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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 16 June 2025
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Displaying 1189 contributions

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Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Liz Smith

I am thinking about two things in particular. It is quite clear that there are people who are able to work but are perhaps not able or willing to work in certain jobs. That is why the vacancy rate has stayed higher than we might have expected at a time when unemployment was supposed to rise. There is a skills mismatch, and we might need policies to address that.

Do we also need education policies that allow younger people in particular to get a wider range of skills, so that they are more flexible in the jobs that they can do? We have seen increasing flexibility over the years, but do we have sufficient flexibility to fill some of the gaps?

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Liz Smith

You could end up as a politician.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Liz Smith

I thank the witnesses for giving us a bit more information about the trends.

You have been predicting a fall in income tax receipts; I want to ask, first, about data. Economists talk about the Laffer curve. The Laffer curve has been a bone of contention politically, but it is important, because it is the relationship between the tax rate and the revenues that are actually collected. In your updated data, do you have information about taxable income elasticity—in other words, the change in taxable income in response to changes in the rate of taxation? The issue is obviously important for policy; do we have good data on it?

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Liz Smith

My final point—

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Liz Smith

Thank you for that—

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Liz Smith

I asked the question largely because one of the difficulties that has been flagged up, in this meeting as well as previously, is that we have an ageing population, so the working population—which obviously pays the tax—is shrinking as a proportion of the overall population.

That cannot be changed overnight, which leads to the question of whether there are other policies that we can put in place to try to compensate for what is predicted. Both of you, as well as the witnesses from the Fiscal Commission, have said that the outlook is not great. Which policies will give us the best chance of addressing our difficulties and potential deficits? That is the main question. I will ask the cabinet secretary that question, too, but I am interested in what you think the evidence shows.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Liz Smith

Professor Roy, you made some extremely interesting points about productivity and said that Scotland does very well in some cases and not very well in others. How does that relate to our concerns about employment trends in the Scottish economy? Do we have to use employment policies more to try to get us around some of the difficult structural issues?

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Liz Smith

Thank you.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Liz Smith

Notwithstanding what you said about the big factors, is it not the case that those effects have considerable implications for the amount of tax take that comes to Scotland and that, therefore, when a Government decides on its tax policy, the projections that you are giving about revenues in relation to the factors that you just mentioned are extremely important?

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 14 December 2021

Liz Smith

I will follow on from that point. If we assume that the main challenge is to address the problem of proportionately declining tax revenues, am I right in thinking that you both suggest that the policies that are required to deal with that challenge are not only fairly straightforward fiscal policies, such as increasing tax or changing thresholds, but policies that will address some of the structural problems in the Scottish economy?