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Chamber and committees

Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 5 May 2021
  6. Current session: 12 May 2021 to 29 July 2025
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Displaying 3539 contributions

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Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 12 September 2023

Kenneth Gibson

Thank you. That concludes the committee’s questions.

Item 2 is formal consideration of the motion on the instrument. I invite the minister to move motion S6M-09584.

Motion moved,

That the Finance and Public Administration Committee recommends that the Land and Buildings Transaction Tax (Green Freeports Relief) (Scotland) Order 2023 [draft] be approved.—[Tom Arthur]

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 12 September 2023

Kenneth Gibson

I thank the minister and his colleagues for their evidence. We will publish in due course a short report to the Parliament setting out our decision on the draft order.

I suspend the meeting briefly to allow for a change of witnesses.

10:48 Meeting suspended.  

10:53 On resuming—  

Finance and Public Administration Committee

Scottish Fiscal Commission (Publications)

Meeting date: 5 September 2023

Kenneth Gibson

You say in paragraph 26 in annex A of the report:

“The variation in tax revenue generated by the highest earners is likely to continue to be a source of significant uncertainty and forecast error, with very limited data available on this group. In the future, HMRC’s MTD project may improve the situation.”

You then say:

“To continue to improve our forecasts, we will focus on better understanding what determines changes in tax revenues of the highest earners.”

That brings us back to page 3, where you mention “points for improvement”. I take it that that is one of the areas that you are talking about in that respect. What specifically will you be able to do, given the paucity of data with which to improve forecasting in this volatile area?

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 5 September 2023

Kenneth Gibson

Business might move but, with less than 4 per cent unemployment in Scotland, why would workers move to an area if their wages were to go lower? Would they not just get a job somewhere else? Surely, 75,000 people will not move into those zones to get lower wages. It is not really credible that people will move to accept lower wages in an economy where there already are chronic labour and skills shortages, is it?

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 5 September 2023

Kenneth Gibson

That assumes 100 per cent displacement, however, and I thought that the whole point of the green ports was to create new, additional jobs.

Finance and Public Administration Committee

Scottish Fiscal Commission (Publications)

Meeting date: 5 September 2023

Kenneth Gibson

A quick wee calculation off the top of my head tells me that, if there are 18,000 top-rate taxpayers, they each pay an average of just under £140,000 a year. That is a very interesting section of the tax-paying public indeed.

Finance and Public Administration Committee

Scottish Fiscal Commission (Publications)

Meeting date: 5 September 2023

Kenneth Gibson

I think that about 12,000 more people are employed in the sector. However, the productivity outcome is not something that we looked at when we were doing post-legislative scrutiny in this area a year or so ago.

Finance and Public Administration Committee

Scottish Fiscal Commission (Publications)

Meeting date: 5 September 2023

Kenneth Gibson

That concludes questions from the committee. I have one further question, which is about David Bell’s paper. John Mason touched on it, so I thought that I should do likewise.

In the exchange, we discussed the issue of potential spending changes and tax changes that will be necessary—not the specifics, but the fact that they might be necessary. Professor Bell talks about loss aversion, which is something that I have raised before in the committee. That is the issue whereby people, if you give them additional funding for whatever, simply shrug their shoulders and say, “Thanks”, but if you take something away, they are extremely hostile to that, and it causes much more of a political backlash than the gain that you would get from doing something to give them the same financial sum.

What implications does that have for long-term fiscal sustainability and the ability of Governments to take decisions that may require to be taken?

Finance and Public Administration Committee

Scottish Fiscal Commission (Publications)

Meeting date: 5 September 2023

Kenneth Gibson

I wanted to end on that because fiscal sustainability is going to be the key issue in our budget scrutiny this year.

I thank you very much for your evidence today, Professor Roy and Professor Breedon, and I also thank Claire Murdoch. It is very much appreciated, as always.

It has been a reasonably long session so far, so I call a break until 11 o’clock.

10:51 Meeting suspended.  

10:59 On resuming—  

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 5 September 2023

Kenneth Gibson

Derek, you talk in your submission about some 75,000 jobs. I have to be honest and say that the numbers seem quite fantastical to me. What are your concerns regarding displacement? When previous Governments have introduced enterprise zones, there have been concerns that they have simply moved jobs from one part of the country to another part. Obviously, that is particularly acute in areas that border such zones, including, in this case, green freeports.