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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 12 September 2025
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Displaying 3573 contributions

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Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 13 December 2022

Kenneth Gibson

It is indeed.

Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 13 December 2022

Kenneth Gibson

What Michelle Thomson has just talked about—fraud, corruption and money laundering—can be called tax evasion, but what about tax avoidance, which is somewhat different? Does the OBR analyse the impact of tax avoidance on the public finances?

Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 13 December 2022

Kenneth Gibson

Is that 5 per cent of total tax income or 5 per cent of GDP?

Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 13 December 2022

Kenneth Gibson

Yes, and people who are on benefits are likely to be hit by fiscal drag, are they not?

Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 13 December 2022

Kenneth Gibson

I think that we are in a more optimistic place in that at least we know what is happening. The OBR’s position has been strengthened by events in recent months, as I am sure that you will agree.

On the UK’s economic and fiscal outlook, you said:

“the medium-term fiscal outlook has materially worsened since our March forecast due to a weaker economy, higher interest rates, and higher inflation”.

You also talk about a number of those areas. For example, you said that rising prices

“erode real wages and reduce living standards by 7% in total over the two financial years to 2023-24 (wiping out the previous eight years’ growth), despite over £100 billion of additional government support.”

Obviously, that 7 per cent fall in living standards will not affect everyone equally. Who does the OBR feel will be most adversely affected by it?

Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 13 December 2022

Kenneth Gibson

I was trying to put a positive spin on what is a depressing situation, as you have pointed out.

I have another couple of points and then I will open the questioning up to colleagues.

The Institute for Public Policy Research has said that there should be

“a root and branch review of the tax system ahead of the 2024-25 Scottish budget to examine reforms to rates and bands, and how local tax raising powers could be used to address wealth inequality in Scotland”.

Do you have a view on that?

Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 13 December 2022

Kenneth Gibson

Thank you. I am pleased to say that our remaining committee colleagues, John Mason and Ross Greer, have now joined us.

Your latest outlook goes on to talk about higher borrowing pushing underlying debt

“sharply, from 84.3% of GDP last year to a 63-year high of 97.6% in 2025-26.”

Of course, your analysis also predicts that gross domestic product will contract by around 2 per cent. You touched on one of the main concerns around debt when you spoke about the impact on householders of mortgage rates going up. In terms of UK debt, however, you say that the

“near tripling of interest rates since March means the shares of revenues consumed by servicing that debt rises from under 5% in 2019-20 to 8.5% in 2027-28, leaving the public finances more vulnerable to future shocks or swings in market sentiment.”

What does that mean in cash terms? The UK economy has more than ÂŁ2.2 trillion in GDP, so what are we talking about as the economy grows after the recession ends? What are we talking about in cash terms? If servicing that debt rises by 8.5 per cent in 2027-28, what will the debt payments be now and in 2028?

Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 13 December 2022

Kenneth Gibson

Ross Greer has a wee supplementary question.

Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 13 December 2022

Kenneth Gibson

How much is the UK forecast to be paying in debt interest in 2027-28?

Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 13 December 2022

Kenneth Gibson

I am thinking about the impact that you think those measures will have on the wider economy, not the amount that is paid in bonuses, which is not necessarily significant in itself. What impact will those measures have on how other people perceive their position when asking for pay increases, and on feeding the view that certain people in society are favoured over others, which makes other people feel that they should get the pay rises that they deserve?