Agenda item 3 is an evidence-taking session with two of the Scottish Government’s nominees for appointment to the Scottish fiscal commission. We will hear from the third nominee at next week’s meeting. Members have received copies of the nominees’ CVs and completed questionnaires.
We welcome Lady Susan Rice and Professor Campbell Leith to the meeting, and I invite both candidates to make an opening statement. I do not know whether you have decided between yourselves who will go first.
We have not, convener.
Good morning and thank you very much for inviting us both to this meeting and for considering our nominations to the new Scottish fiscal commission—in my case, as the potential chair.
I am aware that, for some months now, the Finance Committee has been taking testimony from a wide range of people to develop its own view on the creation of a fiscal commission, which I understand the committee supports, as do others in Holyrood. Over a number of days, rather than months, I have been reading through much of the testimony that the committee has collected from witnesses, and I have no doubt that if I read the testimony a second time, I would gain even more knowledge from it. The committee has taken a thorough and wide-reaching approach to its work; some of that testimony has also begun to help me form my own thinking, so in that regard it has been useful.
I noticed in particular a couple of words that were probably used with greater frequency than others across the evidence sessions: independence and transparency. I will say something about those two words in general and in relation to myself, and then I will add two more words to the mix.
I believe that, to be genuinely effective, the fiscal commission needs to be trusted for the work that it does, the way that it does it and its overarching commitment to the public good. However, trust is not something that individuals bring to the table themselves; it has to be earned. It has to be bestowed by others. I believe that a fiscal commission whose members are perceived to be and are in fact independent of political, personal and professional agendas and whose work is done as transparently as possible will go a long way towards winning public trust, so I was glad to see the words independence and transparency mentioned so frequently.
I have no conflicts that should interfere with the perception or the fact of my own independence. As far as transparency is concerned, over the years I have come to value greatly doing things in a transparent way. There is huge value in a wider audience understanding what you are doing as you do it and in being clear enough about what you yourself are doing to be able to explain your activities to that wide audience.
The two words that I want to add to independence and transparency are challenge and competence. I want to add challenge, because over a long career I have learned that the best ideas and plans are made even better when others who represent diverse perspectives constructively challenge those ideas in their formative stages and right through their development. In my board director roles, in particular, I am expected to provide challenge at all levels and to all parties in the relevant organisations.
Competence might sound like a given but it should never be. Even with all the best ways of working and even if you have transparency, challenge and independence, the output will not be sufficient if those who are producing it lack a high level of competence. I am sure that you already have that in mind.
I am honoured that my name has been put forward as the potential chair of the new Scottish fiscal commission. I have quite a lot of experience in helping to create new entities, and I thoroughly enjoy doing so. This is an important step for Scotland and one not to be taken lightly. It will undoubtedly require hard work, focus, widespread engagement with a range of stakeholders and perhaps a bit of wisdom.
I would bring to bear a knowledge of the business and financial climate, a personal style of constant learning and asking questions, the rigour of my early scientific training, extensive experience as a board director, chairmanship of a range of bodies and a fierce desire to try to make a success of anything that I am involved with.
I was brought up to embrace a public service motive and have done so in many ways over many years. If my appointment is approved, I will look forward to working hard to create something that is brand new and genuinely important for this country and seeing that it operates to the highest standards. It would be a great privilege to do that. Thank you.
Thank you very much. We will hear from Professor Leith next.
I agree with everything that Lady Rice has just said, but I also want to make three brief points. First, as an academic whose work has mainly focused on optimal policy design, macro policy design and the design of institutions to support that optimal policy, I feel that it really is an honour to be asked to be involved in setting up a fiscal commission for Scotland and in seeing those ideas implemented.
11:00Secondly, when I read the documentation associated with the decision and when I previously gave evidence to the committee, I was struck by the consensus that had built around the creation of a fiscal commission for Scotland and the key properties that it must have. Like Lady Rice, I saw the words “non-partisan”, “independence” and “transparency” come up time and again in the documentation supporting the commission’s creation of the fiscal commission. The way that the commission is being created, with fixed-term appointments and so on, reflects the need to achieve those goals, but again, if those things are to be fully realised, they have to be embodied in the people who serve on the commission. As a potential member of the commission, I recognise very deeply how important it is that the commission has those elements of independence and transparency, and were I to serve on the commission, my actions would fully support that.
