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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 5 July 2025
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Displaying 1221 contributions

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Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 13 December 2022

Liz Smith

Good morning. Professor Miles, I will take you back to the issue of inflation. When you discussed that with the convener, you rightly identified the problem with Ukraine. What you said is very much in line with other evidence that we have taken, which suggested that the larger part of the inflationary situation just now is due to cost factors.

I am interested in a remark that you made in your November forecast, in which you said that although,

“In the UK, CPI inflation is set to peak at a 40-year high of 11 per cent in the current quarter”,

it is expected to fall back “sharply” during the course of next year. Given that the cost-push factors are likely to still be quite strong, where does the “sharply” come from?

Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 13 December 2022

Liz Smith

On the demand side of the economy, given that nominal wages are obviously increasing, when do you expect there to be an uptick in demand in the economy that might have some impact on inflationary pressure?

Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 13 December 2022

Liz Smith

Thank you very much for that answer. I have one more question. Obviously, there are predictions that America is likely to have a recession in 2023—not a real crisis, but nonetheless quite a downturn. Do you have any thoughts as to how that might impact on the world economy, and on the British economy, in particular?

Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 13 December 2022

Liz Smith

Thank you.

Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 6 December 2022

Liz Smith

I want to ask a technical question on the back of commentary by some economists that, following the end of lockdown and the severe restrictions that we all faced when we were unable to do some things, service industries are beginning to be rebooted. Can you put your finger on any evidence that that is happening a bit more successfully than in other areas of the economy, because we are now out and about and taking advantage of services that we could not use previously? Have you any data to suggest that that commentary is accurate, or is it too early to tell?

Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 6 December 2022

Liz Smith

I heard that interview, too, and I thought it was interesting. It also flagged up that there are regional differences in the ways that people are reacting to their local high streets, which is another potential worry.

Obviously, different factors affect inflation—there can be demand-pull or cost-push scenarios. Is it your understanding that the greater component of high inflation has been more on the cost-push side than the demand-pull side—whether that has been because of a lack of supplies from Ukraine or the huge hike in energy prices?

Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 6 December 2022

Liz Smith

I asked that question because we have suffered from fiscal policy and monetary policy pulling in opposite directions. The UK has been trying desperately—perhaps not very successfully, at one stage—to get the right balance on fiscal policy, whereas the Bank of England’s remit is to control inflation, and therefore monetary policy has pulled in the opposite direction. That difficulty means that it really matters what kind of inflation it is, which allows us to determine what policies are put into practice, which is why I asked that question.

Public Audit Committee

“Scotland’s public finances: Challenges and risks”

Meeting date: 1 December 2022

Liz Smith

That is a very helpful answer. It is good to hear that a paper is coming in early 2023 about that. Is it your understanding that some of the money that is held in the reserves of councils or IJBs could be used to ease some of the financial pressures that councils are under just now?

Public Audit Committee

“Scotland’s public finances: Challenges and risks”

Meeting date: 1 December 2022

Liz Smith

So, that could that help the budget, from that angle.

Public Audit Committee

“Scotland’s public finances: Challenges and risks”

Meeting date: 1 December 2022

Liz Smith

I have just one more question, convener.

You rightly mention in paragraph 35 that the Scottish Government has capital borrowing powers and that, while capital borrowing cannot be used to support resource spending, there are certain types of capital spending that could be moved to resource spending. Can you clarify whether there are specific criteria that need to be adhered to in order for that capital spend to be moved to resource spend?