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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 3 September 2025
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Displaying 3539 contributions

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Finance and Public Administration Committee

Scottish Fiscal Framework: Value Added Tax Assignment

Meeting date: 14 November 2023

Kenneth Gibson

I turn to John Ireland. In its submission, the Scottish Fiscal Commission says:

“we are still in a situation where the estimates of VAT raised in Scotland are too volatile to be suitable for the purposes of VAT assignment.â€

Finance and Public Administration Committee

Scottish Fiscal Framework: Value Added Tax Assignment

Meeting date: 14 November 2023

Kenneth Gibson

We queried that. I specifically asked about Scotland relative to the other 11 nations and regions of the UK, because our geographic and demographic profile is very different. For example, our rurality is quite different from that of the Midlands, for example.

I will let John Mason in, but we have talked about VAT assignment, and everyone seems to think that it is a dead duck, for the reasons that have already been discussed such as the fact that the Scottish Government would not have any control over it. Do people feel the same about the devolution of VAT at this time or do people have different views on that?

Finance and Public Administration Committee

Scottish Fiscal Framework: Value Added Tax Assignment

Meeting date: 14 November 2023

Kenneth Gibson

Are there any further comments from anyone?

11:45  

Finance and Public Administration Committee

Scottish Fiscal Framework: Value Added Tax Assignment

Meeting date: 14 November 2023

Kenneth Gibson

Thanks very much. There will be no fact-finding visits to Italy, Belgium or Germany. I want to make that clear.

Finance and Public Administration Committee

Scottish Fiscal Framework: Value Added Tax Assignment

Meeting date: 14 November 2023

Kenneth Gibson

I am not hearing an overwhelming endorsement from people around this—I was going to say round table; it is more of a horseshoe, to be honest. Everyone is all bunched together.

Finance and Public Administration Committee

Scottish Fiscal Framework: Value Added Tax Assignment

Meeting date: 14 November 2023

Kenneth Gibson

Yes, I think that there is an element of that. There was a lot of politics in that. I suppose that the Scottish Government felt under a duty to follow the recommendations of the Smith commission and to look at them in detail. It has done that, but how long can you flog a dead horse? That is probably the issue here. There is no enthusiasm certainly for assignment anyway. I do not think that there are many people who are shouting from the rooftops for devolution of VAT either at the present time, unless I am mistaken. No. Does anyone else want to comment on this? It is a nice, cheery session, isn’t it?

It has been a very constructive session because, as has just been said, we have had eight years talking about this and if we, as a finance committee, with the unanimous support of our witnesses and across the political parties, are saying that assignment should no longer be looked at, that is a very strong message that we are sending to the Scottish Government on this.

Unless anyone has any further points that they want to make, I will wind up this quite short round-table session. I had expected it to go on a wee bit longer but, because of the unanimity of views that have been expressed through very detailed and high-quality submissions, I think that we have come to a very strong and unanimous conclusion. Does anyone else have anything to say? Going once—okay.

Thank you very much to everyone for attending and participating in today’s discussion. It has been very useful.

That concludes the public part of our meeting. We will continue to take evidence on the fiscal framework, and we will certainly convey our views to the Scottish Government regarding VAT assignment. We have the Deputy First Minister in next week and no doubt we will put these issues directly to her.

The next item on our agenda, which is a discussion of our work programme, will be taken in private. We will have a wee five-minute break to enable our witnesses and the official report to depart. Thank you.

11:52 Meeting continued in private until 12:27.  

Finance and Public Administration Committee

Scottish Fiscal Framework: Value Added Tax Assignment

Meeting date: 14 November 2023

Kenneth Gibson

That is an issue that Mark Taylor is specifically concerned about as well.

Finance and Public Administration Committee

Scottish Fiscal Framework: Independent Report and Review

Meeting date: 14 November 2023

Kenneth Gibson

Lastly from me before I open it to colleagues, I understand that the figure for fines, forfeitures and fixed penalties is at approximately £30 million at the moment but that there will be a flat deduction of £25 million from the block grant going forward. Is that linked to inflation at all and are those figures accurate? We have two sets of figures—£30 million for this year and £25 million from now on, which seems to be a reduction.

Finance and Public Administration Committee

Scottish Fiscal Framework: Independent Report and Review

Meeting date: 14 November 2023

Kenneth Gibson

I am sure that a future UK Government could easily reopen those negotiations if it wanted to be more generous to Scotland.

Finance and Public Administration Committee

Scottish Fiscal Framework: Independent Report and Review

Meeting date: 14 November 2023

Kenneth Gibson

We have covered all the changes that are mentioned in the summary of changes to the fiscal framework, except one. It is a fairly minor one, but it would be remiss of us not to touch on it. What will happen to the coastal communities fund? What will that mean for Scotland? We understand from the agreement that that fund will be absorbed into Barnett, and that there will be no immediate impact on funding. What are the long-term implications?

11:00