Finally, the operation and the practical logistics of the fiscal commission must be discussed by the commission itself. Once appointed, its members will need to meet and have a dialogue with the relevant bodies. However, it might be important to note that, although we would hope that the fiscal commission will help improve the Scottish Government’s forecasts, forecasting is still an inherently difficult process and, no matter how good the commission is, forecasts will still be wrong. A large part of the scrutiny that the fiscal commission offers is not just of the headline number that is produced but of the whole process and method of forecasting.
In addition, the fiscal commission will not do its work just in the heat of the moment, around the publication of the draft budget. It might spread its work throughout the year, scrutinising the modelling that is being done and how that can be improved, and engaging with Scottish Government forecasters on a more continuous basis.
I thank both our witnesses very much not only for making those points but for being to the point. I will ask a couple of questions, and then colleagues will come in with their own.
Both of you have touched on independence, and you are right to say that the issue has been very much to the fore of the committee’s thinking on the fiscal commission. Is the key to independence getting the system correct and the right checks and balances in place, or is it down to the individuals on the fiscal commission having the right attitude?
I will go first again. [Laughter.] Campbell Leith and I have just met, so we need to work out how to work together.
Both of the things that you have mentioned are key. I very much welcome the nature of the appointments, the notion that our names are being recommended to this committee and the fact that if you think that we are suitable, you will recommend us to the wider Parliament. That is very important as it will create a degree of responsibility and, indeed, keep us mindful of that greater responsibility, whatever day-to-day pressures come along.
However, the issue is also about how we conduct ourselves—and by “conduct”, I mean our past and future conduct. We need to be seen as independent in what we do and as being in positions in which there can be no potential gain. I am not trying to build my curriculum vitae. Unfortunately, I think that you have seen it—it is dreadfully long. I do not think that I would be gaining something personally from this; for me, it is purely a matter of public service and of wanting to engage in something that is hugely important at a very exciting time. That will help with independence.
I agree. We have discussed the various formal mechanisms that can facilitate independence, but the fact is that they alone will not ensure independence. Independence will come from the members of the commission.
Having worked in this area for a long time now, I know that the commission will have value only if it is independent. I want the commission to succeed; I whole-heartedly buy into the notion of the commission’s independence, and I would work to ensure that that was maintained.
We spent a bit of time discussing whether the commission should be responsible primarily to the Parliament, the Government or both. Do you see any tensions between your relationship with the Government and your relationship with the Parliament?
Not necessarily and intrinsically, if we all operate properly. You could create a scenario in which there might be such tensions, but I welcome the idea that we are answerable to the Parliament. It is a public form of responsiveness, which is what really matters. Obviously we would have dealings with the civil servants who work on the economic modelling for the Government as well as with the Government itself, but creating that route to the Parliament gives us the means to stay above undue influence, or the sort of influence that one would not want. My understanding is that the Government is keen for that to happen and that it wants the fiscal commission to be seen as independent.
If challenges arise, we will deal with them. That happens in life all the time; it certainly happens all the time in my business life and when such challenges come up, we address them. The ultimate route back to Parliament is the one that takes primacy.
There are examples of both accountability approaches in fiscal councils throughout the world, and it is not obvious that one dominates the other. What ultimately matters is how we behave.
Ms Rice, when you talked about being able to explain the commission, did you mean explaining it to the Parliament and the Government or to the wider public? Does the wider public need to know about the commission? Does the public need to know just that it exists, or do you think that it will get to know the organisation very well?
I suspect that the wider public, as broadly defined, will not get to know the organisation very well, but there will be members of the public who might be interested. Any business that goes before Parliament could be of interest to people beyond those elected to Holyrood. When I talk about explaining something, I mean that, in what can be a highly technical area, it is important that you are able to put things into fairly plain language and to express and communicate what you are doing, what your decisions are and why they have been made in a way that ordinary people like me can understand.
