Chamber and committees

I have a question for all three of the Davids, but perhaps Professor David Bell could start. We have focused on Scotland and Wales, but I am interested in what helpful precedents operate elsewhere in the world, particularly those that deal with issues around fiscal transfers and divergence over time. I feel as though we are dancing on the head of a pin, particularly in relation to indexation methods, and some of those problems are not unique. I would appreciate some thoughts from Professor Bell on that in relation to the review.

Earlier, we talked about how one could grow the tax base—in other words, the working-age population—in Scotland. Daniel Johnson mentioned that, the committee has talked about it a great deal, and I would like to understand the issue a bit more.

Professor Bell, in your view, what are the limitations on the fiscal levers that the Scottish Government currently has to influence and grow the tax base, regardless of the indexation method? Of course, we are really looking at the working-age population. I would appreciate hearing your thoughts on the current limitations in the area that we are discussing.

To what extent does the Barnett formula embed structural imbalances in the UK? You mentioned financial services, which is an industry that I was involved in for many years. Over the course of my career, head office functions moved to London, bar a few noteworthy examples such as Standard Life, although things have changed for it as well.

I thank Ed Poole and Guto Ifan for their submission. I echo the sentiments of everyone else on the committee: it really is excellent.

How have the different BGAs per income tax band been beneficial for Wales, given what you have outlined about the difference in your tax base? What are the primary benefits of that system going forward in the light of post-Brexit immigration restrictions?

That is quite a general question. It is fine for whoever wants to answer to do it.

Thank you.

[Inaudible.]—and everybody for the barking that came out of nowhere.

Thank you for that, Ed. Do you have anything to add, Guto? That is my only question.

Thank you for that—although my question was actually about what the limitations of the current arrangements are, rather than the benefits. Perhaps you would like to fill in on that. What are the limitations of the fiscal levers that the Scottish Government has in influencing the tax base? That was my question.

Thank you for mentioning those fundamentals.

I will let you move on now, convener.

I will watch with interest how the Opposition parties, despite their softer stance today, vote on the motion, which focuses on Scottish business, its employees, growing the jobs market and developing the wider economy.

I have some sympathy for the calls from the Labour Party in Scotland for an industrial strategy, and I look forward with interest to hearing how Labour will protect economic development in the light of the threats that are posed by the United Kingdom Internal Market Act 2020 and the Subsidy Control Bill, because Labour’s answer is always that Westminster knows best.

The Tory amendment, despite the undoubtedly well-intentioned acknowledgement from Liz Smith, fundamentally seeks to remove the wording regarding the impact of Brexit on Scottish business and ignores the problems that have been created by Tory policies on immigration. I gently warn the Scottish Tories that they will not be forgiven for sitting supine and soporific as they allow the charlatan who is their leader, Boris Johnson, to inflict that damage.

I will focus on two main areas today, and the first is international competitiveness. I want Scotland to be a leading international player in a number of areas, particularly those that support our net zero ambitions such as developing the hydrogen economy.

We want to be at the top of the food chain in selected emerging technologies, with a higher-wage and higher-skilled economy than there is at the present time. I welcome the Scottish Government’s commitment to invest an additional £500 million over this parliamentary session for new, good green jobs. However, the consequences of Brexit and, in particular, the deliberate choice of the UK Government in restricting access to labour from Europe present a severe threat to many businesses, not least, as others have mentioned, hospitality, construction and tourism businesses, including those that export and those in new technologies. Surely all MSPs across the parties can add their voice to those of the multiple organisations—such as the Federation of Small Businesses, the Convention of Scottish Local Authorities and the Royal Society of Edinburgh—that support the call from the Scottish Government for new temporary worker routes.

Brexit harms our productivity, and we can all agree that both Scottish and UK productivity needs to be better. Critically, Brexit reduces the available working-age labour market pool precisely at a time of emerging skills gaps. If we are to be internationally competitive, we need to be able to attract the highly skilled to Scotland as well as train our own population to the highest standards.

My second area of concern relates to how best to serve our international-class businesses across a variety of sectors. In my Falkirk East constituency, that includes businesses such as Piramal Pharma Solutions and Fujifilm. They are reliant on access to high-quality skills development for their staff to ensure that they maintain their competitive edge and that they can continually improve their productivity.

I have previously spoken about the need to pursue excellence, as it is called for by the likes of the Cumberford-Little report, which was authored at the behest of the Scottish Government by the principals of Edinburgh College and the City of Glasgow College and was supported widely across the college sector. They invite us to move beyond competence and to drive up standards in pursuit of excellence. They are not alone; the Scottish director of WorldSkills has made similar calls. We need to heed their calls to ensure that our businesses and their employees have access to the skills that are needed to remain internationally competitive.

I fully support the actions of the Scottish Government, and I hope that it agrees that combined action to mitigate the clear damage that is being done by Brexit and to strive for excellence in skills is part of the way forward for Scotland.

Throughout the pandemic, the First Minister has made difficult decisions on complex situations—[Inaudible.] Recently, we have heard reports that the UK Government is considering withdrawing free access to lateral flow testing, with some senior UK ministers advocating even shorter self-isolation periods. Further, some influential Tory MPs are even calling for an end to all restrictions, regardless of infection rates, on 26 January.

Even in the face of an endemic disease rather than a pandemic, does the First Minister agree that free lateral flow tests must remain a key part of any protection strategy? Will she also reassure those watching that the gradual lifting of Scottish restrictions will continue to be balanced against wider public health needs?