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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 22 August 2025
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Displaying 1222 contributions

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Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 21 December 2021

Liz Smith

Good morning. Cabinet secretary, I know that you are keen that we stick to the facts that are contained within the Scottish Fiscal Commission forecast, which informed your budget, and I will try very hard to do so. Just before I come to questions about some of the Scottish Fiscal Commission鈥檚 comments, I turn to page 104 of the Scottish Government consolidated accounts for 2020-21, which shows an underspend of 拢580 million, broken down across portfolios. Some portfolios have an overspend but some have a very considerable underspend, including big portfolios such as health and sport and transport and infrastructure. Can you be clear about why that underspend exists and what informed the choices when it came to overspend and underspend?

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 21 December 2021

Liz Smith

This is my final question. The CBI-KPMG report is pretty blunt in certain areas. It flags up that we have huge educational potential and that the skills agenda has potential in terms of green jobs, and all that is good news. However, when it comes to the traffic light鈥攔ed, amber or green鈥攐n how we compare with other parts of the UK in terms of what our short-term and long-term bases are, there are some really worrying statistics about our weakness in business investment, exports and in-work training. I suggest, cabinet secretary, that those are related to issues in the structure of the Scottish economy. Can you say a bit more about how you intend to deal with those concerns?

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Liz Smith

I will follow on from that point. If we assume that the main challenge is to address the problem of proportionately declining tax revenues, am I right in thinking that you both suggest that the policies that are required to deal with that challenge are not only fairly straightforward fiscal policies, such as increasing tax or changing thresholds, but policies that will address some of the structural problems in the Scottish economy?

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Liz Smith

Would it be fair to say that, given the transition to net zero and the prediction that the oil and gas industries will diminish further, the result will be on-going issues for the tax take. Is that your prediction?

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Liz Smith

As you say, it is maybe an issue for the cabinet secretary in due course.

I will ask about what you said regarding the oil and gas situation. You said that it was one of the big factors affecting matters. To what extent to do you think that the decline in the oil and gas sector is having one of the biggest effects on reducing the tax take?

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Liz Smith

I asked the question largely because one of the difficulties that has been flagged up, in this meeting as well as previously, is that we have an ageing population, so the working population鈥攚hich obviously pays the tax鈥攊s shrinking as a proportion of the overall population.

That cannot be changed overnight, which leads to the question of whether there are other policies that we can put in place to try to compensate for what is predicted. Both of you, as well as the witnesses from the Fiscal Commission, have said that the outlook is not great. Which policies will give us the best chance of addressing our difficulties and potential deficits? That is the main question. I will ask the cabinet secretary that question, too, but I am interested in what you think the evidence shows.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Liz Smith

Professor Roy, you made some extremely interesting points about productivity and said that Scotland does very well in some cases and not very well in others. How does that relate to our concerns about employment trends in the Scottish economy? Do we have to use employment policies more to try to get us around some of the difficult structural issues?

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Liz Smith

Thank you.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Liz Smith

Notwithstanding what you said about the big factors, is it not the case that those effects have considerable implications for the amount of tax take that comes to Scotland and that, therefore, when a Government decides on its tax policy, the projections that you are giving about revenues in relation to the factors that you just mentioned are extremely important?

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Liz Smith

That leads into my final question, which is about the participation rates and the changing demography in the labour market. There are concerns, particularly in relation to the number of young people, who perhaps have more transferable skills for the future, coming into the market. To what extent do you feel that those are significant issues with regard to projections for the future?