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I am thinking about the impact on capital. Capital inflation is running higher than resource inflation, yet the GDP deflator is predicted to grow by only 5.5 per cent over four years. That seems to be nonsense. Anyone who wants to get a house built or a road patched and goes out to tender will not be quoted a 5.5 per cent increase over the next four years, will they? Surely there should be a much more realistic look at how inflation is impacting on capital in particular.

I am thinking about looking in the round and looking not at individual projects but at capital procurement, which is a huge aspect of UK public spending relative to the same projects on the continent.

Does Mr Hughes or Professor Miles have any final comments? Are there are any areas that you feel we have not touched on that you want to emphasise?

We move on to the second part of our evidence session on the UK autumn budget statement and the wider UK context. We are joined remotely by Carl Emmerson, deputy director, and David Phillips, associate director and head of devolved and local government finance at the Institute for Fiscal Studies. Good morning, and I welcome you both to the meeting. I am glad to see that you are sitting together; that should make life a wee bit easier.

I will start where we left off. I quoted Paul Johnson’s response to the autumn statement to witnesses from the OBR, who gave evidence just a few moments ago. Professor Miles said that he thought that the IFS was being “somewhat pessimistic” in its outlook. What is your view on that?

I thought he might be.

What are the implications of that for the Scottish budget?

My final question is effectively from the IFS.

Paul Johnson has said that the chancellor

“or his successor is going to have the mother and father of a headache when it comes to making the tough decisions implied by this statement in a year or two’s time.”

What do you feel that the statement means in the medium to long term for the UK economy, and what might the knock-on effects be for Scotland’s economy?

The historic tax burden is 37.7 per cent, which is, I think, the highest that it has been since the second world war. Professor Miles, do you want to come in?

On that note, I will open up the session to colleagues.

It is difficult to look at the triple lock, because, certainly, over the past decade, pensioners have become relatively more prosperous than other age groups—than younger people in particular. According to your analysis, the UK standard of living will fall by about 3.1 per cent by 2024-25. Have you looked at how that impacts on different age groups?