Chamber and committees

On a totally different note, I will pick up on various bits of the conversation about public understanding. Either last year or the year before, I mentioned to you some of the challenges around the media’s reporting of your publications, especially regarding underspend and the difference between technical underspend and the cash-in-a-pot-that-is-still-sitting-there kind of underspend. Have you done any additional work on how that is communicated to the media and to politicians? Obviously, politicians have other incentives to portray certain numbers in certain ways. When we talked about that last year, it was about the impact that that had had on public sector pay negotiations at the time: a headline says, “Scottish Government underspends by £1 billion” while a group in the public sector cannot negotiate to get £100 million for their pay deal.

I take on board that it is a decision for the Government. I would be interested in your view though, on whether you think that that would aid public understanding of the process. Take NDR as the example, because it has the narrowest range of ready reckoners that just look at whether the poundage rate goes up a bit or down a bit. The debate each year tends not to focus on that, however, but more on whether specific sectors should get a relief or a levy attached, and so on. In general, those are the key decisions that are made during budget negotiations. The classic issues are whether the hospitality sector should get relief in any particular year and whether relief applied down south should be applied up here.

Would it be valuable if the Government expanded the ready reckoners into areas such as those, particularly when there are proposals in the public domain that have come not necessarily from the Government but the hospitality sector or the Scottish Trades Union Congress, or whoever it might be? Would it be helpful if the Government then projected those proposals and included them in the reckoners?

Yes, I think that we have all been guilty of saying additional rate at various points, but it has always been the top rate, since it has been devolved.

I will jump around again. Richard Robinson mentioned the ready reckoners. I am interested in your view of whether what the Government currently publishes as ready reckoners do the job that is needed, particularly in terms of public understanding, to which they are key. The projections around some of the potential changes to income tax are relatively detailed, in so far as they lay out 15 or so scenarios. On non-domestic rates, I think that there are only three scenarios, which is very narrow. Have you had any discussions with the Scottish Government about changes that it could make to the ready reckoners, perhaps by broadening out the range of scenarios?

Just to push on that a little bit, it does sound like you are saying that the Government has not articulated its economic strategy in those terms and that it has not drawn that very obvious link between some sectors being more valuable to us in terms of devolved taxes than others and therefore prioritising those sectors. Have you ever heard the Scottish Government express it in those terms?

On that point about the fiscal framework and the incentives that it provides, normally, any Government is incentivised to grow the economy to increase tax revenue. That is not exactly the case for the Scottish Government. If you take two growth sectors in Scotland—video games versus film and television—the number of staff that you require per product in the video game sector is a lot lower than in the film and TV sector. Therefore, the video game sector is much more lucrative in terms of tax revenue when it comes to corporation tax, which is of no value to us, whereas film and TV require far more people on medium-ish salaries and therefore have a higher income tax yield.

Have you ever seen the Scottish Government articulate its economic objectives in terms of—to be cynical—how to game the fiscal framework? In other words, identify which sectors will be the most valuable not just to the Scottish economy, but to Scottish public services in terms of the impact that growth in those sectors would have on devolved taxes versus reserved taxes. We cannot prioritise every sector; one of the criticisms of the NSET is that it prioritises everything. It does not make choices like, “Do we prioritise video games or film and TV, and what would the relative impact on tax revenues be?”

Good morning. I will be happy to be proved wrong on this one because it has been bugging me, although I think that I have I figured it out. In exhibit 10, the two tax policy changes are referred to as changes to the “additional rate” and to the “top rate”. Are you talking about the same rate for both those policy changes? Although the additional rate exists in the rest of the UK, in Scotland we have always referred to the top rate. From what I have been able to figure out, the information is drawn from an SFC report that uses “additional rate” when it means “top rate”. Can I just check that we are, in both lines in exhibit 10, talking about what in Scotland we refer to as the top rate?

That was not my main question; it has just been bugging me and I have been trying to figure it out.

Exhibit 10 is about lost revenue from behaviour change. Obviously, it would be better to have £65 million than £11 million, but it is still £11 million that we would not have had otherwise. What would be useful to know in weighing up the policy change is what if any other negative impacts there have been. Has the behaviour change at the upper end—for example, if consultants in the NHS have reduced their hours to avoid higher tax—had an impact on the provision of services? Does it have an impact on spending in the real economy and therefore a knock-on impact on business? Is it possible to quantify any of that, or are we getting far too far into secondary effects? Without being able to quantify any negative effects of the policy, all that we can say is that £11 million is not as good as £65 million, but it is still £11 million that we would not otherwise have had and where is the harm?

The minister will be glad to hear that I will be very brief.

Amendment 191, in the name of Lorna Slater, would simply change “may” to “must” in section 17(4). The effect is that it would require ministers to issue guidance to the council regarding the composition of the apprenticeship committee and its functions, closing off the possibility of ministers not issuing that guidance. I hope that the amendment is therefore seen as straightforward and that committee members will agree to it.

It is a tricky balance to strike. At the moment, in the region of 90 per cent of all public data in Scotland is not proactively published—it is not immediately available to the public—so we are not at the tipping point into a data dumping situation. There might be specific situations in which us cynical Opposition members feel that, for example, the Government has done a data dump on a Friday afternoon to try and mask something but, on the whole, the balance is skewed massively towards public information not being routinely published and available to the public. The aim of amendment 128 is to provide a clear steer that such publication should be happening routinely, without becoming so prescriptive about what should or should not be published that either we force the publication of something that should not be in the public domain or we get it wrong and give institutions the excuse they need simply not to publish information that they should. It is always tricky to strike a balance. My aim is to set a clear direction of travel and, ultimately, trust institutions to make a judgment about what is or is not appropriate.