that further devolution within Scotland tends to presume putting more powers to local authorities. I don't think that that's what we're about because government at local level currently suffers from many of the same problems that government at Scottish and UK level does when it comes to the engagement of citizens and the engagement of communities in what they do. So I think we need to make sure that we're multi-dimensional when we're discussing this issue and finding new ways to engage communities and convener are absolutely delighted to over coffee or in whatever circumstances to offer the advice that the voluntary organisation can give you about how you connect to people and open up the conversation about the issues and policies that affect people's lives in a way that helps them to connect. Specific area, policy area that you would highlight to the committee in the context of the theme you've just outlined. Do you mean in terms of what's in Smith or... Anything you can add to a policy or an area of policy that should be at a local level which is not at the moment which is in here? I think that's a very broad and sweeping question and probably not for today if the circumstances are talking about is what was being proposed to be devolved from the UK Parliament and I think my answer would be the same whatever area it was is it's not you know from one level of government to another it's about how each government engages with the wider community. Yeah I think we are going to have more time over the next two years according to a Government minister at the UK level before some of these new powers are devolved. That gives us the opportunity and the time to really genuinely involve disabled people for example in co-producing a benefit you know a disability benefit system carers benefits carers being involved as well that genuinely supports disabled people to participate in community life etc. So it's not about what level it has to be at all levels you know and if we're talking about employability for example you could set parameters for the work programme at a Scottish Government level but implementation is going to happen on the ground and it's going to be need to work with local labour markets etc and that's where local knowledge and again the barriers that disabled people for example face and not being able to access work physical barriers and transport barriers etc could be addressed within you know how you implement the powers that you've got at a local level so you know all the way through there should be a thought of the end user of these services being involved in shaping the policies and the implementation. It's a really important point that's been raised about the further devolution of powers and it's a question of the extent to which we're devolving further powers to whatever the body whether it's local authorities of some other form or whether it's around greater control or influence over implementation. I think the work programme is a really interesting issue. I know that some local authorities I think yesterday were making the proposal that the work programme should go to the local authority area and I think Bill who's already made the point very well that it is about devolving to the level where it makes sense you know it's applying the principle of subsidiarity and doing things where they need best to be done. I think the example of the Scottish welfare fund is instructive where Scotland has now given responsibility to local authorities to deliver the Scottish welfare fund but it's within the overall context of a unified system and I think that from what we hear from colleagues in England and Wales is working well in Scotland compared to the situation in England and Wales so I think we have some examples of where it's a question of further powers being devolved to local levels and whatever form that takes and where it's about the implementation but I think the key point that Lucy's made and that I would echo is that we need to involve people in the decisions about how those powers are used wherever they lie, whether at the Scottish level or at a local level. Just a very brief one on citizen engagement clearly you don't want citizen engagement to be merely a matter of constitutional issues but there is a proposal on the table for a UK-wide constitutional convention and I wonder how you would envision civic Scotland engaging with that should that come into be. In terms of reference of the constitutional convention what it was discussing and what it wasn't before I committed either way I mean I think obviously I mean I mean I think the important point for us is that we continue to see the devolution process in Scotland as a bilateral and not a multilateral one i.e. we don't have to wait or take any decisions which are incumbent upon other decisions that might be taken constitutionally across the UK even though they're important so we need to see the terms of reference i think. I think that that's a general feeling rather than... All I would say is that the committee might like to be aware of the fact that we have multilateral conversations all the time between different parts of civil society in the third sector and I was on it just before Christmas was having conversations about how further developments in the UK constitution would affect civil society in different parts of different jurisdictions and so if that is a general theme we are interested yes and would undoubtedly want to follow up on the suggestion. Duncan's got a supplementary and then I'm going to come to I think it's... almost rhetorical question I mean I think it's for more on the panel moving to and accepting that we need to do more on engagement and indeed you know first steps there but you know to offer that meeting but I'm thinking about the challenges that we all need to give thought to I suggest and maybe we've got some initial thoughts is about the capacity and the focus of this parliament that's going to change quite dramatically given the parliament set up to deal with limited powers or so more and more powers come and more powers still to come so you know I think that there needs to be a debate with wider society maybe I'm suggesting I don't know if you agree that we need to look at what our capacity is like in the Scottish Parliament what the Scottish Parliament committees need to do to maintain their focus and accept their responsibility for holding governments to account and indeed the whole area of policy development which is very important to what we get out there I don't know whether you have any any comments on that but I think we all maybe need to look at that at parliamentarians and more importantly the people that we're purport to