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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 5 November 2025
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Displaying 1001 contributions

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Finance and Public Administration Committee

Implementation Plan Progress and Updated Complaints Procedure

Meeting date: 25 January 2022

Daniel Johnson

I thank the Deputy First Minister for his answers.

Finance and Public Administration Committee

Implementation Plan Progress and Updated Complaints Procedure

Meeting date: 25 January 2022

Daniel Johnson

Thank you, convener. I apologise for not being able to attend in person this morning.

I begin by asking about how the policy will be reviewed and maintained. One would hope that, by its very nature, it would be seldom used. However, such things are often left on the shelf and are sometimes, therefore, creatures of their context and time. It is imperative that the policy be proactively reviewed and renewed on an on-going basis to ensure that it is appropriate for its current time. What thought has gone into that? How will the procedure be reviewed on an on-going basis?

10:30  

Finance and Public Administration Committee

Fiscal Framework (Independent Report)

Meeting date: 11 January 2022

Daniel Johnson

I do not have any—[Inaudible.]—but I would be interested to hear whether David Eiser has any comments—[Inaudible.]

Finance and Public Administration Committee

Fiscal Framework (Independent Report)

Meeting date: 11 January 2022

Daniel Johnson

Does either of the other Davids want to come in?

Finance and Public Administration Committee

Fiscal Framework (Independent Report)

Meeting date: 11 January 2022

Daniel Johnson

That is helpful. In the interests of time, I will not ask any other questions, but Guto Ifan might want to add something.

Finance and Public Administration Committee

Fiscal Framework (Independent Report)

Meeting date: 11 January 2022

Daniel Johnson

I, too, thank the witnesses for their written submission, which is extremely interesting. In particular, I am interested in figure 3.4, which shows the impact of applying the different models to Scotland. I wonder whether the Scottish Government needs to be careful about what it wishes for. In discussions on the fiscal framework and the Welsh example, the assumption often is that indexation for separate bands would be in addition to the existing IPC model, which would of course reduce the negative consequences. However, the grey dotted line in the graph in figure 3.4 shows that applying that model but using the comparable method would actually result in our being significantly worse off.

The points that you have just discussed with John Mason also need to be added into the mix. The issue should not necessarily be seen in isolation from the Barnett formula and the block grant. In a sense, John Mason was talking about the endpoint that the Barnett formula works towards for Wales but, if we look at what the Barnett formula currently delivers for the nations, we see that, in essence, Scotland ends up being the best off from that side of the equation.

Should we be careful about what we wish for, given that, with the application of indexation of separate bands, we could end up having the comparable method? Is there a risk for Scotland in a re-examination of Barnett and how it applies to us?

Finance and Public Administration Committee

Fiscal Framework (Independent Report)

Meeting date: 11 January 2022

Daniel Johnson

I have one final question, which is about the long-term sustainability of the method. If we are basing it on tax and welfare decisions in Scotland compared to policy positions for the UK as a whole in 2016, that becomes more difficult as time passes. It is feasible, because the UK has, by and large, pursued the same overall policies on the method and size of taxation and welfare spending compared to 2016. However, if the UK Government diverged significantly from that, either by increasing or decreasing tax or welfare spending, projecting what would have happened from that 2016 position becomes more and more difficult, if not impossible. Will we have to have a far more fundamental rethink in five or 10 years’ time?

Finance and Public Administration Committee

Fiscal Framework (Independent Report)

Meeting date: 11 January 2022

Daniel Johnson

Is the fundamental point not that, regardless of what model you choose, if we have a devolved taxation system, Scotland needs to grow its income tax faster than the UK average in order to benefit? In a sense, it does not matter which model we use; that fundamental truth is the overarching one.

11:00  

Finance and Public Administration Committee

Fiscal Framework (Independent Report)

Meeting date: 11 January 2022

Daniel Johnson

[Inaudible.]

Finance and Public Administration Committee

Fiscal Framework (Independent Report)

Meeting date: 11 January 2022

Daniel Johnson

It is important to try to establish critically the purpose and effect of each of the measures around the block grant adjustments, as that is where the bulk of the discussion and debate is likely to be. I want to clarify a few things. In essence, the comparable method seems to involve isolating the ability of a Scottish taxpayer to pay tax in comparison to the average UK taxpayer. On top of that, in the index per capita method, we have a factor to offset the ability of Scotland to grow its population relative to the rest of the UK. Wales has a system that isolates each tax band, which, in a sense, offsets its ability to change the make-up of its tax base. Is that a fair summary of what the three different methods do?

In your report, you say that the review of block grant adjustments is a political decision, not a technical one. I think that I understand that. Therefore, is the political decision the extent to which the devolved Governments are able to influence the size of their population, the extent to which their citizens are able to pay tax and the structure of that tax? Is that a fair summary of what the political drivers of the models might be?