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I should say that my father died of alcoholism, so I am very sympathetic to some of your comments.

We move on to the issue of transparency. The witnesses will recall question 8 in our call for evidence, which asked:

“How has the Scottish Government reflected its commitment to fiscal transparency in the Spending Review and how can it best ensure that spending in the Budget 2023-24 can be properly identified and tracked?”

Some people did not answer that question in their submissions, but I note, David, that you said, “No comment.” Why was that?

The committee carries out pre-budget scrutiny and, through the evidence that we take from organisations and people like you, we try to influence that draft budget; we then scrutinise the budget over several weeks, including through debates in the chamber. In the UK, however, the chancellor just stands up and says, “This is a budget.” It is interesting to look at the different systems.

Does anyone else want to comment on transparency?

You said that you did not think that there is likely to be any behavioural change or impact as a result of the recent tax changes, but about 16 per cent of Scotland’s income tax comes from the 0.6 per cent of the population who are high earners. Has Unison done any work to look at behavioural change and where the tipping point is?

For example, I remember asking about that when I was in the Basque Country some years ago. Their view was that, if there was a 2 or 3 per cent differential, there would be no difference but that, above that, behaviour started to change and it became more economically valuable to those who would consider such change—people who have high incomes and are mobile.

I invite other witnesses, not just Stephen Smellie, to comment on that area and to say what research they have on behavioural change because, of course, it is not just opinions that matter—it is evidence.

Ross, your questions are excellent—in fact, I was going to ask almost exactly the same as we move on—but I am trying to keep us to the matter of tax so that we do not jump about. I want Stephen Smellie to answer that question at the appropriate point, but I want to stay with the issue of tax at the moment.

Thanks.

Clare Reid, you talked about fiscal drag, but there was no change in thresholds in Friday’s announcements, so does that mean that there is UK-wide fiscal drag?

Thank you.

Thank you very much. However, that was one of a number of suggestions about how we could raise revenue. All the submissions are disproportionately weighted in favour of additional expenditure but there are significant in-year reductions in the money that is available to the Scottish Government. There was a 5.2 per cent real-terms reduction in revenue and a 9.8 per cent reduction in capital this year—and that was with a 2.4 per cent inflation assumption, which has been blown out of the water to more than 10 per cent.

The point that Ross Greer made earlier was significant. I will let Stephen Smellie answer the questions that he asked in a minute, but first I will bring in Catherine Murphy because there is a compelling submission from Engender about how women are disproportionately impacted by the cost of living crisis. I ask Catherine to speak to that for a minute or two and discuss practical steps that the Scottish Government can take in its 2023-24 budget to try to change the situation.

Good morning and welcome to the 24th meeting in 2022 of the Finance and Public Administration Committee. Our first item is a round-table discussion on Scotland’s public finances in 2023-24, and the impact of the cost of living and public service reform, as part of our pre-budget scrutiny.

I welcome to the meeting Alison Douglas, chief executive of Alcohol Focus Scotland; Polly Tolley, director of impact at Citizens Advice Scotland, who is attending instead of Rory Mair CBE, who could not be here today; Catherine Murphy, executive director at Engender; Clare Reid, director of policy and public affairs at the Scottish Council for Development and Industry; Aaron Hill, director of policy and membership at the Scottish Federation of Housing Associations; David Lonsdale, director of the Scottish Retail Consortium; and Stephen Smellie, depute convener of Unison Scotland.

I thank everyone for their detailed written submissions. Of course, we have moved on a wee bit from the content of some of those submissions, given that we have had two Chancellors of the Exchequer since then, last week’s statement and the appointment of a new Government.

Incidentally, the committee also invited Scottish Chambers of Commerce to take part in today’s discussion, but we have not received a response to our invitation. Exploring the written views of witnesses at committee meetings is an important part of our inquiry process, and this is the second time this session that the committee has invited Scottish Chambers of Commerce with no success. I consider it discourteous to the committee that, on this occasion, it has not even responded. I encourage Scottish Chambers of Commerce to contact us to discuss the matter. In the meantime, the committee may well wish to reflect on that when it comes to future inquiries.

We are very grateful to the witnesses for their attendance today and, indeed, for their in-person participation. We have around 90 minutes for the session, which is intended to generate a discussion rather than be a straightforward question and answer session. If at any time you would like to raise a point, please indicate to the clerk and I will bring you in.

I do not intend to chair the meeting in the way that I did last week; I could not do so in any case, because it is not a straightforward Q and A session, as I mentioned. There have been so many changes that we may dot around a wee bit in relation to some of the issues. That said, we will try to stick to some of the major issues that face us.

I will bring Clare Reid in first. Taxation is obviously at the forefront of everyone’s minds at the moment, following last week’s statement. In your submission, you state:

“Scotland competes with other parts of the UK and other countries to attract investment and talent, and tax rates are one of the factors. Scotland’s ability to retain, grow and attract businesses, and retain and attract key workers, will be absolutely pivotal in generating the rates of growth which will make its public finances sustainable and fund improvements in public services and spending.”

What is your view on where we should go from here with regard to taxation in Scotland?

Ross, you asked the initial question. Do you want to follow up on that?

Thank you—that is very helpful. If anyone wishes to comment, I will be happy to bring them in.

Only Michelle Thomson has indicated that she wishes to speak, but I will also bring in Stephen Smellie again in a minute.