That is important because it speaks to your own grasp of what it is that you are doing. People who can explain technical things only in highly technical terms do not always understand them. That is why I mentioned that. There will be broader interest in the commission because of the things that are new here, what with the new taxes that have been devolved under the Scotland Act 2012 starting next year, and people might want to see what that really means and how it is working. I hope that they will be reassured by the existence of the Scottish fiscal commission.
Part of the objective of full-scale fiscal councils in independent countries is to add credibility to the policy-making process. As you would want people who are making the big economic decisions out there in the wider economy to understand what the fiscal council is doing and the credibility that it lends or does not lend, you would hope that its work gets out there. Given the Scottish fiscal commission’s current, rather more limited remit, the issue of wider credibility affecting wider-scale economic decision making is perhaps not so important at this point.
Professor Leith, you referred to the narrower remit than exists in other countries, and perhaps the commission’s remit is also narrower than some of the people who have given evidence to us—for example, Jeremy Peat and Professor Bell—have suggested it should be. Is that a disappointment to you? Given that your work focuses on optimal policy design, I wonder whether you—indeed, both of you—will be slightly frustrated by the fairly narrow remit. Do you think that there is scope for more analysis to be carried out beyond that?
Shall I start?
Yes, please.
Given the current state of devolved powers, what the fiscal commission will do is open up the scrutiny and transparency elements of the forecasting process within the Scottish Government and, in a sense, change the culture that produces those forecasts. That is where its value lies at the moment.
For me, there would have to be a critical change in the operation of the fiscal commission if the Scottish Government took on significant debt-issuance powers. If that happened, it would become more like the full-scale fiscal commissions or fiscal councils that we see throughout the world. If and when that power is granted, the fiscal commission would have to transform itself, really move up a gear and do something quite different.
Do you want me to comment?
Yes.
Let us keep the Mutt and Jeff thing going.
As I commented in my responses to your questionnaire, it is quite right for this to start off in a small and contained way. I say that because, as I have said, in my professional life I have helped to create lots of new entities, organisations, committees and boards. The thing that makes them work successfully is just to get them started, which you can do if you have a defined remit and you know what you are doing, if the organisation is not too big and if you are not trying to do everything all at once. Let us get this up and running this year; indeed, I think that that is the committee’s own guidance. As times and matters change, the remit might grow, and we would be in a much better position to expand, reshape or change things if needed.
That is interesting. I take it that you are both saying that the commission could evolve if Scotland had further fiscal responsibilities under either devolution or independence.
The deputy convener has already touched on the issue of independence with a small “i”. Do you foresee any potential areas of difficulty in your dealings with the Government and revenue Scotland? How should the memorandum of understanding prepare for any conflicts between the three bodies?
As I have not really had any personal dealings with revenue Scotland, it is very hard for me to respond to that question. Obviously if I took on this role I would develop that relationship.
The memorandum of understanding is really important. A full and frank discussion around the table between the members of the commission and those with whom we would be dealing would be the starting point for talking about where potential issues, strains and conflicts might come up and helping each other understand fully the commission’s remit, the boundaries and the expectations. The memorandum of understanding is a very early step in the creation of the fiscal commission, and I suspect that the draft that is agreed initially might not be the final draft. These things evolve over time. You have to work; you have to rub elbows together, in a sense, because sometimes you cannot anticipate points of tension. If they develop, you will need a good personal relationship in order to raise, address and deal with them.
Professor Leith, you point out that it might be desirable
“to avoid the Commission’s work being concentrated in a very short period prior to each forecast round. This would then spread the scrutiny work throughout the year and enable the Fiscal Commission to undertake some limited longer-term research work”.
Do you have the capacity to take that approach? Would you seek to engage a wider range of people in your work or do you feel that working on an on-going basis, as you suggest, would be quite manageable for you, given your other responsibilities?
