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Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 5 May 2021
  6. Current session: 12 May 2021 to 22 April 2025
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Displaying 3120 contributions

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Finance and Public Administration Committee

Fiscal Framework (Independent Report)

Meeting date: 11 January 2022

Kenneth Gibson

Time is marching on and I have six colleagues who want to ask questions, so I will ask just one more. It is about the issue of transparency that David Bell touched on, so he might want to answer.

The Institute of Chartered Accountants of Scotland highlighted the example of a lack of clarity around the role of block grant adjustments in relation to the land and buildings transaction tax additional dwelling supplement. The institute noted that some had suggested that the tax was introduced in Scotland only because, without the introduction of a similar tax to England’s, the corresponding block grant adjustment would be such that there would be a reduction in the block grant. It commented that that

“demonstrates that either the BGA is wrong in principle or that there is great confusion over it”.

Will you comment on that, Professor Bell?

Finance and Public Administration Committee

Fiscal Framework (Independent Report)

Meeting date: 11 January 2022

Kenneth Gibson

I thank our three witnesses. I had hoped to ask a question about behavioural responses—I know that that issue is close to David Bell’s heart—but time is sadly against us, as we are well over time already, so I will call a halt to the session.

I hope to see all the witnesses again before too long; I am sure that we have a lot more to discuss on this particular issue. Once again, I thank the three Davids.

11:37 Meeting suspended.  

11:45 On resuming—  

Finance and Public Administration Committee

Fiscal Framework (Independent Report)

Meeting date: 11 January 2022

Kenneth Gibson

Take your time. [Laughter.]

Finance and Public Administration Committee

Fiscal Framework (Independent Report)

Meeting date: 11 January 2022

Kenneth Gibson

Does David Eiser want to comment on the question that I asked? What should the independent review cover, and what should be the terms of reference for the independent report?

Finance and Public Administration Committee

Fiscal Framework (Independent Report)

Meeting date: 11 January 2022

Kenneth Gibson

Yes, there is. Before I touch on the block grant, I will follow up what you said. You talked about the adequacy—that was the word that you used—of the fiscal tools. Do we have adequate fiscal tools in terms of borrowing limits, for example? Should the limit be raised? Should it be linked to inflation? Where do the limits need to be increased to give more flexibility for Scotland?

Finance and Public Administration Committee

Fiscal Framework (Independent Report)

Meeting date: 11 January 2022

Kenneth Gibson

In other devolved regions around the world, the baseline is reset every five, seven or 10 years. The previous panel touched on that. That might take into account major structural changes such as—as you and others have mentioned—in the oil and gas industry in the north-east of Scotland. Should a reset be built into any future agreement between Scotland and England and, indeed, Wales and England—or, I should say, between Wales and the UK and Scotland and the UK?

Finance and Public Administration Committee

Fiscal Framework (Independent Report)

Meeting date: 11 January 2022

Kenneth Gibson

A reset must be based on fairness to both sides. There cannot be a situation in which Scotland—or Wales—would always benefit. The reset would have to be based on specific criteria. That should be looked at.

Wales’s powers are different from Scotland’s. What impact has that had on the block grant adjustments? Wales has more limited powers. You said that property prices have gone up more than was anticipated and that that has helped with land taxes and stamp duty. What impact has that had? Has the Scottish experience encouraged or discouraged Wales from seeking more fiscal powers?

12:00  

Finance and Public Administration Committee

Fiscal Framework (Independent Report)

Meeting date: 11 January 2022

Kenneth Gibson

Wales might have learned from Scotland, but it is time that Scotland learned from Wales. In terms of the block grant adjustment, what has happened with regard to separate tax rates has been a real eye opener.

Our inquiry will go on for some months; I hope that we will be able to speak to both of you further down the line. However, I have a final question for you, before I bring in other members. If the Scottish Government could wave a magic wand and make one change to Scotland’s block grant adjustment, what should it be?

Finance and Public Administration Committee

Fiscal Framework (Independent Report)

Meeting date: 11 January 2022

Kenneth Gibson

Who has not fed their dog? Is that you, Michelle? It is Michelle’s dog—I wondered why she had disappeared from view. Are you back, Michelle? Are you joining us?

Finance and Public Administration Committee

Fiscal Framework (Independent Report)

Meeting date: 11 January 2022

Kenneth Gibson

Yes, I do not want to focus too much on political issues. Scotland might get powers over corporation tax and a share of VAT assignment, and I am quite keen on getting powers on alcohol and tobacco duties, which would certainly help, given some of the issues that we have to deal with on those matters.

I thank Ed Poole and Guto Ifan for their evidence. I apologise for delaying you by some 30 minutes because the previous session overran. I appreciate your patience.

The committee will consider the next steps on this work once the UK and Scottish Governments agree the terms of reference, timetable and authorship of the report. In fact, we might invite Ed Poole and Guto Ifan back. We did not spend a lot of time asking questions, mainly because their submission is so detailed, which meant that we already had many of the answers before us, so I thank them for that.

12:32 Meeting continued in private until 12:41.