Seòmar agus comataidhean

I knew it—okay, right.

I get what you are saying, Professor Heald, but there is another difficulty in addition to the political difficulties of putting money away at a time when there is huge pressure on budgets, as there is at the moment. In previous decades, we saw a tendency in UK Governments to have, for example, what were, as I remember, called election bribes. Governments would have a couple of years of really difficult and unpalatable policies and then, suddenly, at the end of their four or five years, they would have a big pot of money. They would say that that was because their policies were working and they would blow the money on a pre-election splurge.

The difficulty is that that would perhaps be a temptation for a Government that was building up such a reserve. If it was 4 or 5 per cent behind in the polls, for example, it might feel a need to oil the wheels a bit and say that all the difficult policies that it had enacted over the past three or four years were working so fantastically well that it had managed to generate additional funding. Therefore, there are real difficulties with the approach that you suggest not just from a presentational point of view; the money would be a temptation to Governments.

When I was on Glasgow City Council, I looked at rent increases. Every year for 40 years, the lowest rates of increase were in election years and the highest rates were in the year after an election. I do not think that Glasgow was alone in that.

Okay. We have to think about the areas from which we are going to take that money and that is the most difficult decision of all.

I am a great believer in evolution and flexibility myself.

That concludes questions from committee members; I have one question about taxation. What do you believe is the public appetite for new local taxes? The committee has discussed the point that people who earn £43,000 to £50,000 will face a marginal tax rate of 54.25 per cent from April, when we add national insurance to income tax. From the remaining sum, people have to pay VAT, excise duty, council tax, fuel duty et cetera, so there is a significant squeeze on incomes. Further down the scale, people are also feeling the pinch.

Is it not the case that the Treasury has a bit of a surge in income at the moment? We have fiscal drag, and inflation is bringing in additional revenue. I understand that Rishi Sunak has £18 billion more than he anticipated that he would have at this time of year. We could even remove the care levy that is being suggested—that would be fundable.

What I am trying to say is that, given the inflationary pressures and the extent to which people are feeling the pinch, particularly from energy, food and fuel prices, do you feel that this is the right time to consider additional taxation of any kind?

It is interesting from the committee’s point of view that ministers always say in every budget that every penny is committed, but when we end up with such bumps in the road—the UK Government reneging on £290 million is a significant bump—the money is still somehow able to be found to smooth them over.

Of course, inflation constricts things even more, because the lack of indexing means that what you can do with the reserve reduces every year.

I call Douglas Lumsden, to be followed by Daniel Johnson.

Basically, that is April 2023.

As John Mason will remember, we have had quite a number of debates on waste tourism in previous years. I cannot imagine that we will delve into that today, but who knows?

I appreciate why the Government has decided to keep the rates the same as those in the UK, but surely they should have gone up by at least the rate of inflation. That would not have had many people trucking over the border.

I will resist the temptation to try to provide an answer myself.

Professor Heald, you say in the same paragraph that the situation encourages

“games of credit claiming and blame shifting”

and

“makes it more difficult for the Scottish Government to set priorities”.

Ms Congreve, you will have the final word. On the issue of fiscal drag, do you agree with what the UK and Scottish Governments have introduced for next year?