Yes, given that the remit of the fiscal commission is quite tightly defined at the moment. Once we get into the nitty-gritty of how the Scottish Government is producing these forecasts and once we get access to the modelling work that underpins all that, it might become apparent that certain elements of that work are more material than others, inducing sensitivity in the forecast assumptions and so on. Those might be the areas in which you would want to undertake some limited research work to see if that part of the forecasting process could be made more robust; indeed, the same might apply generally in our scrutiny work.
Given that assumptions about projections for house prices underpin some of the tax revenue forecasts, we might want to do some research on the literature on forecasting house prices and how that compares with the Scottish Government’s approach. However, given the research budget that we have and the time constraints that we all face, our ability to do that is necessarily going to be limited. To the extent that it would be possible, though, it would be a useful way of having an on-going relationship with the forecasters.
Thank you.
11:15
Lady Rice, in your written response to question 3 in the questionnaire, you said, on the operation of the SFC, that it
“will require a lot of data, a lot of information ... the expertise to analyse the economic models ... information on wider economic factors”
and the
“likely need to identify a small cohort of skilled individuals”.
When we took evidence either last week or the week before last from Jeremy Peat, he said that he was concerned about the small budget that will be available to the SFC. Is that an issue? A group of three people can do only so much, and it is clearly going to be important that the group has some backup. Is the budget sufficient for that?
It is hard to give an absolute yes or no answer to that. There are two ways of responding to such a question; the first would be to outline what one would conceive the fiscal commission developing into, and the second would be to look at where we start off. I think that we should begin with the proposed £20,000 budget. As Campbell Leith has said, the commission’s remit will be quite restricted in the first few months. I said in my written response that we would need all the aspects that you quoted, but perhaps I should have said that it is likely that we would need them. To be honest, I think that until we get going I do not know what we will need. However, the expectation is that we would need to turn to some experts or expertise to support our work, as three of us alone probably could not achieve that satisfactorily.
I think that £20,000 is something to get started with. Coming from a background where every penny counts, I am not one for spending much. As my public sector experience through my association with the Bank of England has made me very conscious of value for money, I think that the pennies would be spent wisely. If for some reason we needed more, we would have to speak up. Over time, as the work develops, we might well need more.
The plan is for the commission to be hosted at the University of Glasgow, which has indicated that it will support the commission’s work. That might help the £20,000 go a bit further than it would if we were just commissioning research from outside organisations.
Thank you. I think that you said earlier that you had just met one another, but do you know of each other’s work? Professor Leith, you have contributed and written extensively. I wonder whether Lady Rice knows what you have written and whether you will provide a challenge to each other or think along similar lines economically.
The simple answer is that I know Professor Leith a bit by reputation. I am not an economist in my own right, and I do not follow economic papers. I follow them to an extent as they relate to my role with the Bank of England, in which I need to be very focused on economic matters, so I hear about lots of reports and read lots of information. Some of that information might well have come from Professor Leith.
It did.
But it might not have registered with me that I was reading your work, so, to be honest, I cannot say whether we share a perspective. However, Jean Urquhart has asked an important question about challenge and—to use a bit of today’s jargon—group-think. As I said in my opening comments, challenge is absolutely essential. In fact, that is what this is all about, because when we can challenge each other we come out at a better place. I do not know whether Professor Leith and I share economic views, but because I am not an academic economist I will not necessarily look at the world in the same way that he does. It is perhaps an advantage that what I bring to the table is a pretty deep knowledge of the business environment, the consumer world and the financial climate.
I have no difficulty in asking what I call daft-lassie—as opposed to daft-laddie—questions, because they bring out a lot of good information. In fact, it has become almost my trademark style. Moreover, challenge is not necessarily about finger-pointing aggression; instead, it is about exploring a matter and saying, “Help me understand it in this context.” You end up in a better place when you do that. I have no problem with the concept of challenge, whether or not I find that I agree with Professor Leith—and I do not know yet whether that is the case.
I am a quantitative macroeconomist, but I do not have the strong ideological bias that other economists sometimes have. I want to get my hands on the model and the data to see how they work. That is the contribution that I would make to the commission.
Thank you.
