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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 5 May 2021
  6. Current session: 12 May 2021 to 8 June 2025
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Displaying 3368 contributions

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Finance and Public Administration Committee

Scottish Fiscal Framework: Value Added Tax Assignment

Meeting date: 14 November 2023

Kenneth Gibson

Charlotte Barbour, you have said that

“VAT is the only ‘assigned’ tax in the package of taxes that fund Scotland”,

that the UK Government would retain

“full legislative and administrative responsibility”,

and that

“The aim of VAT assignment is to bring greater accountability to decision making in Scotland. However, the Scottish Government will have no direct controls over VAT rates and policy.”

That goes back to what you were saying initially.

Finance and Public Administration Committee

Scottish Fiscal Framework: Value Added Tax Assignment

Meeting date: 14 November 2023

Kenneth Gibson

Yes. For example—and, John Ireland, I do not know how you would feel about this—HMRC said that its survey would be 2.3 per cent plus or minus at a 95 per cent confidence interval. It would be looking for just a ballpark prediction, but we have seen the revisions that I mentioned earlier—9.81 per cent out in the current year, which is the highest for over a decade. It almost seems as if volatility has increased rather than decreased as it has progressed with looking at this. How would you feel about that? I know that 2020 was an outlier; I appreciate that.

Finance and Public Administration Committee

Scottish Fiscal Framework: Independent Report and Review

Meeting date: 14 November 2023

Kenneth Gibson

Lastly from me before I open it to colleagues, I understand that the figure for fines, forfeitures and fixed penalties is at approximately £30 million at the moment but that there will be a flat deduction of £25 million from the block grant going forward. Is that linked to inflation at all and are those figures accurate? We have two sets of figures—£30 million for this year and £25 million from now on, which seems to be a reduction.

Finance and Public Administration Committee

Scottish Fiscal Framework: Independent Report and Review

Meeting date: 14 November 2023

Kenneth Gibson

I am sure that a future UK Government could easily reopen those negotiations if it wanted to be more generous to Scotland.

Finance and Public Administration Committee

Scottish Fiscal Framework: Independent Report and Review

Meeting date: 14 November 2023

Kenneth Gibson

We have covered all the changes that are mentioned in the summary of changes to the fiscal framework, except one. It is a fairly minor one, but it would be remiss of us not to touch on it. What will happen to the coastal communities fund? What will that mean for Scotland? We understand from the agreement that that fund will be absorbed into Barnett, and that there will be no immediate impact on funding. What are the long-term implications?

11:00  

Finance and Public Administration Committee

Scottish Fiscal Framework: Independent Report and Review

Meeting date: 14 November 2023

Kenneth Gibson

On that positive note, we will end the session. I thank our witnesses—both of whom will be involved in the next session—very much for their contributions. I will call a wee break until five past 11 so that our new witnesses can be brought in.

11:01 Meeting suspended.  

11:07 On resuming—  

Finance and Public Administration Committee

Scottish Fiscal Framework: Value Added Tax Assignment

Meeting date: 14 November 2023

Kenneth Gibson

As a result, assignment was the only way in which VAT could be considered.

Finance and Public Administration Committee

Scottish Fiscal Framework: Value Added Tax Assignment

Meeting date: 14 November 2023

Kenneth Gibson

One of the things that you have suggested in your paper is a sales tax rather than VAT. Can you talk to us about that?

Finance and Public Administration Committee

Scottish Fiscal Framework: Value Added Tax Assignment

Meeting date: 14 November 2023

Kenneth Gibson

We have four political parties represented around this table as well as five experts on this issue. Who thinks that assignment of VAT is a really great idea at this time? [Laughter.] I thought that John Ireland was about to come in there heroically. You should remember that this is like an auction—if anyone twitches, they will be called to speak. David Phillips had his finger on the button of his microphone at one point, but he desisted.

We seem more or less in agreement that this presents considerable difficulties across the board, whether from a forecasting point of view, a practical point of view or an audit perspective. Does anyone see any real benefits to this approach or any way in which we could eventually reach a benefit? Is there any perfect way of getting to that point, or will this always be a bureaucratic and costly distraction that will not add any benefit to Scotland? Does anyone want to contribute for or against that?

Finance and Public Administration Committee

Scottish Fiscal Framework: Value Added Tax Assignment

Meeting date: 14 November 2023

Kenneth Gibson

But was it not the case that devolution was not considered, because we were part of the European Union then and it was not permitted to devolve such things to sub-state legislatures?