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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 8 August 2025
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Displaying 875 contributions

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Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 21 December 2021

Daniel Johnson

Forgive me, but, in a sense, that response just continued the description of the problem rather than providing analysis.

If we look at figure 3.19 in the SFC’s report—this is directed more at the cabinet secretary than at Lucy O’Carroll—we see the particular problem in north-eastern Scotland. That is understandable, given the situation in the oil and gas industry. However, the issue is that no Scottish region performs better than the UK average. Indeed, no Scottish region performs better than Wales or Northern Ireland, which are devolved Administrations. Given that we have the levers, one would hope that Scotland as a whole would perform better than the UK average. At the very least, one would hope that some Scottish regions would do that, but they do not. Indeed, many of the regions that I have identified have exactly the same demographic problems and precisely the same issues with the legacy of deindustrialisation as Scotland has.

What is the analysis? Why is Scotland lagging behind? More important, why is every Scottish region lagging behind the UK average and the other devolved nations? Is that not a critical question that the Scottish Government must have a handle on?

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 21 December 2021

Daniel Johnson

I have one additional suggestion. It is 2021, but the shop sells no items online. I gently suggest that that opportunity should not be overlooked. Likewise, if you were to find an MSP who had particular expertise in retail, you might want to ask them whether they could provide any observations.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 21 December 2021

Daniel Johnson

Absolutely. I speak out of a sense of public duty.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Daniel Johnson

One of the explanations is to do with relative performance of the financial services sector in the rest of the UK compared with that in Scotland. My understanding has always been that we have a strong financial services sector in Scotland. Why would the financial services sector in Scotland be underperforming that in the rest of the UK?

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Daniel Johnson

“Doldrums” might not be a technical economic term, but it is a good descriptive one.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Daniel Johnson

I think that that is relatively straightforward. We see the increase and we know what the consequentials are when it comes to health. However, if we are saying that there is, in essence, a 7 per cent cut, and we still have all that Covid cost, which extends beyond health, then there is £1 billion to £2 billion to be found in other budget lines, which is legacy Covid spend, but it is not clear where that is.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Daniel Johnson

Do you agree with that, David Eiser? Of course, the other question is whether I am looking at the right numbers here.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Daniel Johnson

My final question is about the really interesting points that Graeme Roy made about Scotland’s relative economic performance. In a sense, that is what is driving all of this, and according to the oversimplified rules of thumb in my head, I have always assumed that Scotland will do a little bit less well than London and the south-east but better than pretty much the rest of the UK. However, the analysis suggests that that is not correct any more and that we are actually trailing most of the rest of the UK.

I have also always assumed that Scotland is not that different from certain other parts of the UK, whether it be the south-west in some ways and the north-east in others. What is so particular about Scotland with regard to lower participation and slower income-tax growth?

Professor Roy, you also made an interesting point about our companies being less productive, but what is driving that? You suggested that we have not been as good at adopting technology and so on, and I wonder whether you can go into that in a bit more detail, as I find it really interesting.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Daniel Johnson

A challenge, then.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Daniel Johnson

Before I ask about regional comparisons across the UK, I wonder whether we can get some extrapolations with regard to the implications for the funding envelope in the medium term. What took most people by surprise was that the net tax position reduced available funding by £190 million instead of adding to the funds, and a deeper look at your report suggests that the issues that that has caused the Scottish budget are only going to increase.

What are you actually saying the implication will be? According to figures 2.1, 2.3 and 2.4 in chapter 2 of the report, you seem to be saying that the block grant is essentially going to stay flat over the next five years and that, by 2026-27, there will be a negative net tax position of -£355 million and—critically—new social security spend and other additional spending will have resulted in a negative position of -£764 million. Is the implication that, in the next five years, £1.119 billion will have to be found in the Scottish budget to cover that? Is that the correct analysis of the trends with regard to the block grant, the net tax position and social security spend?