Lady Rice, I am struck by the fact that you have said a couple of times that you are driven by a public service ethos. You said that you were brought up with that ethos and that you are driven to serve on the commission by that sense of public service. That is reflected in your written submission, through the other positions that you have taken up. Will you say a little bit more about why that idea of public service ethos is important to you?
I was literally brought up with that notion. As you will know, or can tell from my accent, I was brought up in a country other than this one. In the past century, America had huge immigrant populations and, in some ways, that continues to be the situation. My grandparents migrated to America. I was brought up with the notion that, if life has not treated you dismally and things have gone reasonably well, you have an obligation to find a way to give back. I was raised with that mantra. I had numerous relatives who did various things of that sort.
We do not do what we do in isolation or for ourselves. We have lots of communities or circles round us. Sometimes, that is family and those close to us; other times it is our physical community. We are part of a bigger society. Justice and fairness are part of my psyche. I was brought up with that view and it feels natural to want to do work of this type.
I will soon complete seven years as a director of the Bank of England, which is quite a notable institution. The workload has been hugely demanding but fascinating. It has been a great privilege to have done that work. That is public service in every sense of the word. The timing of a commission role would work well for me, because I am keen to continue to give something back, especially in Scotland, which is my home.
You would bring to the table that ethos, which is what drives you to take up the challenge.
That is one aspect. I mentioned creating new entities. I am excited by the detail of making the commission work and putting it together, and testing myself and learning. The process is all about learning, especially for me. The role would involve all the things that interest me.
There are many reasons for doing the role. I have used the word “important” several times, but it is an important undertaking. It is the right one and a good one and I want to help—with others, because you do not do something yourself—to make the commission happen.
Professor Leith, you made an interesting point in your written submission—I recall that you made a similar point previously to the committee—that, in your discipline and in academia generally,
“the integrity of research is maintained by the peer review process, but ... also by ensuring other researchers have access to sufficient information to enable them to replicate the findings of published studies.”
You continue:
“I believe that following this approach as far as practically possible”
in relation to the commission would be a good thing. That begets the question: who would be the peers of the fiscal commission?
Do you mean to review our work?
Yes.
I suppose that our commentaries would be published and then scrutinised by anyone who chooses to scrutinise them. It might also not be a bad idea to have periodic reviews by other fiscal commissions, academics and non-academics of the quality of the commentary that the fiscal commission offers. That seems reasonable.
I suppose that your general point is that you should be transparent, and that your peers—if they exist—should be able to access the information. If they are interested in it, they should be able to access it.
Yes. That is the gold standard. It used to be the case that academics who did research would publish a paper, and it would then be a hard slog to replicate what was done in that paper. These days, with electronic resources, all the computer code and the data is available, and someone can just take it off the shelf and see where the results have come from, change things, do robustness checks and so on. The more that that is done, the more it can be ensured that the original research is of a high standard, with no corners cut.
Lady Rice, I wish to touch on question 5 in the questionnaire, which asks:
“Do you hold any other roles ... which might give rise to or be perceived as being a potential conflict of interest”?
You sit on the Council of Economic Advisers. According to the council’s remit, it has three key themes on which to advise the Government, one of which is economic levers, so you have an advisory role on that. However, the Scottish fiscal commission will have a challenge function regarding the application of those economic levers. How will you avoid the perception of a conflict of interest between those two very different roles?
I have given a good deal of thought to that. If I felt that a conflict of interest developed, I would simply deal with it. The role of chairing the fiscal commission would take primacy in that instance. I would see how it went. What I add to the discussions at the Council of Economic Advisers draws on my business knowledge and my knowledge of our markets in Scotland. We do not develop policy in those discussions in any specific way. If there was a conflict, it would have to be addressed, pure and simple.
So, as things stand, your intention is to remain on the Council of Economic Advisers and to carry out both roles.
My intention right now is to do both roles, unless there is an issue. I have known that I would be sitting here at the committee for only a couple of weeks or even days, so I have not thought through that issue or spoken to anyone regarding my Council of Economic Advisers role. If it was genuinely a problem, we would deal with it.
