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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 4 May 2021
  6. Current session: 13 May 2021 to 10 November 2025
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Displaying 3846 contributions

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Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 3 December 2024

Kenneth Gibson

What will be the impact of that on the Scottish budget next year?

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 3 December 2024

Kenneth Gibson

Good morning, and welcome to the 34th meeting in 2024 of the Finance and Public Administration Committee. The only item on our agenda is an evidence session with the Institute for Fiscal Studies on the UK “Economic and fiscal outlook”, which will inform our scrutiny of the 2025-26 Scottish budget. We are joined remotely by David Phillips and Ben Zaranko, who are associate directors at the Institute for Fiscal Studies. I welcome them to the meeting.

We will move straight to questions. I think that we all know what it is but, for the record, will you give a brief explanation of the acronym SCAPE, which you use throughout your analysis of the Scottish budget? My understanding is that it stands for superannuation contributions adjusted for past experience—nae wonder you use the acronym—but will you explain exactly what that means?

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 3 December 2024

Kenneth Gibson

Digging deeper into your analysis, you say:

“the Scottish Government looks set to continue to face tough trade-offs in future years. Carrying forward funding would ease trade-offs between services next year. But such funding can only be used once: it will only help the budgetary pressures facing the Scottish Government in later years if it is successfully utilised to help boost productivity, address the rivers of service demand, or boost economic performance and hence tax revenue.”

You go on to say:

“even if successful, such efforts may take several years to bear fruit, meaning that without further top-ups to UK spending plans or increases in Scottish taxes, some services will likely face cuts in future years.”

That is a wee bit more pessimistic than other commentators have suggested.

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

Okay. You have said:

“In nominal terms, debt interest spending falls to £104.9 billion this year but then increases year-on-year to £122.2 billion in 2029-30”

which is a £12.6 billion revision since March. Can you talk us through that?

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

You are basically saying that the UK Government will have an envelope for pay, and it will say that it can be met either by increased pay, which might mean a reduction in numbers, or with lower pay but maintaining the numbers.

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

I have to say that your outlook report does not read in a particularly optimistic way where you say, on page 53, that

“This results in an average annual tax increase in excess of £800 per employee”

and, on page 35, that

“Real private consumption is forecast to fall 0.4 percentage points as a share of GDP from 2023 to 2029. In our pre-measures forecast, we expected this share to rise by 0.4 percentage point but this is more than offset by policy measures in the Budget.”

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

On the issue of outturn data for income tax, which is mentioned in your report, if there was an improvement in the data, would you like the timescale to be somewhat truncated, or is that unlikely due to the way in which the system is set up?

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

You are wasted in this job: you should be in diplomacy. Somehow, I had the feeling that you would talk about the timing of the forecasts. Anyway, it was worth a try, wasn’t it?

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

You have said that the probability of the target for the updated fiscal mandate being met is 54 per cent, which is a bit worrying, is it not?

Finance and Public Administration Committee

Budget Scrutiny 2025-26 (United Kingdom Context)

Meeting date: 26 November 2024

Kenneth Gibson

So, there is 0.3 per cent wriggle room. You say on page 158:

“The net impact of the policies announced at this Budget is to reduce real business investment in the near term by 1.8 per cent, or a cumulative £25 billion by the forecast horizon.”

You go on to say:

“If the tax-to-GDP ratio were to remain at its 2024-25 level, tax revenues would be £62.2 billion lower in 2029-30”

than you currently predict.