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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 7 September 2025
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Displaying 3573 contributions

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Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 7 December 2021

Kenneth Gibson

What about Scotland? What kind of lessons can we learn for our budget from what the UK has done? We have had six weeks to reflect on what has happened, and the Scottish ministers will be setting out their proposals from Thursday. What pitfalls should they avoid and what kinds of things can they do in a positive sense, given the policy restrictions, of course?

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 7 December 2021

Kenneth Gibson

The Institute of Fiscal Studies has said that policies have been led by the OBR. We will ask it about that.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 7 December 2021

Kenneth Gibson

I have a final question on taxation before I turn to colleagues. You state in your submission that the amount of gross domestic product that is raised in tax will be 36.2 per cent by 2026-27, which will be its highest since the early 1950s. You also state that taking his past two budgets together, the Chancellor of the Exchequer has

“raised taxes by more this year than in any single year since Norman Lamont and Ken Clarke’s two 1993 Budgets in the aftermath of Black Wednesday.”

You wrote the submission on 27 October. What impact do you think that will have on future growth projections, given that you have had six weeks in which to analyse the situation further?

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 7 December 2021

Kenneth Gibson

We shall end this evidence session on that very positive note. I will not ask for the name of the hotel.

I thank Mr Hughes and his colleagues for taking the time and trouble to come all the way to Edinburgh. That is really appreciated in the current circumstances, and it definitely gives you lots of brownie points from the committee. We much prefer to take evidence face to face, if we possibly can.

I also thank you for all your evidence. We could have asked a lot more questions if we had the time, but we have a full agenda today. Thank you for coming to see us, and we hope to see you again before too long.

Our next witness will be Carl Emmerson from the Institute for Fiscal Studies, who will join us remotely. I suspend the meeting to allow final connection checks to take place. We will be back at 10.29 for a 10.30 start.

10:26 Meeting suspended.  

10:30 On resuming—  

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 7 December 2021

Kenneth Gibson

On 27 October, Paul Johnson said that the budget was “very disappointing” and that it showed that household income would be “pretty stagnant” at around 0.8 per cent growth this year. He went on to say,

“This is actually awful,”

pointing to

“High inflation, rising taxes, poor growth keeping living standards virtually stagnant for another half a decade.”

In his speech that day, he went on to say:

“Average gross earnings could have been some 40% higher had pre crisis trends continued.”

How does that compare to other western countries?

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 7 December 2021

Kenneth Gibson

Over the past few years, how accurate has the Office for Budget Responsibility been, compared with the SFC? There are significant differences in the forecasts for the next five years; the SFC predicts that the tax take in Scotland in five years will be £486 million more than the OBR has predicted. It is interesting that the OBR predicts that £78 million will come in from Scottish landfill tax while the SFC predicts only £18 million because of the impact of policy. That is a £60 million difference, which is quite a huge difference for that tax. To help us to consider how the OBR is doing relative to the SFC, will you say how accurate the two organisations’ predictions have been over the past few years?

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 7 December 2021

Kenneth Gibson

We will soon see.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 7 December 2021

Kenneth Gibson

The Institute for Fiscal Studies has been quite excoriating in its critique of the UK budget, and I noticed that one of the comments was that

“A crucial ingredient in this year’s policy decisions has been the way in which OBR forecasts appear to have driven policy.”

You touched on that a wee bit in response to Michelle Thomson’s questions, but what can and should the UK and Scottish Governments do differently in terms of fiscal policy? There has been a lot of critique—given your role, I understand that—but do you have more positive suggestions for how we can make things better?

11:15  

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 7 December 2021

Kenneth Gibson

What should Scotland’s spending priorities be, given what Daniel Johnson said about there being a jump in resources this year, but a real-terms decline in the following two years? Sustainability of the public finances is, obviously, a major issue for us in Scotland.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 7 December 2021

Kenneth Gibson

One issue is that the OBR does not necessarily have access to the data that it requires to look at specifically Scottish circumstances. Are there any data streams that could be added to make forecasting in a Scottish context more accurate?