The Council of Economic Advisers has methods of dealing with such matters. If you will forgive me, I will tell a bit of a story. When I was invited to join the council in 2011, given my role at the Bank of England, I had to get permission from the governor for any external appointment. I had discussions at the Bank of England, which had similar questions, but it encouraged me to proceed, with the proviso that, if any matters came up that related to monetary policy, I would be excused because, even though I do not sit on the monetary policy committee, I am responsible for its proper running. That was put in writing to the Council of Economic Advisers, which accepted the proviso. It has used a sub-committee system to ensure that, in such instances, I have not had to be involved.
There are ways to address potential conflicts. If there really are conflicts, I will have to think the matter through properly. It is a good question to have raised, but I would address such issues.
I call Annabelle Ewing.
Thank you, convener.
I am sorry—Michael McMahon should be next.
I thought that I was getting in a bit early.
That was my mistake—sorry.
Lady Rice, question 3 asks:
“How do you think the Scottish Fiscal Commission should operate in reaching its position”?
Your answer states:
“This doesn’t mean that all the judgements of the Scottish Fiscal Commission or any other body, in retrospect, turn out to have been the ‘right’ ones. But it does mean that there must be no imputation of conflict or carelessness in making those determinations.”
In a previous answer, you state that, in some instances, it would
“be helpful ... to consult the OBR”.
If we had a pound for every time the Office for Budget Responsibility has been criticised in the Parliament, we could probably cover the cost of running the Scottish fiscal commission. Do you hold the OBR in high regard?
11:30
I do not hold the OBR in regard one way or the other. I mentioned the OBR in the context of getting into the detail of setting up the Scottish fiscal commission. The committee has already done this, but I would want us to look at other fiscal commissions, particularly those that have been set up in the past few years, to find out a little more about problems that they have had and to learn from any issues that they have had. The relationship to the OBR that I referred to would involve gathering knowledge on top of what one can get from the testimony that the committee has published.
My point is similar to one that Professor Leith just made. Forecasting is forecasting—there is no guarantee. There is no such thing as a right number out there. People do their best to understand the circumstances and come up with something that seems reasonable. We would be asked to comment on the reasonableness of the Scottish Government’s forecasts. That is the best that we could do. I was saying that our goal would be to do that as well as we could, but I point out that nobody and no institution ever gets it all right all the time. That did not relate to the OBR or how it is structured.
I know that the comment did not relate to the OBR. I was just making a connection, given that you want to consult the OBR, even though it is heavily criticised in the Parliament because its forecasts are considered to be less than valuable.
I am interested in whether Professor Leith has any take on the value or standard of the OBR’s work.
I will make one more comment before passing over to Professor Leith. What I will say is not a judgment about the quality of the OBR’s work. When a body is judged to have done very well, one can learn from it but, if it is judged to have done less well, one can learn equally well and sometimes learn more.
I understand what you say. I was perhaps less aware of the discussions that the Parliament has had, but I am very much aware of them now. However, that would absolutely not diminish my instinct to have conversations with the OBR, because one learns from that.
When an institution such as the Bank of England does forecasting, it recognises the uncertainty, so it produces fan charts. Those fan charts quickly become wide, which indicates that the forecast can be anywhere between a very high number and a very low number. Forecasting is inherently difficult.
The OBR does not do the formal confidence interval or fan chart analysis. It does a sensitivity analysis of its forecasts, so it says that, if the scenario changed, its central estimate would differ. Huge uncertainty is still implicit in all those forecasts. Forecasters are bound to get it wrong—that is in the nature of forecasting.
Would the Scottish fiscal commission do forecasting that is more like the Bank of England’s or more like the OBR’s?
I understand that we would not do forecasting—we would make judgments about the work of those who prepare forecasts. I hope that we would think a little about scenarios, as that is a useful way to understand the efficacy of a determination, but we would not do forecasts.
I am not the economist among the three candidates whom the committee will talk to, but my instinct is that I like fan charts, which explain the potential universe and are more helpful to people. I often say—it is my husband’s phrase—that numbers are one interpretation of reality, but other realities are out there. People can get hooked on the number being the right answer. What Professor Leith and I are saying is that there are often a number of answers.
