Chamber and committees

One of the issues is that the United Kingdom’s standard of living is much the same as it was in 2003. We have been left behind by a lot of other countries. We have obviously had a financial crisis, with austerity, the pandemic and so on. Is economic growth not the answer? What does the STUC propose to stimulate economic growth so that the cake is bigger, which will of course generate additional tax revenues?

Thank you very much for taking the time to speak to the committee. The evidence that has been gathered from this inquiry, including an evidence session with the Deputy First Minister in early October, will help us to inform the committee’s pre-budget 2024-25 scrutiny.

That concludes the public part of today’s meeting. The next item on our agenda is consideration of our work programme in private.

Displacement is a key issue. For example, Cambridge Econometrics said that, of the enterprise zones that were set up in the UK, which lasted from about 1984 to about 2012, 50 per cent of the 126,000 jobs were, in effect, displaced from elsewhere. In a Scottish context, between 2012 and 2017, there was a net increase in private sector jobs in the enterprise zones that were set up in Scotland of just 16,000, compared to an initial forecast of 54,000, and 34 per cent of those were relocated from elsewhere through displacement.

What lessons are being learned from that? I understand that the UK had seven freeports, up until about 2012, when the last one, Liverpool, closed. Therefore, they have not had a great history of success in doing what it says on the tin.

With regard to that pressing urgency, I find the numbers that have been suggested to be quite fantastic: 25,000 jobs for Cromarty and 50,000 for Leith. With regard to Cromarty, you will be expecting people to move to those jobs, but what is being done to build the schools and homes that those people will need? You are talking about trying to get those people in early, so how is the infrastructure being upgraded to ensure that that can happen? You will have to provide a huge level of support in terms of the infrastructure behind the green port, to ensure that people have somewhere to live and take their kids to school, apart from anything else.

I will open it out to colleagues. The first person to ask questions will be our deputy convener, Michael Marra.

That appears to have concluded the questions from the committee, but I will just point out that, ironically, the council tax was meant to be a temporary fix when it came in more than 30 years ago. One of the difficulties that we have not touched on is that, if we did have a new system, whatever that system would be, the number of appeals would run into the hundreds of thousands, because that is what happened when the council tax came in, as I remember from my days on Glasgow City Council.

David, do you want to make any points that we have not touched on?

I turn to issues of pay and taxation. It has been said that the 3.5 per cent pay rise suggested in the public sector pay strategy for 2023-24 is not remotely sustainable. What are the average pay settlements in the public sector now? The details that we have been provided with come from November 2022, but the way that things have been going in recent months puts us in a very unstable situation. Inflation has declined, but where are we with public sector pay in Scotland?

I appreciate that.

Behavioural change came up a lot last year. The Scottish Fiscal Commission said that, of the £30 million raised from top-rate payers, 90 per cent would be lost to behavioural change. The commission said that it was not about folk movin fae Edinburgh to Newcastle, for instance; it was about somebody who had been working five days a week saying that they will now work only four days a week, because they pay too much tax. That impacts on productivity and so on.

We all want there to be the optimum level of expenditure in our public services. The difficulty with the fact that both the main UK parties have said that they will not have a wealth tax and will not increase top-rate tax is that it leaves Scotland a wee bit exposed, within the United Kingdom, not so much for retaining people but for attracting people who might want to invest here or come and live here.

I imagine that you are right that not many people want to move—I certainly wouldnae want to move south of the border, whatever the tax rate was—but other folk might think, “Do you know what? I don’t know if I want to go there,” because of the direction of travel.

Do any members wish to comment?