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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 19 December 2025
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Displaying 4037 contributions

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Finance and Public Administration Committee

Scottish Fiscal Commission (Publications)

Meeting date: 5 September 2023

Kenneth Gibson

Right—so, the revenue from that group is not decreasing. I asked the question because there seems to be a contradiction between what is said on page 19 and what is said on page 46. One talks about—

Finance and Public Administration Committee

Scottish Fiscal Commission (Publications)

Meeting date: 5 September 2023

Kenneth Gibson

I touch on that issue because about one sixth of income tax comes from 0.7 per cent of taxpayers. Throughout the document, you make a point of talking about the volatility of that specific group. I therefore think that we have to keep an eye on that issue.

Another point that comes through quite strongly in the report on a number of occasions relates to self-assessment. Looking at the graph on page 21, I was quite astonished at the jump in the outturn figures for self-assessment—they far exceed any others. Can you, for the record, explain that a wee bit?

Finance and Public Administration Committee

Scottish Fiscal Commission (Publications)

Meeting date: 5 September 2023

Kenneth Gibson

There is just one more question from me, and then I will open up to colleagues round the table. In paragraphs 8 and 9 of annexe B to your report, you say that

“Scotland’s lagging earnings growth since 2016-17 has been exacerbated by much stronger earnings growth in the financial services sector in London and the South East”,

and that

“Scottish employment linked to activity in the North Sea has ... fallen, lowering the average participation rate in Scotland. These jobs ... were generally high paying, which has likely contributed to the divergence in average earnings between Scotland and the UK.”

What kind of pace are we talking about? What decline in overall earnings is coming from that sector, relative to the rest of Scotland? Obviously, that is fundamental—including for the green transition process that we are trying to undergo.

Finance and Public Administration Committee

Scottish Fiscal Commission (Publications)

Meeting date: 5 September 2023

Kenneth Gibson

Given that we are coming out of a pandemic and that we have the Ukraine war, the cost of living crisis and high inflation, a GDP forecast error of 0.2 per cent is remarkable. I know that there have been one or two areas in which the figure has been quite high, but the Scottish Fiscal Commission has still done an excellent job.

I open up the meeting to colleagues.

Finance and Public Administration Committee

Interests

Meeting date: 5 September 2023

Kenneth Gibson

Good morning, and welcome to the 21st meeting in 2023 of the Finance and Public Administration Committee. I hope that everyone has had a good summer recess.

We have received apologies from Michelle Thomson.

Before we start, I thank those who participated so actively in our pre-budget scrutiny event last week in Largs and on the following day in West Kilbride. I know that members had lively and interesting discussions with local people, organisations and businesses about their priorities for the Scottish budget, which will help us with our pre-budget scrutiny. We will publish a summary of the discussions on our website in due course.

I record our thanks to Douglas Lumsden for all his hard work in supporting the committee’s scrutiny. I am pleased to welcome Jamie Halcro Johnston as a new member of the committee. We are also joined by Gordon MacDonald, who attends the meeting as a substitute member in Michelle Thomson’s absence.

I invite first Jamie, and then Gordon, to declare any relevant interests.

Finance and Public Administration Committee

Scottish Fiscal Commission (Publications)

Meeting date: 5 September 2023

Kenneth Gibson

You say in paragraph 26 in annex A of the report:

“The variation in tax revenue generated by the highest earners is likely to continue to be a source of significant uncertainty and forecast error, with very limited data available on this group. In the future, HMRC’s MTD project may improve the situation.”

You then say:

“To continue to improve our forecasts, we will focus on better understanding what determines changes in tax revenues of the highest earners.”

That brings us back to page 3, where you mention “points for improvement”. I take it that that is one of the areas that you are talking about in that respect. What specifically will you be able to do, given the paucity of data with which to improve forecasting in this volatile area?

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 5 September 2023

Kenneth Gibson

Business might move but, with less than 4 per cent unemployment in Scotland, why would workers move to an area if their wages were to go lower? Would they not just get a job somewhere else? Surely, 75,000 people will not move into those zones to get lower wages. It is not really credible that people will move to accept lower wages in an economy where there already are chronic labour and skills shortages, is it?

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 5 September 2023

Kenneth Gibson

That assumes 100 per cent displacement, however, and I thought that the whole point of the green ports was to create new, additional jobs.

Finance and Public Administration Committee

Scottish Fiscal Commission (Publications)

Meeting date: 5 September 2023

Kenneth Gibson

A quick wee calculation off the top of my head tells me that, if there are 18,000 top-rate taxpayers, they each pay an average of just under £140,000 a year. That is a very interesting section of the tax-paying public indeed.

Finance and Public Administration Committee

Scottish Fiscal Commission (Publications)

Meeting date: 5 September 2023

Kenneth Gibson

I think that about 12,000 more people are employed in the sector. However, the productivity outcome is not something that we looked at when we were doing post-legislative scrutiny in this area a year or so ago.