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Let me avoid the figures altogether. If the aggregate point is going to come out at 29,500 and some areas are not going to have to return to pre-Covid levels, other areas will have to go further. Is that a statement of fact?

Even if we consider spend on employability, it is really only in the past year that that has gone up by any significant amount. Therefore, you have four budget lines which—certainly in the early years—will all probably experience significant real terms cuts. Almost certainly, on aggregate across the five years, skills spending will have an aggregate cut. If you want to drive up average earnings, is that not inconsistent?

I understood that, but it is a useful clarification. I guess that the danger is that you fall into the trap of thinking that we have always had the extra consequentials and expecting to have them again in future. I take that point.

On the difference between the OBR growth forecast and the forecast growth in Scotland, I want to unpack what is contained in your forecast. We have had a change. I understand the points about holding the thresholds rather than inflating them, and about the decision at UK level to have a 19p basic rate in future years. However, if we strip those out, it appears that, since December, the commission’s forecast for earnings growth in Scotland has deteriorated. Certainly, it is clear that earnings growth in Scotland is slower than that in the rest of the UK. Can you provide any insight into what changes have occurred since December and what the likely consequences are?

Following directly on from the point about future Barnett consequentials, are you confident that the Government’s approach is sufficiently robust? It sounds almost as though it is being too granular and that there is therefore quite a large contingency in those forecast consequentials in future years. Is that the position that the commission has taken or the fear that the commission has?

I am merely trying to clarify the choices that you have made, and this is clearly one of them.

Just to clarify, my assumption was drawn from figure 3.17, where the teal line, which is your latest forecast, is significantly lower between 2021-22 and 2023-24 than the yellow line, which is your December forecast.

We all understand the underlying issues with oil and gas in the north-east. Your December forecast included quite a detailed regional breakdown that showed that that trend was also apparent in the south-east of Scotland, a place that we might have expected not to be in the same situation and which we might have expected would benefit from some of the same things that have benefited the south-east of England, such as the financial services industry. Has the Fiscal Commission carried out regional analysis and what does it show? Why are all the regions in Scotland suffering that lag, which seems to be more pervasive than in just the north-east?

Earnings growth and employment growth are fundamentally underpinned by growth in productivity. Figure 3.13 shows a downward trend in productivity growth since 2010. You state quite starkly in paragraph 3.39 that

“productivity growth has stalled in Scotland since 2015.”

I assume that that is largely tied to falling levels of investment in oil and gas. More fundamentally, you seem to imply that there is an inflection point in this financial year when we will start to see productivity growing again in Scotland. What lies behind that assumption? That almost gives us a hockey stick. I am always slightly concerned when I see such things in forecasts rather than in retrospect.

I have one final question, which relates back to a question that the convener asked and to your answer about what is likely to happen with inflation in future years. The convener made a comparison to the late 1970s and early 1980s. Am I right to infer that the fundamental difference is that we have a much more globalised economy, such that the spend on items that are rising in cost is not being cycled back round our economy but is going to other parts of the world, whereas, back then, in a much more isolated economy, it would have fed back round and provided headroom for earnings to grow? Is it the case that those revenues going elsewhere in the world, particularly to China, will dampen inflationary impacts, or am I doing too much amateur economic theorising?

I want to go back to the public sector head count. The aim is to return it to pre-Covid levels, and I accept and understand that you say that that will be done essentially through capping the total payroll at value, but not in terms of levels.

However, there will be a certain arithmetical outcome from that. As John Mason pointed out, half of the 30,000 staff are in the NHS, but its workforce will not be reduced. Therefore, in the remaining areas, there are two options: reducing people’s pay or reducing the head count. If you maintain the NHS head count at what it is, and that is half of the total number, that means that the other areas will need to reduce their head count by double the amount that they have increased it by. I just want to highlight that. From quarter 4 of 2019-20 to quarter 4 of 2020-21, there was an increase of 4,000 posts in the civil service, 7,000 in local government and 5,000 in public corporations. You refuse to be drawn on local government, but you do have control of the civil service head count. Will we see a reduction of 8,000 civil servants in the Scottish Government?

Thank you. One area that you disputed at your statement last week was the overall position on productivity growth and wage growth in Scotland. The Scottish Fiscal Commission is clear; in paragraph 3.39 of its report, it states that

“Productivity growth has stalled in Scotland since 2015.”

Likewise, on its projections of income tax receipts, the Scottish Fiscal Commission is clear that wage growth in Scotland is slower than the UK average. That is a trend that goes back to 2016 according to ONS figures; not a single Scottish region outperformed the UK average in that period.

Prior to 2016, Scotland typically outperformed the UK average. I am not talking about the higher performing areas of the UK, but the UK average. Do you accept that that is a fact, and is there sufficient focus on driving up jobs and wages? Ultimately, that is what we need to do to increase the amount of money that we have to spend on public services, and because it is a good in and of itself.