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Earlier, you said that, if the OBR is being a bit optimistic and the SFC is being a bit pessimistic, it will come out in the wash in a few years’ time. I get that. That is not exactly what you said, but it was roughly that.

The problem for us is that, in the short term—the next one, two or three years—those forecasts affect our budget, so we could end up making savings that we would not need in the long run because everything would come out in the wash and the economy would, in fact, recover. Is there not a problem if one forecast is cautious and another is optimistic?

There would be short-term pain for long-term gain.

Yes, that is right.

I think that schools still think that way in a sense. Earlier, I made a comparison between my nephews. I do not want to provide too many personal details, but one of my nephews went to university and it will take him some time to earn wages, whereas my other nephew did not and is earning very good wages. In the short term, that helps with tax. Are we emphasising going to university and getting academic qualifications too much, at the expense of practical apprenticeships such as those in engineering and so on?

Thank you for that. I do not want to spend too much longer on the subject, but I highlight that one of my nephews, who is aged 22, did not go to university but has done extremely well and has bought his own house.

The main point that I want to discuss concerns the GDP growth rates. We have an interesting paper from the Scottish Parliament information centre that contains predicted growth rates. Those predictions have been made over a relatively short time, but I accept that timing might be part of the issue.

According to the paper, the Scottish Fiscal Commission’s prediction is for a 3.8 per cent growth in GDP in 2022; the Fraser of Allander Institute’s is for 4.8 per cent; the Office for Budget Responsibility’s is for 6 per cent; the National Institute of Economic and Social Research’s is for 4.7 per cent; the Bank of England’s is for 5 per cent; and HM Treasury’s is for 5 per cent.

The OBR’s prediction seems to be a bit of an outlier, as it is quite high. It was made in October, which was only two months ago, and your prediction is more recent. Can you say a bit more about those differences? Obviously, the issue has a real effect on our budget, and the OBR’s prediction seems very high.

I am interested in what Graeme Roy said about differentiating between what we can and cannot change, and in some of the comments about productivity, which is probably more the work of the Economy and Fair Work Committee—I think that Michelle Thomson also sits on that committee.

I still wonder about productivity. Putting two crew members on a train is less productive than putting one on it, but doing so increases safety, enables the collection of fares and so on, so productivity is not always an issue. Is tourism a sector in which it is harder to have good productivity, because a good hotel has more staff and looks after people better? I am not sure.

Where I am going with this is that we cannot control the population, in one sense, but we could control it with immigration. Out of all that we are talking about—productivity, skills and population—is population the biggest issue? Is that what is holding us back?

We have not said very much in this session about capital expenditure. We seem to be coming to the limit of how much we can borrow for capital expenditure, which is £3 billion. If we have to cut back on capital expenditure, will that result in a hit on growth in the economy?

I will move to a slightly different point. In paragraph 39 on page 14 of your report, you say that we are heading towards a £469 million reconciliation for 2024-25. You make the point—it seems to be common sense—that any Government that knew that it was doing that would slightly underspend each year. However, you highlight that there is a problem, in that we cannot save up that money in preparation, because of the rules around the Scotland reserve. Could somebody expand on that and explain it to me and others?

It all gets quite complex, and I presume that that will be one of the issues that will be discussed in the review of the fiscal framework.

My final question is linked to that. In paragraph 2.35 on page 29 of the report, you talk about “average underspend” with regard to the Scotland reserve, and you say that

“the utility of the Reserve”

has been reduced from 2.1 per cent to 1.5 per cent of the budget. Can you explain why that is happening, Professor Breedon?

I realise that you work at a university and that you said earlier that there was an assumption that, if people went to university, they would get a good job and that would be them for life—that was absolutely the case when I was younger.

I take your point that there is probably a long-term and a short-term issue to deal with and that we probably need to do more in the long term. Do you think, though, that it would be worth repeating that short-term project, even though it would involve funding of only £1,000?