Chamber and committees

I understand that. My last wee question is this: given the nature and principle of fiscal transfers, have you looked at equivalent reports from other countries on how they attempt to model them? I am aware that no other countries have entirely similar fiscal transfer processes to Scotland, but have you considered how they attempt to model that scenario in general?

What I am exploring and referencing are your data needs, not Social Security Scotland’s. Given that you have pointed out a prevalence of certain conditions in males, surely the only way in which you can have data accuracy is by requesting and collecting sex and gender data. I am taking particular account of Professor Ulph’s point that there might well be conditions that we are not yet aware of but which we might find occur only in males when we look at their sex and immutable characteristics instead of their gender. After all, we can all foresee a time in which gender is much more fluid. I am therefore asking about your specific data needs rather than what is, as Mr Mason has called it, a hot political topic. If you had your choice among your data needs—and given what you have said about separating them out—would you prefer to have sex and gender data where they are specifically relevant to, say, the greater prevalence of certain conditions?

I also want to talk to you briefly about your fiscal sustainability consultation paper. I can see that you are already making strenuous efforts to get contributions; indeed, I saw your piece on LinkedIn, Professor Roy. As you set out, it is an odd set-up. You comment that Scotland does not have any debt and you are trying to model something that is quite odd to people looking in from the outside within the UK.

You mention that there are a number of risks, such as that the data that is contained in the paper will be taken by either side of a polarised debate and used to prove various things that are not true at all. We have already seen that for “Government Expenditure and Revenue in Scotland”, which is largely discredited by serious economists such as Professor David Simpson.

What risks do you see? Are you, by attempting to take this approach, laudable though it is, simply embedding those risks? In other words—this is the million-dollar question—how on earth can you project fiscal sustainability on the basis of fiscal transfers in Scotland?

It appears that, every time we come back from recess, the price that the Scottish people are having to pay for being thirled to the UK has increased, and the cost is accelerating. The underlying causes of the cost of living crisis have some short-term elements, and we all hope for a speedy resolution to the war in Ukraine. However, we cannot ignore the long-term root causes of the situation.

The UK’s frankly terrible economic performance over recent decades and the unequal nature of economic growth in an overcentralised UK state mean that the real wages of most people are well below what they would have been had long-term rates of growth matched the average of other large developed states. Low wages make many of our fellow citizens hugely vulnerable to price rises in essential areas such as energy and food, and many in our society cannot absorb the extra costs.

As recent research from the Bottom Line think tank has observed, growth in small advanced economies that are similar to Scotland has been accelerating, leaving the UK trailing in their wake. The UK quite simply lacks the broad shoulders of small advanced economies.

Some of the drivers of inflation and the cost of living crisis are often forgotten. Covid has stimulated big shifts in consumer behaviours that whole sectors of the economy have not been able to deal with quickly enough due to supply chain disruption, labour market shortages and other disruptive effects of a Tory Brexit. Long-term issues of low levels of investment have meant that there is little spare capacity to respond to increases in demand in some sectors, and a raging debate is now on-going, albeit not here, about the inflationary effects of quantitative easing.

Those fundamental issues are not going to be resolved by a central bank using the crude single tool of interest rates, nor are they going to be resolved by our new Prime Minister, if early indications are anything to go by.

The fear of forthcoming energy price rises is palpable. The truth of the matter is that the current energy market is not able to provide energy to households and businesses at a price that they can afford. It is a market failure, and a failure of the UK Government as the creator of that market. It disproportionately affects consumers and businesses in Scotland despite Scotland being an energy producer.

Although I welcome the pre-trailed freezing of prices for 18 months, the question that has to be asked is who will pay for it. Companies and banks may benefit from Government-guaranteed bridging loans, yet consumers could end up paying over the odds for years—and paying the price of Tory failure. The energy market cannot continue in its current form.

I am on the record as calling for more borrowing powers for the Scottish Parliament, but arguably the energy crisis has shown why it is power over policy choices that we badly need.

The mitigations that the Scottish Government has put in place—the game-changing Scottish child payment, and an overall £3 billion, this financial year—are to be applauded, but are we really the type of country whose biggest ambition is to mitigate rather than fundamentally change? Are the Scottish Tories and the Labour Party in Scotland so supine that the answer is always that anybody and everybody can do better than us to protect our most vulnerable citizens?

In my constituency of Falkirk East, every business will be hit hard, given that there is no energy cap for them, with small businesses being most at risk. Around 85 per cent of the roughly 2,000 businesses in Falkirk East are very small, yet they employ approximately 7,650 of my constituents, many of whose jobs are now at risk. Some may therefore face the even greater price of a loss of employment on top of escalating domestic energy bills and general inflation.

Apparently, notwithstanding the damage that is being done to the Scottish people and Scottish business, our new Prime Minister sees a large part of the solution to the UK’s energy crisis as being the exploitation of Scotland’s rich energy resources—from wind to oil and more—but not in the interests of Scottish people. Indeed, as increasing numbers of Scottish people twig what they are up to, the Tories seem intent on curtailing the rights of the Scottish people to have a say in their future, and on circumventing democracy.

We face a cost of living crisis and an energy crisis. Both are underpinned by political chaos that will not be stopped by the introduction of yet another hapless Tory Prime Minister. That is a choice of two futures. I choose Scottish independence, not Tory dependence.

My final question is about capacity, because that also flows into the time element. Have any areas lacked the capacity to do what needed to be done? Has that been an underlying issue, or has it just been the standard issue that there is always too much to be done?

This is my final final question. One of the challenges that any organisation faces is silo working. Are you able to ensure that the learning from the process is cascaded throughout all departments of the Scottish Government? I am willing to bet that we will be in a similar position at some point with a similar project, so is that routinely done?

Thank you for all the information that you have provided thus far. We have covered a lot, even in this short inquiry. As my colleague John Mason pointed out, the question is: to what extent can a financial memorandum truly be accurate? We all recognise the complexity involved.

I want to give you the opportunity to reflect on the process that you have been through. Knowing what you know now, and with the benefit of hindsight, what would you actively choose to do differently? We all recognise that improvements can be made in developing these things—and, indeed, in our scrutiny of them—and I would appreciate hearing your reflections on that.

In general terms, the tension between effective accounting and scrutiny of spend—you allude to that in relation to needing more time—will never go away, because the only accurate estimates are at the end of a project, as we all know. Have you any reflections on finding the right balance on that healthy tension? That is a common problem with such things.

Scotland should believe that she is hopeless, helpless, worthless and voiceless—that is the ambition that the unionists have for Scotland. Their belief that they can prevent the Scottish people from having a vote on Scottish independence is based on the fundamentally undemocratic idea of the sovereignty of the Westminster Parliament and the denial of the principle of the sovereignty of the Scottish people. Does the First Minister agree that attempts to block the right to self-determination and the sovereignty of the Scottish people cannot be sustained while, simultaneously, attempting to claim that democracy matters?

As the minister has outlined, the pandemic caused considerable uncertainty in budgeting, with a need to respond quickly to rapidly changing circumstances. He mentioned the additional uncertainty caused by late notice—or, indeed, lack of engagement—from the UK Government in terms of when funding could be expected.

I note that, despite that uncertainty, Audit Scotland concluded in its recent report, “Scotland’s financial response to Covid-19”, that

“The Scottish Government ... managed its overall budget”

well. That said, can the minister advise what lessons can be taken from the experience of public spending during the crisis and what changes could be made to better manage such uncertainty?