Chamber and committees

Thank you very much. However, that was one of a number of suggestions about how we could raise revenue. All the submissions are disproportionately weighted in favour of additional expenditure but there are significant in-year reductions in the money that is available to the Scottish Government. There was a 5.2 per cent real-terms reduction in revenue and a 9.8 per cent reduction in capital this year—and that was with a 2.4 per cent inflation assumption, which has been blown out of the water to more than 10 per cent.

The point that Ross Greer made earlier was significant. I will let Stephen Smellie answer the questions that he asked in a minute, but first I will bring in Catherine Murphy because there is a compelling submission from Engender about how women are disproportionately impacted by the cost of living crisis. I ask Catherine to speak to that for a minute or two and discuss practical steps that the Scottish Government can take in its 2023-24 budget to try to change the situation.

Good morning and welcome to the 24th meeting in 2022 of the Finance and Public Administration Committee. Our first item is a round-table discussion on Scotland’s public finances in 2023-24, and the impact of the cost of living and public service reform, as part of our pre-budget scrutiny.

I welcome to the meeting Alison Douglas, chief executive of Alcohol Focus Scotland; Polly Tolley, director of impact at Citizens Advice Scotland, who is attending instead of Rory Mair CBE, who could not be here today; Catherine Murphy, executive director at Engender; Clare Reid, director of policy and public affairs at the Scottish Council for Development and Industry; Aaron Hill, director of policy and membership at the Scottish Federation of Housing Associations; David Lonsdale, director of the Scottish Retail Consortium; and Stephen Smellie, depute convener of Unison Scotland.

I thank everyone for their detailed written submissions. Of course, we have moved on a wee bit from the content of some of those submissions, given that we have had two Chancellors of the Exchequer since then, last week’s statement and the appointment of a new Government.

Incidentally, the committee also invited Scottish Chambers of Commerce to take part in today’s discussion, but we have not received a response to our invitation. Exploring the written views of witnesses at committee meetings is an important part of our inquiry process, and this is the second time this session that the committee has invited Scottish Chambers of Commerce with no success. I consider it discourteous to the committee that, on this occasion, it has not even responded. I encourage Scottish Chambers of Commerce to contact us to discuss the matter. In the meantime, the committee may well wish to reflect on that when it comes to future inquiries.

We are very grateful to the witnesses for their attendance today and, indeed, for their in-person participation. We have around 90 minutes for the session, which is intended to generate a discussion rather than be a straightforward question and answer session. If at any time you would like to raise a point, please indicate to the clerk and I will bring you in.

I do not intend to chair the meeting in the way that I did last week; I could not do so in any case, because it is not a straightforward Q and A session, as I mentioned. There have been so many changes that we may dot around a wee bit in relation to some of the issues. That said, we will try to stick to some of the major issues that face us.

I will bring Clare Reid in first. Taxation is obviously at the forefront of everyone’s minds at the moment, following last week’s statement. In your submission, you state:

“Scotland competes with other parts of the UK and other countries to attract investment and talent, and tax rates are one of the factors. Scotland’s ability to retain, grow and attract businesses, and retain and attract key workers, will be absolutely pivotal in generating the rates of growth which will make its public finances sustainable and fund improvements in public services and spending.”

What is your view on where we should go from here with regard to taxation in Scotland?

Ross, you asked the initial question. Do you want to follow up on that?

Thank you—that is very helpful. If anyone wishes to comment, I will be happy to bring them in.

Only Michelle Thomson has indicated that she wishes to speak, but I will also bring in Stephen Smellie again in a minute.

Given that a significant proportion of rent comes from housing benefit, what are the Treasury implications for funding coming to Scotland? What will be the impact on Scottish housing associations and local authorities?

The £5.4 billion a year is across society and the £800 million is specifically for the NHS. Is that right?

Sure—come in now. Don’t worry—you will still get to say your bit on tax in a couple of minutes.

We will come back to some of those things.

I am sure that Catherine Murphy would agree with that.

We will move on, because time is marching. The point that Ross Greer made is very pertinent here. If the Scottish Parliament was to agree to many of the increases in taxation, they would have to be implemented from April, because we would have to do that under the Scotland Act 1998. We face funding pressures of £1.7 billion in the current financial year. How do we deal with those pressures given the financial straitjacket that the Parliament has?

I will come back to you on that point before too long.