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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 2 September 2025
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Displaying 3539 contributions

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Finance and Public Administration Committee

Scottish Fiscal Framework: Independent Report and Review

Meeting date: 21 November 2023

Kenneth Gibson

The indexed per capita methodology was crucial to securing the deal in 2016. Because it came out at the last minute, it is important that it has been consolidated, so I think that that is a significant gain. Inflation linking capital borrowing is also important. When I looked at the projected increase in capital available as a result over the next four years, I was concerned that it seems to be tied to the gross domestic product deflator, which bears no resemblance whatsoever to inflation in the capital sector. So, even if those limits go up by the amounts that are predicted, will it not still mean that there is a real terms reduction in the capital that is available to the Scottish Government?

Finance and Public Administration Committee

Scottish Fiscal Framework: Independent Report and Review

Meeting date: 21 November 2023

Kenneth Gibson

Yes, indeed.

We are in a state of flux, in a way. There has been a settlement that consideration of the fiscal framework will come only once in every five-year term but, as John Mason pointed out, that five-year term could be upon us relatively soon鈥攊n a year, or 18 months at the most, I think. That is why I wonder whether the Scottish Government is looking at those issues now, whether it is looking to the next stage of a fiscal framework and whether it is looking at other devolved administrations around the world.

A previous committee that I served on visited the Basque Country. Only about 6.29 per cent of its revenue is handed back to the Spanish Government; all the rest is devolved. Pensions and social security are devolved, and only the monarchy, civil guard and defence are reserved. Everything else is dealt with locally, so there are other models for us to look at.

What modus vivendi do you think we might be able to reach in the future, and are you in contact with political parties that could potentially form a future UK Government?

Finance and Public Administration Committee

Scottish Fiscal Framework: Independent Report and Review

Meeting date: 21 November 2023

Kenneth Gibson

I could push more on that. It was interesting to see what is the settled status of the Basque Country, regardless of what Government is in power in Madrid. That is not the situation that we have in Scotland.

Finance and Public Administration Committee

Scottish Fiscal Framework: Independent Report and Review

Meeting date: 21 November 2023

Kenneth Gibson

To finish up, do you have any more points that you want to make to the committee, in view of the discussion that we have had during the past hour and a half? Is there anything that we have omitted?

Finance and Public Administration Committee

Scottish Fiscal Framework: Independent Report and Review

Meeting date: 21 November 2023

Kenneth Gibson

Thank you. That concludes questions from committee members, other than me: I still have one or two questions, just to wind up. Surprise, surprise.

Given that VAT assignment is, in effect, a dead duck after eight years of deliberations, does the Scottish Government intend to pursue VAT devolution or to look at how we can press for devolution of other taxes. Of course, it takes two to tango and the UK Government might not be keen, but we could, for example, press for devolution of alcohol and tobacco duties, which would generate a disproportionate income, given our overconsumption of both substances. Where would the United Kingdom Internal Market Act 2020 come into play, there? You touched on that in an earlier response. What are your priorities, other than VAT assignment? Do they include national insurance, corporation tax or any of the other taxes that I have mentioned?

Finance and Public Administration Committee

Scottish Fiscal Framework: Independent Report and Review

Meeting date: 21 November 2023

Kenneth Gibson

The fiscal framework was negotiated in 2016, and the United Kingdom Internal Market Act was imposed in 2020, so will it have an impact in the future if other areas are devolved? We will seek clarity on that.

John Mason talked about a new Government; we need to know whether Sir Ed Davey and his new Administration would be keen to have a better discussion with the Scottish Government.

Finance and Public Administration Committee

Scottish Fiscal Framework: Independent Report and Review

Meeting date: 21 November 2023

Kenneth Gibson

Audrey, the discussion is about the fiscal framework. I know that you had only one hour鈥檚 notice of the meeting, but you are moving away a wee bit from the subject matter that we are discussing and deliberating today.

Finance and Public Administration Committee

Scottish Fiscal Framework: Independent Report and Review

Meeting date: 21 November 2023

Kenneth Gibson

Thank you very much. I also thank Matthew Elsby and Niall Caldwell for their contributions.

That concludes the evidence on the fiscal framework review, the report and VAT assignment. We will consider the next steps in private at our next meeting. That concludes the public part of today鈥檚 meeting. The next item on our agenda will be taken in private.

11:01 Meeting continued in private until 11:11.  

Finance and Public Administration Committee

Interests

Meeting date: 21 November 2023

Kenneth Gibson

Good morning, and welcome to the 30th meeting in 2023 of the Finance and Public Administration Committee. We have received apologies from Michael Marra; Daniel Johnson is attending as his substitute. We have also received apologies from Michelle Thomson; Audrey Nicoll is attending as her substitute. I welcome both to the committee.

As it is Audrey Nicoll鈥檚 first time attending the committee, I invite her to declare any interests that are relevant to it.

Finance and Public Administration Committee

Scottish Fiscal Framework: Independent Report and Review

Meeting date: 21 November 2023

Kenneth Gibson

You are being diplomatic in the responses that you are giving. It seems to me鈥攃orrect me if I am wrong鈥攖hat you were presented with a take-it-or-leave-it situation with little wriggle room. As my mother would say, half a loaf is better than no bread. Was that the kind of approach with which you were presented?