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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 4 May 2021
  6. Current session: 13 May 2021 to 8 September 2025
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Displaying 3573 contributions

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Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 21 December 2021

Kenneth Gibson

I can understand your argument about the UK, and, obviously, that is something that I subscribe to. However, if people earning over £43,662 are going to be confronted by a 54.25 per cent marginal rate of tax, perhaps the threshold should have been increased, rather than allowing the fiscal drag to ensnare more people in that tax net.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 21 December 2021

Kenneth Gibson

There has been a lot of debate and discussion on the resources that are available to the Scottish Government, but there has not been much debate on capital and infrastructure. Everyone accepts the figure on page 2 of the budget: there is a 9.7 per cent reduction in real terms of the draft capital. That is backed up by the SPICe report, on page 34. That has significant implications for Scotland’s capital programme, particularly as the cost of materials is still much higher than the general rate of inflation. What projects in Scotland are likely to be put on hold, from repairing fewer potholes to building more schools? What are the implications of that severe cut in capital resources?

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Kenneth Gibson

We are scrutinising this budget, not the budget that we might like to see.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Kenneth Gibson

In that case, we will go straight to questions. I will base my initial questions on the statement that Professor Roy has just made. You basically said that we must look at public service reform, and that we must be genuine in that reform. However, the issue will be about how we bring in genuine reform and move towards prevention, more efficiency and better use of the public pound, and whether such reform will be seen simply as cuts, and so on. Could you address how we can approach that?

The second issue is, regardless of whether we do that and regardless of whether it is successful, there is still a long-term issue around the sustainability of the public finances and the relative divergence in tax revenues between Scotland and the rest of the UK. Following on from that—I will ask David Eiser to comment on these matters, too—what can we do to reverse some of the issues with productivity that we have in Scotland? If the economy was 1 per cent more productive per year than it is now, for example, we would not face this problem for much longer. How do we address those broad issues? I ask those questions before we get into the meat and drink of the budget itself.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Kenneth Gibson

David Eiser touched on the Scottish Fiscal Commission assessment, which sits half way between the Scottish Government’s and the UK Government’s assessment of the figures. In paragraph 9, the Scottish Fiscal Commission says:

“Overall the Scottish Budget in 2022-23 is 2.6 per cent lower than in 2021-22, after accounting for inflation the reduction is 5.2 per cent.”

As David Eiser said, one of the issues is that that includes the drawing down of resources. What are the implications for the long-term sustainability of Scottish finances, given the fiscal framework that we have to work within, which has become increasingly tight through inflation and so on?

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Kenneth Gibson

You touched on the issue of demographics, which was discussed a lot in the session with the previous witnesses and in the pre-meeting private session.

David Eiser, perhaps you could touch on that. I would also be happy for you to respond to any of the points that have been raised. We discussed, for example, the fact that immigration is down, perhaps because of Brexit; the birth rate is down; and even the number of younger people who are in tertiary education is down. However, we still have a high—in fact, a record—number of vacancies in Scotland. Around 100,000 people, or roughly 4.5 per cent of the working population, are unemployed. If those people were in productive employment, that would make a difference. What could we do to upskill those people in order to improve market participation and reverse some of the trends that we currently see?

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Kenneth Gibson

You were going to say something about capital, David.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Kenneth Gibson

I sometimes think that we look too much at what is happening in the UK and that we should look further beyond our borders, where there might be many more ideas for us to look at.

That brings us to the end of our time. I thank our guests, David Eiser and Graeme Roy, for again providing thought-provoking and helpful evidence for our scrutiny.

We will allow our witnesses to leave and then I will take a couple of minutes to update members of the committee on a couple of important matters.

Meeting closed at 13:01.  

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Kenneth Gibson

Indeed.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Kenneth Gibson

The decline in the number of younger people in the labour force has come up quite a lot. We discussed it to some extent in our private session before the meeting. What is the reason for that decline? Is it that more young people are in higher education? Is it our lower birth rates, or the fact that there are fewer young migrants in the population? Why is the situation here so different from that in the rest of the UK?