As a substitute on the committee, I felt it only polite to wait for my colleagues to have their say first, given their much more detailed involvement in the background to the fiscal commission.
I want to pick up on something that was raised in a question to Lady Rice. I note that, in your response to question 1 from the committee, you list a number of public bodies in which you have been involved in dealing with policy matters. You made the point that those bodies reported to different Administrations of different political hues. Given your extensive CV, it would be reasonable to take the view that you have established a long and robust track record of independence from the political process. Do you wish to add anything on that, Lady Rice?
Thank you for saying that. My point was that I do the things that I am asked to do in my extra time, if you will, because I am interested in the issues and the impact on society and so forth. I would not ever do something as a favour to an individual. I am not interested because someone of a particular party approached me—I do not approach the world in that way. These are things that have interested me. I have had good relationships with each of the Administrations since Holyrood began.
I have a couple of final questions. Professor Leith, you talked about the commentaries being published. In answer to question 3, you said:
“in my view the Scottish Government forecasters should develop their modelling techniques and present the Fiscal Commission with both their provisional forecast and as much detail of the underlying forecasting process as possible.”
Presumably, there will be a provisional forecast, then some response or commentary from the commission, then a more solid final forecast and then further commentary from the commission. I do not know how much you have thought this through, but how much of that would you hope or expect to be published? Would all of it or only some of it be published?
I would need to discuss that with all relevant parties. The focus of the remit is on the forecast that is produced for the draft budget. The formal commentary will have to be attached to the final forecast that is produced for that. However, in answer to other questions, I said that I thought that it would be good for the commission to have an on-going look at the process and the modelling work that is done in the Scottish Government to produce the forecast. That will inform the detail of the commentary that is provided, with the specific numbers that are attached to the forecast.
There is no need to have continuous commentaries going on throughout the year, but the commentary that is attached to the forecast at the time of the draft budget will include analysis that comes from on-going scrutiny of the whole forecasting process, not just the forecast itself. That is how I suggest doing it but, again, that is merely a suggestion. I am open to discussing it.
Do you want to comment, Lady Rice?
That is a reasonable way forward. We three commissioners—if it is us three—will have that discussion with others and we will take other suggestions as well. We will give it some thought. At the end of the day, we want to be useful. We would absolutely have to have a comment in written form when the draft budget is submitted in the autumn, which would give our best judgment on the reasonableness of the assumptions around the new taxes. That would be an absolute given. We would have to discuss anything else. That is quite a reasonable starting point.
We have heard from the two of you today, and we will meet the third candidate next week. If I understand correctly, we are talking about two economists and one banker and businesswoman. Is that how you would describe yourself, Lady Rice?
That is good enough—I would say “ordinary person”.
Leaving aside the individuals, do you think that that is a good mix for the commission?
Yes. The forecasting process is, in essence, a macromodelling process, which is where I have experience. Lady Rice has broader experience, which means that she can ask the right questions and facilitate communication of the commission’s work more generally. Professor Hughes Hallett is more involved in practical policy analysis, which is a slightly different bent to the more techie approach of my research. So the mix seems to be quite reasonable, as far as I can see.
I think that as well. We have two economists who do quite different things with their economic disciplines. Both elements are important, so it is good to have a balance. I would simply draw on all my experience and it would come to bear. If Professor Leith will forgive me, I do not think that you want a purely academic exercise—you want something that can be related back to society at large and to the public that you all represent.
We have gone through all the committee’s questions. Does either of you have any final comment or statement to make?
I do not think so. The questions were good and I look forward to hearing the outcome of the committee’s deliberations.
I thank you both for taking part. It might have been a new experience for you, and it has been a new experience for the committee as well. I hope that it has been okay.
As I explained at the beginning of this item, the committee will hear from the third nominee at its meeting next week, after which we will consider whether to recommend approval to Parliament and agree a short committee report.
At the start of the meeting, the committee agreed to take the next two items in private.
11:41 Meeting continued in private until 11:45.Previous
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