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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

Mr Hughes, I am going to quote a lot from your report—everything that I am going to say, more or less, is a quotation from your report. Right at the start, on page 7 of your report, you say that, from the recent budget,

“Budget policies leave the level of output broadly unchanged at the forecast horizon.”

You go on to say that

“Real household disposable income ... per person, a measure of living standards, grows by an average of just over ½ a per cent a year over the forecast”

and that

“Compared to our March forecast, the level ... per person is just over 2 per cent higher at the start of the forecast due to data revisions, but 1¼ per cent lower by the start of 2029. The bulk of this difference (around 85 per cent) is explained by policies announced in this Budget.”

Is it your view that Scotland will follow the same trajectory? Why do you feel that a lot of the budget detail that you have analysed seems to be on the same theme, with a lot of it being front loaded and with a reduction in growth and investment over the piece? Will you talk us through that particular issue in terms of disposable income?

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

Okay. You have said:

“In nominal terms, debt interest spending falls to £104.9 billion this year but then increases year-on-year to £122.2 billion in 2029-30”

which is a £12.6 billion revision since March. Can you talk us through that?

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

You are basically saying that the UK Government will have an envelope for pay, and it will say that it can be met either by increased pay, which might mean a reduction in numbers, or with lower pay but maintaining the numbers.

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

I have to say that your outlook report does not read in a particularly optimistic way where you say, on page 53, that

“This results in an average annual tax increase in excess of £800 per employee”

and, on page 35, that

“Real private consumption is forecast to fall 0.4 percentage points as a share of GDP from 2023 to 2029. In our pre-measures forecast, we expected this share to rise by 0.4 percentage point but this is more than offset by policy measures in the Budget.”

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

On the issue of outturn data for income tax, which is mentioned in your report, if there was an improvement in the data, would you like the timescale to be somewhat truncated, or is that unlikely due to the way in which the system is set up?

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

You are wasted in this job: you should be in diplomacy. Somehow, I had the feeling that you would talk about the timing of the forecasts. Anyway, it was worth a try, wasn’t it?

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

You have said that the probability of the target for the updated fiscal mandate being met is 54 per cent, which is a bit worrying, is it not?

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

So, there is 0.3 per cent wriggle room. You say on page 158:

“The net impact of the policies announced at this Budget is to reduce real business investment in the near term by 1.8 per cent, or a cumulative £25 billion by the forecast horizon.”

You go on to say:

“If the tax-to-GDP ratio were to remain at its 2024-25 level, tax revenues would be £62.2 billion lower in 2029-30”

than you currently predict.

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

On page 83, you say:

“In the downside scenario, public and private capital are substitutes so every additional £1 of public investment reduces business investment by £0.50.”

You go on to say that

“the increase in public investment leaves GDP only 0.6 per cent higher in 50 years”.

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

Thank you for your evidence today. It is very much appreciated. Before we wind up, are there any further points that the OBR would like to make to the committee?