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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 17 August 2025
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Displaying 1535 contributions

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Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 13 December 2022

Ross Greer

Like John Mason, I apologise for having been late this morning. It had nothing to do with buses or trains, either; it was due to a much more mundane issue about my pass and gaining entry to the building.

Convener, may I check something so that I will not be wasting time by duplicating matters? In its initial questions, which I missed, did the committee cover the GDP deflator?

Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 13 December 2022

Ross Greer

Grand.

Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 13 December 2022

Ross Greer

贰虫肠别濒濒别苍迟鈥攖丑补苍办蝉.

My question might be best put to Richard Hughes, in the first instance. I am interested in hearing your thoughts on how appropriate the GDP deflator is as a measure of inflation for Government. At the moment, there is quite a gulf between the 3.7 per cent that it states, on the one hand, and, on the other hand, the consumer price index and retail price index levels, which are into double figures.

In the wider debate on the issue, it seems to be broadly recognised that neither method is quite right for measuring the impact of inflation on a Government, but the GDP deflator is the one that is used officially. I am interested in hearing your thoughts on how appropriate it is in the current financial context.

Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 13 December 2022

Ross Greer

That is great鈥攖hank you. The context for asking that question is that we are all limbering up for another debate on Thursday about whether the Scottish budget has gone up or down in real terms, which depends entirely on how we measure 鈥渞eal鈥.

I have one final question, on the Scottish tax base. Income tax makes up the majority of our devolved tax base. As was just mentioned, the rate of growth in wages is currently far lower than inflation, but wages are certainly set to grow by far less than wealth鈥攊n particular, the wealth of the wealthiest people in our society.

Given that income tax is devolved and makes up the majority of our devolved tax base, and that the lion鈥檚 share of what is left is land and buildings transaction tax and council tax, are Scotland鈥檚 public finances overexposed to short-term shocks in the economy in comparison with UK-wide public finances, which can be supported by a much wider range of taxation measures on wealth or corporate tax, as was mentioned earlier?

Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 13 December 2022

Ross Greer

It is not on that particular point, convener.

Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 13 December 2022

Ross Greer

Thanks very much. Is there a measure that currently lands somewhere between the two, which might be a more appropriate one on which to base assumptions on the impact of Government spending?

Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 13 December 2022

Ross Greer

Thank you鈥攖hat is everything from me.

Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 6 December 2022

Ross Greer

I hope that you do not mind me jumping between a few different areas. First, I will follow John Mason鈥檚 line of questioning around inflation. I am interested in your thoughts on debt interest. It feels as though the era of cheap money is over globally, at least for now. However, the UK went through a particular episode with debt interest rates on the back of the mini budget. What is your expectation of the rates over the next couple of years?

Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 6 December 2022

Ross Greer

I will jump to a completely different area. I take on board what you said earlier about neither of you being an energy policy expert, but are either of you aware of any work being done on the impact of windfall tax loopholes? I think that Shell was the company that most recently reported that it has managed to avoid paying any windfall tax. That was as a result of its North Sea exploration activities giving it sufficient relief from the tax. Are you aware of any work being done to identify whether that loophole creates an incentive for companies to pursue exploration that they had not planned before the introduction of the windfall tax?

Finance and Public Administration Committee

Budget Scrutiny 2023-24 (United Kingdom Context)

Meeting date: 6 December 2022

Ross Greer

Those were really interesting points, so I appreciate your circling back to my previous question.

My final question is on a different area. When lowering the threshold for the top rate of income tax has been considered in the past in Scotland鈥攔ecent tax papers by the Scottish Trades Union Congress and the Institute for Public Policy Research have included proposals in that area鈥攖he counterargument has been that that would result in significant behaviour change and would not raise additional revenue.

Part of the argument is that a Scotland-specific reduction in the threshold could result in people on higher incomes simply moving elsewhere in the UK to avoid paying the additional rate. If the Scottish Government follows the UK Government鈥檚 lead in reducing the threshold to 拢125,000, that behaviour change element will be eliminated, although there will still be the prospect of people converting their income into other forms to avoid paying income tax.

Do you expect tax avoidance-related behaviour to change in that regard? I have to say that I have never found the argument to be massively credible, but I am interested in your thoughts on it.