represent. Can I have some comment? I'll take a couple of responses because I've still got a few folks I've got to get through so Peter and Mary I think it was. I think that it's an important point that Duncanraith is about capacity and it's about meaningful participation meaningful involvement. I don't think any of us here would want to see a proliferation of meetings and consultations that were having no impact on decisions that were possibly already made so I think that's a crucial point that we need to consider as we go forward but I don't think that should prevent us from saying we need to apply the principle that we involve people outside of elected positions in decision making processes and there are ways that we can do that and capacity will always be an issue but I think there are ways that the committee system could be reformed to try and find ways not to involve we like being involved but to involve people beyond beyond those that are sitting around the table just now so there are lots I think there are lots of ideas from civil society organisations and it's about trying to implement them but we take your point about capacity. Mary, I think that Dave wanted to come in as well. I think he just said what I was going to say so I'll not add to that. Dave, do you want to? Yeah I mean just very quickly I mean I agree I agree with the point and maybe this is unusual for the trade union movement to be self-critical. I think we all need to be really really aware of the fact that we are civil society organisations we do get to engage with the parliament but what not just the referendum but particularly the referendum process I think showed some of us is that that's not enough it's not enough for for I'm enjoying this very much and I'm glad to be here but I mean it's not it's not enough it's not enough for the parliament to have a relationship with existing civil society organisations and think that it's done its job in terms of and that links in I think with the specific idea that we've raised in others about citizens juries and otherwise other ways of finding a representative democracy that is also able to do detail because it's doing the detail which is very often the difficult things we've got the time to do that but unless you've got a two-year referendum process it's very hard for the person in the street to do that so we need to be thinking about you know we need to be thinking about what are the sort of mechanisms that we can use that can supplement the consultative role that this parliament undertakes. I think I've got two other areas to look at Stuart McMillan. Thank you very much. It's aimed towards Dave. Dave, earlier on in your comments you touched upon the workplace protections and also one of them is the issue of the health and safety and also within the submission you highlight the issue that Northern Ireland already has this particular policy area and so in terms of what any powers that could come to Scotland how do you see certainly a Scottish parliament or of any Scottish Government of any colour actually utilising that particular area to improve health and safety in Scotland also bearing in mind about what's already an operation? Sure, so you'll know that the Smith commission recommendation is that none of the core health and safety powers should be should be devolved but that there should be some further investigation really is essentially the the the clucks of it into what we might call enforcement powers and oversight of enforcement powers and particularly the role of the health and safety executive. It's not entirely clear to us whether that's going to be the subject of any draft clause it certainly hasn't been the subject of any discussion thus far within the within the stakeholder group so we're imagining that this is something that's going to be an ongoing discussion rather than something that you're going to see a clause relating to in in in 10 days time. Our view isn't as you know our view is that a much more wholesale devolution should have taken place that there's absolute sense given that there are very particular health and safety concerns in Scotland that makes it different given the devolution obviously of the whole of health which you know we keep talking about safety is one thing but promoting health in the workplace is is just it is important um that the role and the um and the capacity and what the hsc does in scotland should be number one the subject of scrutiny by this parliament in a situation that's potentially analogous with recommendations on the bbc and and other bodies so a specific oversight role of the of the role of the hsc um um from now on which would allow this parliament and allow the Scottish government to begin to look at all of the budgets and all of the engagements that it has or you know across a range of policy areas and look at how it best promotes health in the workplace. As I say we're disappointed that the recommendations didn't go further it's also an area that's quite important to look at with respect to a tarish scots question about local authority devolution because a whole raft of health and safety activity is is commonly managed by local authorities and the inspector it's there so it would be good to be in a position to bring that together under the purview of the scotland parliament and to begin to be able to make some some some positive suggestions suited to scotland's particular needs. I mean 10 minutes left i think that Dave's given this a good description that area i've got two people more people need to get in before we finish here mark i think you're an issue yeah just for that obviously earlier on touched on employment law a note and against in the sduc evidence it says the greatest disappointment was the failure to propose significant devolution in the area of employment and equality law now we've managed to achieve a a 50-50 gender balance in terms of the panel of witnesses today but obviously equalities and equalities legislation goes beyond simply looking at the gender issue given that equalities law is not coming to the parliament what or at least it's not proposed in the smith commission what are the abilities that would exist to affect the kind of changes that we would want to see around equalities and the equalities agenda or is that a significant hamstring by not having that that devolved others will probably want to talk about equality more generally with respect to equality as an employment law i mean the two had to be devolved together or not you can't have an equal pay act a uk level and and equality is devolved to scotland so the two had to come as a suite if they were going to come i think it was disappointing that there wasn't more