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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 28 December 2025
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Displaying 4060 contributions

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Finance and Public Administration Committee [Draft]

Budget Scrutiny 2026-27 (United Kingdom Context)

Meeting date: 16 December 2025

Kenneth Gibson

Yes—I think that a lot of that is underpinned by the fact that the productivity forecasts have had to be downgraded, given that they have been overoptimistic for some time.

One issue with the UK budget that many commentators have picked up is the fact that there are a lot of little tax increases rather than anything particularly significant. I will touch on one or two of those increases where the implications for Scotland may not have been particularly well highlighted.

The tax on property income and savings income will increase by 2 percentage points at the basic and higher additional rates from April 2027. The UK Government intends to engage with the devolved Governments of Scotland and Wales to provide them with the ability to set property income rates in line with the current income tax powers in the fiscal framework. Will you talk to us about that?

Finance and Public Administration Committee [Draft]

Budget Scrutiny 2026-27 (United Kingdom Context)

Meeting date: 16 December 2025

Kenneth Gibson

Yes, because costs ultimately have to be passed on.

With regard to implementing lower business rates for retail, hospitality and leisure properties, a lot of pressure is on the Scottish Government to follow what has happened down south. What would be the implications for the Scottish budget were the Scottish Government to do so?

Finance and Public Administration Committee [Draft]

Budget Scrutiny 2026-27 (United Kingdom Context)

Meeting date: 16 December 2025

Kenneth Gibson

A lot of that was before the increase in employee national insurance contributions. There was a theory that people were spending more before 1 April, which boosted that quarter’s figures while having an adverse impact on the following quarter. One would think that, over the year, the OBR would have taken those matters into account. Surely, it must have done.

Finance and Public Administration Committee [Draft]

Budget Scrutiny 2026-27 (United Kingdom Context)

Meeting date: 16 December 2025

Kenneth Gibson

Okay. I think that our having figures would be helpful.

Finance and Public Administration Committee [Draft]

Budget Scrutiny 2026-27 (United Kingdom Context)

Meeting date: 16 December 2025

Kenneth Gibson

Okay—we will go straight to questions. We do not have a submission from you either, so we will simply ask a series of questions on the budget.

First, I want to ask about the £820 million of additional funding that the Scottish Government is to receive. That comprises £510 million in resource funding and £310 million in capital funding over five years. One issue with that is that it is very much front loaded. Will you talk us through that? I understand that it ultimately leads to a cut in day-to-day spending in 2028-29.

Finance and Public Administration Committee [Draft]

Budget Scrutiny 2026-27 (United Kingdom Context)

Meeting date: 16 December 2025

Kenneth Gibson

You have not really touched on capital. The capital that is available to the Scottish Government will be much the same in 2029-30 as it was in 2023-24. There is a projected 1.6 per cent decline over the next five years. Given that growth is the UK chancellor’s overall priority, are you concerned about the impact of that decline, given the higher level of inflation capital?

The second point that I want you to respond to is about the overall cost of public procurement in the UK compared to, for example, Europe. Compared with other countries in Europe, the cost from the point of hiring consultants to the point of actual construction seems to be incredibly more expensive for projects that are quite similar. From high speed 2 down south to the A9 in Scotland, the costs seem to be colossal. What is the IFS’s view on these two issues: the capital position and the cost of capital procurement in this country?

Finance and Public Administration Committee [Draft]

Budget Scrutiny 2026-27 (United Kingdom Context)

Meeting date: 16 December 2025

Kenneth Gibson

It is said that a camel is a horse designed by a committee, which is exactly what that tax system seems to be. It is as if a load of people sat down and all managed to add a wee bit into the mix without making it very clear or straightforward, as you have just said.

The Office for Budget Responsibility forecasts real GDP growth of 1.5 per cent across the UK in 2025, but the economy has shrunk in six of the past seven months, so is that forecast realistic?

Finance and Public Administration Committee [Draft]

Budget Scrutiny 2026-27 (United Kingdom Context)

Meeting date: 16 December 2025

Kenneth Gibson

At the start of your response, you said that the UK measure would have an impact on the block grant adjustment. How much of an impact would you estimate that that is likely to have in the forthcoming financial year?

Finance and Public Administration Committee [Draft]

Budget Scrutiny 2026-27 (United Kingdom Context)

Meeting date: 16 December 2025

Kenneth Gibson

Oh, I thought that you were talking about the £200 million change.

Finance and Public Administration Committee [Draft]

Budget Scrutiny 2026-27 (United Kingdom Context)

Meeting date: 16 December 2025

Kenneth Gibson

We now move on to questions from members.