Chamber and committees

Many of the areas that I am interested in have been covered. I want to explore the main theme of this evidence session. Thus far, the evidence has highlighted the considerable complexity that is illustrated by the fiscal framework. It also points to the fact that there is a bit of a johari window issue in that politicians are driven to look at very nearside issues in relation to the budget in hand at this moment in time, although our earlier conversation was about the lack of long-term infrastructure investment—capex and so on. Public sector net investment was 8 per cent of gross domestic product in the 1960s and had dropped to 0.5 per cent of GDP by the 1990s. That big thematic framing of the UK macroeconomy tends to be forgotten when we are looking at this exercise.

That is a long explanation for what is a simple question. Given that this evidence session is about a strategic approach to the Scottish budget, in summing up, what areas would you like to pull out that have not been considered thus far to genuinely attempt some consideration of a strategic approach to the Scottish budget?

You looked at me, Professor Bell, so I will go to you first.

Good morning. I have a few random questions. David Lonsdale, I want to ask you about your intriguing comment about competitiveness pertaining to the tax strategy or framework, as you described it. Can you give us a bit more flavour of that? For the record, you said that tax strategy should include an additional principle of competitiveness

“to stimulate greater levels of private sector investment and consumer demand, to ensure a strong economic recovery.”

That is an excellent response. In asking that question, I was not making a singular plea for hypothecated taxes—it was merely a question.

Have David Lott and Vikki Manson anything to add on that? I appreciate that it is a bit of a left-field question.

You have touched on the subtle point that I was making, which is less rigid than the one on hypothecated taxes. It is about following the funding of such measures.

Thank you everyone. That helpful thread has taken us back to the complexity of the big picture.

That is interesting and I suspect that it will be picked up further.

Vikki Manson, there is an intriguing bit in your submission, which I will quote for the record:

“It is simply impossible to expect to see an increase in economic activity when the proposed Economy National Outcome intends to deprioritise economic growth.”

You go on to refer to the wellbeing economy. That is being looked at and we know that work is under way, but I would like to get a little more flavour of what you mean by that. Also, given that you made your submission prior to the budget, do you now have more confidence that the budget will encourage economic growth?

I suspect that some of those themes will be picked up by the Economy and Fair Work Committee, of which I am also a member, which is convenient.

My final question picks up on a point that my colleague Ross Greer alluded to. As we are taking a strategic look at the budget, I am interested in the panel’s views on hypothecated taxes, by which I mean those that are aligned to particular purposes. Through the use of the term “ring fencing”, we have seen such an approach being passed on to councils, yet it is not being applied to the Government itself. Ross gave the example of minimum unit pricing. There has also been a suggestion that the £640 million of ScotWind moneys would just go on building supply-side infrastructure and so on for renewables. This is a bit of a throwaway question, but what are your thoughts on the principle of hypothecated taxes? Would that intrigue you, given that this session is about strategic budgets? David Lonsdale is going first on that one.

Many of the areas that I am interested in have been covered. I want to explore the main theme of this evidence session. Thus far, the evidence has highlighted the considerable complexity that is illustrated by the fiscal framework. It also points to the fact that there is a bit of a johari window issue in that politicians are driven to look at very nearside issues in relation to the budget in hand at this moment in time, although our earlier conversation was about the lack of long-term infrastructure investment—capex and so on. Public sector net investment was 8 per cent of gross domestic product in the 1960s and had dropped to 0.5 per cent of GDP by the 1990s. That big thematic framing of the UK macroeconomy tends to be forgotten when we are looking at this exercise.

That is a long explanation for what is a simple question. Given that this evidence session is about a strategic approach to the Scottish budget, in summing up, what areas would you like to pull out that have not been considered thus far to genuinely attempt some consideration of a strategic approach to the Scottish budget?

You looked at me, Professor Bell, so I will go to you first.

I thank my colleague Kenneth Gibson for securing the debate. We all know that my preference is to have independence for Scotland rather than to protect devolution, but devolution is all that we have at the moment. I am surprised that there are not more members from other political parties who have previously claimed to respect devolution wanting to speak in the debate.

We know that the United Kingdom Internal Market Act 2020, brought about in the wake of Brexit, has been a significant re-centralisation of power away from the devolved Administrations. For example, as has already been mentioned, it gives new spending powers to the UK Government in devolved areas, allowing it to bypass the devolved Governments and fund activities and organisations directly. We have already heard reference to October 2020, when the then bill was rejected by this Parliament.

Kenneth Gibson quoted a little of what Alex Rowley said, but Alex Rowley, in addition to describing the bill as

“a full-on attack on the existing devolution settlement”,

also said:

“we will not give support to any measures that will reduce and constrain the competence of the Scottish Parliament.”—[Official Report, 7 October 2020; c 75.]

How right Alex Rowley, representing the Labour Party in Scotland, was then. As has already been asked, is that still Labour’s position today? It is clearly not.

The Tories were the only party in this Parliament that supported the UK Internal Market Act 2020, following the bidding of one of its architects, Michael Gove. It is such a pity that, in the early days of this new UK Labour Government, Michael Gove’s influence seems to continue unabated. Frankly, the truth of the matter is that, since coming to power, the new Labour Government has made no moves to eliminate, or even to raise or discuss, any of those measures that reduce and constrain the competence of the Scottish Parliament—indeed, the situation is quite the reverse.

If the member can confirm on the record that the Labour Party—the new UK Government—has active plans to roll back the 2020 act, I will be delighted to accept his intervention.