Seòmar agus comataidhean

You have made that very clear at this meeting and elsewhere.

One of the reasons why the markets were so spooked was not just the lack of an OBR look-ahead but the fact that the UK Government intended to borrow vast sums of money to fund tax cuts. I wondered at the time whether the same people who were running gleefully to borrow money for those would also run gleefully to press for an increase to the Scottish Government’s borrowing powers, although we would both immediately agree that the Scottish Government would not be so stupid as to borrow money to fund tax cuts.

In light of that, will you commit to an increased emphasis on further proper flexible borrowing powers for the Scottish Government? The situation has laid bare the lack of fiscal resources available to you in the current economic climate.

Just picking up on John Mason’s point around investment zones, it is good that some initial discussions have taken place. Do you have any concerns that money will be made available for them that bypass the priorities of the Scottish Government with no proper accountability or scrutiny, as has been highlighted as a concern in relation to some of the other levelling-up-type funds? Have you got that far in your discussions yet?

You have talked eloquently about last week’s pretty disastrous fiscal event. Arguably, too many people in politics and perhaps even the media were too hasty to view the wider economic landscape through the prism of London. That often happens. However, that budget and fiscal event talks to a culture, perhaps, of risk taking. We saw that with defined benefit pensions, where liability lies with the providers. Today’s Financial Times reports some statistics on the dwindling investment of UK pensions in the domestic stock market. The article says:

“as recently as the mid-1990s, pension funds allocated just under half their assets to UK equities, a figure that has fallen to under 15 per cent.”

It goes on to say that the type of pension schemes that, last week, were

“caught up in the liquidity squeeze ... allocate just 3 per cent of assets to UK equities.”

Frankly, it is not a good sign that long-term patient capital vehicles are reluctant to invest in their home turf and the alignment of that. That strikes me as a business opportunity for Scotland whereby you signal a prudent approach, aligned with the Scottish National Investment Bank with long-term patient capital. Are you able to commit that, with regard to all funding towards the Scottish National Investment Bank, and, indeed, in relation to long-term patient investment capital, you will do all that you can to protect that and perhaps even increase it? It would be good if Scotland were seen as a place for some of these defined benefit schemes to invest, where they are not going to invest elsewhere.

I am on record as talking about corruption and how we should reframe the loss of those moneys in gross domestic product terms. People tend to consider corruption as crime rather than a loss to GDP and, therefore, an inability to fund vital public services. I have said in a speech that conservative estimates put the loss to UK gross domestic product at around at around £267 billion each and every year—that comes from figures from the likes of the National Crime Agency.

Can we have a short update about any further discussion of the proceeds of crime? The figure was less than £30 million prior to 2016. As I understand it, that was then folded into the Scottish budget and nothing has come to Scotland since 2016. The UK Government regards it as something that should be deducted from Scotland’s budget, whereas the Scottish Government sees it as something that should come under the no detriment principle.

A loosening of regulation has been trailed, which usually correlates with increased criminal activity—that is what we have seen: history tells us that. Have there been any further, more recent, discussion about the proceeds of crime? In my opinion, that affects Scotland’s international brand—we do not want to be associated with that. If there has been no discussion, will you undertake to look at that more closely, given the correlation with loss to GDP and the impact that that has on Scotland?

I am sure that you have. [Laughter.]

I will just ask one more question, because I know that other people want to come in.

We have not talked all that much about conditionality yet, but it follows on naturally from data collection. If there is one or a few things that you would recommend about conditionality—assuming that the data is in place, which is a whole separate discussion—what specifically would you recommend for the budget? You can give me your top three, because there are quite a lot of things, I suspect.

In essence, you are utterly reframing the issue as an economic problem to be solved rather than an equalities problem to be pigeonholed. That is coming through quite clearly.

Good morning. You have touched on so many different areas. I will ask one open question now and I may want to come back in.

I am on the Finance and Public Administration Committee, which yesterday took evidence on the budget from Engender. It said it had concerns regarding the lack of attention that the Scottish budget process pays to structural gender equality. You have talked about data and outcomes, and you have given some specifics. How can our budget process move beyond having regard to systemic barriers for women and take the bold steps needed to effect real change? You are here today, so the question is: have you been to every other committee to give similar evidence that is aligned to them, given the cross-cutting issues that you have started to outline? Have you been invited to do so? What comment could you give about the actual process? That would be useful as well.

If you are really going to effect change, you could say, for example, that no public body should award any grant funding unless it is entirely equitable. It is more complex than that. We know that women may not apply for grants, for example, and that is a cultural barrier, but that is a very simple example. The issue is about effecting change, which goes back to the point about things being systemic. If I were a budget holder, I might be inclined to do that, particularly for women in business. I understand that the issue is complex. There has been tinkering thus far, which has been very well meaning, but maybe we need to be bolder. If you were in charge, what would you be doing about allocation of funding?

Carolyn, do you have anything to add?