reference to equality in the smith commission proposals even even even if its ultimate conclusion was going to be for no significant additional devolution you speak of what powers so there's very little in the smith commission that changes the current situation as far as we can see there are residual powers obviously with respect to public sector duties and the and the role that public sector can play as an employer in promoting equalities but to be honest i can't really give you much good news in terms of our reading of what the commission proposal said on equalities that make any difference to the current situation welcome to London i mean i'd echo a lot of what dave said on that for example if you thought that you wanted to address labour market inequalities amongst young disabled people you might be hamstrung in doing that because of the equality act because it says you cannot discriminate on the basis of the age and yet that might be the group that you might most want to assist in getting into work for example now a lot of it at the moment a blind eye has turned to as far as the quality law is concerned but in fact you know that there is the potential that certain initiative government initiatives could be hamstrung if a case was taken to say you can't discriminate in favour of that person even though in doing so you're addressing a labour market inequality that you know exists and that's why control of equality law is so important i think in addressing more generally employability and other issues not only for disabled people women you know black and minority ethnic people younger and older ends of the workforce where you might see inequalities that you want to address and but the equality act might be a barrier to doing so rather than an assistance in doing so i'm going to go to the last question now at lindy farfiani yes just a very quick point of clarification first for dave from trade union perspective when you were saying about having to take equality law and employment law together makes sense i wonder if the same in your opinion applies to all elements of like workplace oh sorry did you hear me anyway that voice like a foghorn so it never really matters i wonder if it also applies to general workplace protection in terms of trade unions because i'm very aware at the on-going discussion at Westminster now about thresholds for strikes i'm also aware of the pcs current campaign because there's a consultation about taking away the right of the union dues paid direct from wages and i wonder if that's something that could be dealt with separately from the employment law from the equalities etc that we've been quite clearly told will not be devolved i should say as an aside it makes me chuckle when people talk about potential races to the bottom on employment law when we are when we've had the week of announcements that we've just um that we've just has um i think the link between employment law and equality is is is absolute and we couldn't have imagined the splitting of those two and we also argued that there's a suite of essentially five powers including the regulation of trade unions health and safety and um and minimum wages which really set together a much more coherent as a package could you theoretically have regulated trade unions differently in scotland under that place piece of law while still having reserved employment legislation probably um could you have separated health and safety law and employment law probably but it wouldn't have been coherent they really they really came together or not thank you and that does lead into my my substantive question which is very much about coherence because practically i think every one of you has expressed concerns that the package has put forward by smith is not in fact coherent i know two of you are on the stakeholder group there may be others i'm glad these discussions are on going but i just wonder how you feel about these discussions about how we go forward it's already been said that there's a bit of time before there's going to be any legislation my own view is that we should treat the smith agreement as a minimum because if we're truly talking about getting a degree of coherence there may well be other things very obviously have to come into the package for example job creation as well as work fair some of the other things that have been talked about through welfare and taxation and i just a general feeling from the consultation discussion that's going on with the scotland office whether you think there is room for sensible discussion to improve the very rushed package that is in fact a smith agreement that's a big question at the end i realize that but i think probably the best way to deal with that is just to ask you as a panel do you think there is obviously room for more discussion and in terms of how we take this forward perhaps you could come to us with written advice about how where we need to go from now when the clauses arrive and how we deal with the legislation i think that's probably the best way to deal with that at this moment because i've only got three minutes left in which to deal with this and i think in these circumstances there are lots of other people wanting to contribute i think a fair question at the end would be though in terms of the welfare powers is it fair to say from everybody from what we've heard as far as the welfare powers are concerned you'd all agree that as far as that package is there is if i've got that right from your contributions that everyone thinks that the the welfare should have been all devolved to the scottish parliament that's not the formal position of the sdc and that's very much linked to our view about the extent to which you can have fiscal devolution you needed much fuller fiscal devolution if you can also answer so yeah i get that okay and just to clarify the sfha thought that in its submission to smith but we are working with the the offer of powers that there is on offer now i'm sorry i'm probably just doing the same as lynded it i asked a too big a question at the end so forgive me for doing that listen okay if you've come in earlier that'd been a great question for earlier in terms of the where we go from now i look forward to having a discussion with yourselves and myself and Duncan and that's the we're coming to the close of the meeting now at the next meeting we have next thursday that will be the business community regarding recommendations to the smith commission and i'll close the meeting but can i ask members to stay behind because Andy the photographer needs to take a photo of that for us as a group but the panellists are free to go it'll take 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