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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 24 March 2026
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Displaying 1485 contributions

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Finance and Public Administration Committee

Framework for Tax

Meeting date: 22 March 2022

Liz Smith

Minister, you said earlier that an effective tax structure is one that delivers what it says on the tin, and you cited the four principles of Adam Smith in relation to what is good about the Scottish tin.

An effective tax structure must also deliver the effective revenue that we need, specifically when it comes to addressing productivity and economic growth. As you know, that has been flagged up by the Scottish Fiscal Commission, the Fraser of Allander Institute and Scottish Chambers of Commerce as being a serious concern for the Scottish economy.

Both the convener and Mr Johnson made the point that, although income tax revenue is just one part of the revenues that we can hope to receive, it is a major part. I would like to ask about some of the concerns about those returns that were raised by the Scottish Fiscal Commission and, in particular, Professor Alasdair Smith. Professor Smith said to us, very clearly, that, when it comes to some of the regional aspects of income tax returns, there are areas such as the north-east that have been relatively productive in income tax revenue, whereas other areas have not.

What statistical analysis is the Scottish Government doing to consider the projected changes in industrial policy in each of the regions of Scotland, which will affect employment, and to look at which revenue returns might be better in the future? What data is being used for that?

Finance and Public Administration Committee

Framework for Tax

Meeting date: 22 March 2022

Liz Smith

Precisely. We surely need that important data, particularly in the next four or five years, for which the projections from the Scottish Fiscal Commission on income tax revenue are very weak. Do we not need strong data about which other industries people who are displaced from oil and gas would go to and, in particular, about those people who would be able to earn equally high sums of money outside oil and gas, as that would obviously lead to increased revenues? I am not saying that it would be easy, but is some analysis being done to work out where the high-level industries of the future will be, in order to improve income tax revenue and therefore productivity and growth?

Finance and Public Administration Committee

Framework for Tax

Meeting date: 22 March 2022

Liz Smith

It is a crucial area, minister. We all hope that the Scottish economy will improve and do really well because, let us be honest, it has a lot of potential. However, the fundamental point, which just about every member has mentioned so far, is that we are not doing as well as we could be, because our income tax revenues are depressed and not growing strongly enough in relation to the block grant adjustments. That has repeatedly been the central point when the committee has taken evidence from economic specialists and official forecasters.

What I am driving at is the importance of getting the data that we need to inform the policy that the Scottish Government will have to engage with to ensure that revenues increase so that we are much more fiscally sustainable for the future, because Scotland is lagging behind at the moment.

Finance and Public Administration Committee

Framework for Tax

Meeting date: 22 March 2022

Liz Smith

But not as fast as the block grant adjustment.

Finance and Public Administration Committee

Framework for Tax

Meeting date: 22 March 2022

Liz Smith

I do not disagree, minister. The block grant adjustment is essential, but so, too, is a tax structure that benefits Scotland by increasing productivity and growth, and encouraging investment.

The convener mentioned the fact that there is potential for internal migration from other parts of the UK—people coming from other parts of the UK to Scotland, not to retire but to be active in the labour market. What analysis has the Scottish Government done of the reasons for those people coming to Scotland and where they have gone? On what basis has their productivity and addition to the economy been available to those who are looking at tax policy?

Finance and Public Administration Committee

Framework for Tax

Meeting date: 22 March 2022

Liz Smith

That they did not.

Economy and Fair Work Committee

Scottish National Investment Bank

Meeting date: 16 March 2022

Liz Smith

Was the board made aware of any concerns between the former chief executive and Scottish Enterprise?

Economy and Fair Work Committee

Scottish National Investment Bank

Meeting date: 16 March 2022

Liz Smith

On that theme, what do you feel that SNIB has to do in order to attract and help the private sector to become more engaged?

Economy and Fair Work Committee

Scottish National Investment Bank

Meeting date: 16 March 2022

Liz Smith

Mr Watt, from having met you before, I know that, when it comes to the very large sums of public money that the bank holds, you agree whole-heartedly that there should be full accountability and transparency about how the money is spent. In particular, you have said publicly and privately that the way that the public are made aware of the objectives of the bank and the direction of policy is extremely important. I want to be absolutely clear about whether, in the past year, the board was made aware of any disagreements between the then chief executive and Scottish Government ministers about the direction of policy or the objectives of the bank. If there were any disagreements, what were they?

Economy and Fair Work Committee

Scottish National Investment Bank

Meeting date: 16 March 2022

Liz Smith

In the past year, has the board been made aware of any disagreements at all, which are unrelated to policy and the direction of the bank?