³ÉÈË¿ìÊÖ

Let us bear those points in mind, with what Sir Charlie Bean said earlier, and step back a little bit. We are in a situation that is not panning out as predicted. We see significant labour market frictions and significant differential frictions between different sectors in the economy. It strikes me that, in that situation, making predictions on future earnings becomes a lot more difficult, because you need to forecast almost on a microeconomic rather than a macroeconomic basis what will happen in each individual sector. Is that a fair summary? What is the OBR doing to look at how we can drill into specific issues in specific sectors and extrapolate for the wider economic outlook?

I have a final question, following on from our discussion about labour markets, but taking a longer view.

The last two years have been a brutal shock, exposing our reliance on imported labour to make up gaps and, indeed, do certain tasks that the UK population does not want to do—essentially, low-wage, low-skill jobs.

In the longer run, global population growth, which was around 2 per cent in the 1970s and has fallen to about 1 per cent now, is projected to fall further to about 0.5 per cent in the middle of this century and come to some sort of equilibrium by the end of the century. It strikes me that any sort of model that relies on us continuing to import labour is flawed, regardless of the other things that have happened. Do you share that assumption? If so, does there need to be more focus on increasing the productive capacity of the existing population, because the economy will require working-age people to be more productive, whether by means of skills or automation? Does public policy need to be more focused on that issue?

What is the view of the IFS of the comprehensive spending review in relation to Scotland? My understanding is that we will see a 7.7 per cent increase in real terms, but that is front-loaded in the first year, and there are actually small real-terms decreases. That increase of 7.7 per cent is a historically high increase in the block grant. However, I think that that profile leads to some challenges in terms of what it means over those three years. Is that a fair characterisation? Does the IFS have any insights in terms of the decisions that the Scottish Government must make?

If you had both come up with exactly the same answer we would be asking much tougher questions.

If I remember the election period correctly, the IFS was very fair in that it was equally withering about all the manifestos, which was good of you.

In the previous evidence session, we were looking specifically at the nature of the rise in income tax receipts, noting that Scotland was not seeing such big increases and that we were seeing big differentials between sectors, which brings challenges. Is there sufficient public policy focus on how we plug gaps in particular labour markets or address those differentials? That seems to be a new challenge, and one that is more challenging because of Brexit, but it does not seem to be getting the focus in terms of public policy that it deserves, north or south of the border.

Deputy First Minister, you have always struck me as someone who is frustrated with the pace of change. In your opening remarks, I think that you were hinting at something when you said that we should reflect on the fact that many of the things in Christie had not become as embedded, either institutionally or in policy terms, as we would have liked. Let me be expansive and ask you this question: if the 2007 John Swinney were able to travel here from the past, would he be pleased with what has happened or would he be frustrated with the lack of institutional change? Equally, if the 2021 John Swinney could provide that John Swinney with advice, what would it be?

I know that the convener wants to come in, but I have one more question.

I am tempted to ask you the same question in private and see what response I get.

I recognise your point that compartmentalisation is an issue, and part of it is about putting the right levers in the right places and ensuring that things are not split up. With that in mind, do we need a more fundamental reappraisal of what is under the control of local government? Douglas Lumsden alluded to the local governance review, which is about how local government engages with people and makes decisions, rather than what it actually does. You gave the example of the library, the sports centre, the primary school and the health centre all being in one place, and one of the best ways to make such things happen more often is to make sure that the decisions are all made in one place, rather than being split apart.

In line with my previous question, I will ask my next question in a slightly more impudent way. Why do we treat Douglas Lumsden’s and Liz Smith’s colleagues from 1994 with such respect and assume that Mr Lang’s local government reforms were perfectly formed and should remain unaltered by your Government—or, frankly, by the Labour Government? Should we not be asking much more fundamental questions? Is the solution not to push as much decision making as possible down to the local level and to give local government the powers that it needs to make those decisions properly?

I should have asked a bridging question, because there is an interesting point about the natural level in areas such as education and health, and whether it is the same.

Okay. I will challenge you on one point, Deputy First Minister. In response to Liz Smith—and you alluded to a similar point in your response to Ross Greer—you spoke about whether being accountable to ministers was a sufficient level of accountability for organisations, whether they are health boards or NDPBs. I would challenge you on whether accountability to ministers is the same as public accountability. With public accountability, there is an intermediary. We can hold ministers to account in Parliament, but we cannot hold health boards directly accountable. There is a difference there, and in some ways that is a frustration in our democracy.