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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 5 May 2021
  6. Current session: 12 May 2021 to 23 June 2025
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Displaying 3510 contributions

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Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

I almost want to start singing that line from the wonderful Monty Python film.

This morning, the embryonic Trump regime said that Mexico, Canada and China will be the target of its tariffs.

To round off our discussion, I have a couple of questions, one of which is about economic inactivity, on which you had an interesting dialogue with Craig Hoy. The rate of economic activity is 26.3 per cent in Scotland and 25.2 per cent in the UK as a whole, so there is a 1.1 per cent difference. Have you looked to see where that difference arises?

The SFC has mentioned the fact that people forget that students are included in the economic activity rates. In Scotland, people do a four-year university degree, whereas, in England, they do a three-year university degree. If 40-odd per cent of Scottish young people go to university and their working life is reduced from, say, 45 years to 44 years, that is included in the economic inactivity rates when, in fact, one could argue that those university students are training for economic activity. Have you broken that down? The big issue that everyone is concerned about is people who are on long-term sickness and incapacity. Do you have a breakdown of the figures in relation to where the balance lies?

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

They used to call it “shovel ready”.

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

Whereas, traditionally, the Scottish Government will increase numbers and pay beyond that envelope.

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

I am sure that the SFC will be relieved that there will be no hostile takeover from the OBR. [Laughter.]

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

You have said:

“In 2026 and 2027, we expect households to run down their rate of saving significantly as they try to maintain consumption growth in the face of stagnant real wages.”

You talk about a “direct behavioural response” to taxation, in that it will increase

“the incentive for more tax-motivated incorporations”.

You estimate that those will

“increase by a cumulative 17,000 by 2029-30”

as a result of the budget, and you say that

“These combined effects reduce the yield by”

ÂŁ700 million by 2029-30. How do you come to that estimation of tax-motivated incorporations? That is also an issue of great concern in Scotland due to the different tax rates that we have here.

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

That is why I am asking you—I couldnae find it in the document.

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

Good morning, and welcome to the 33rd meeting in 2024 of the Finance and Public Administration Committee. The first item on our agenda is an evidence session with representatives from the Office for Budget Responsibility on the UK “Economic and fiscal outlook”, which will inform our scrutiny of the 2025-26 Scottish budget. I am delighted that we are joined in person by Richard Hughes, who is the chair of the OBR, and by Professor David Miles CBE and Tom Josephs, who are both members of the OBR’s budget responsibility committee. I thank you all for taking the time and the trouble to come all the way up here—it is very much appreciated—and I welcome you all to the meeting.

I invite Mr Hughes to make a short opening statement.

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

Thank you very much for that. In time-honoured fashion, I will start with some questions, then pass over to colleagues around the table.

In your “Devolved tax and spending forecasts” document, which you produced to go with your magnificent 207-page tome on the budget, an element of frustration seems to come through. You say:

“we lack sufficiently detailed or timely data that is required to produce forecasts for Scotland”,

so the OBR needs to do a lot of extrapolation. What additional data could be provided to help you to make your forecasts more accurate? I am well aware that we have the Scottish Fiscal Commission, and I will ask a question about it in a minute or two.

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

Interestingly, your forecasts appear to be more optimistic than those of the SFC. Historically, how accurate have your predictions been, compared with those of the SFC? Are yours more accurate or less accurate, or are they more or less on the nose, give or take?

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

Indeed—I appreciate that.