Chamber and committees

I want to follow up something that you said a moment ago. In your written submission, you said that the Scottish Government is

“continuing to focus funding in areas where things have already gone wrong in people’s lives, rather than providing funding to stop them going wrong in the first place”,

without evaluating the impact on other areas.

Are you suggesting that there should be an evaluation before the Scottish Government increases its expenditure in those areas? What do you say to people who say that folk are struggling and need the money now? Some of the solutions that are suggested through local government are perhaps a bit longer term than the folk who would otherwise receive the benefits would wish for.

Give us one example, then. Give us one thing that should be deprioritised across the vast area of local government expenditure in 32 local authorities. If the issue is of fundamental importance, there should be examples. If we are to produce a report making recommendations to the Scottish Government on deprioritisation, it would really help if we had at least one example of where deprioritisation should take place.

Okay—thanks.

Paul, in talking about digitalisation and the potential savings to South Lanarkshire Council from doing that, you say in your submission that the Scottish Government might need to help with the implementation costs. That would be another initial cost for the Scottish Government. What additional assistance would the council need? What savings would be made through digitalisation over one year, five years or whatever the time period for which you would make an assessment?

They used to say, “Where there’s muck, there’s brass.” Now it seems to be data. Things have certainly moved on from when I were a lad.

Stephen Boyle, you refer in your submission to Audit Scotland’s report, “Addressing climate change in Scotland”, which contains

“a high-level summary of the key improvements that need to be made across the public sector if Scotland is to reach its climate change ambitions”.

Can you provide some examples of those improvements, the cost and the delivery timescale?

Susan Murray, in your submission you call for more spending on public transport. Can you specify how much more, and what it should be allocated to—buses, ferries or rail? Where can that funding be sourced from?

People can jump in if they wish to add anything, although the submissions are all quite distinct, so I do not think that there will be much overlap in my questions except in one or two cases. If you wish to contribute, please feel free to do so—I should have said that earlier.

Charlotte Barbour, you said that you wished to draw attention to dividend taxation in particular, which is

“set at UK level”

and

“is a standing invitation to higher rate Scottish business income taxpayers to consider remaining within lower UK rates of taxation by incorporating their businesses and paying corporation and dividend tax, rather than paying Scottish earned income tax rates.”

What is the impact of that in revenue loss to Scotland? What is the potential for it to be a serious issue?

No, it is not.

You have also said that this is an obvious area in which to consider further devolution—I do not know whether the UK Government would consider that. It is uncertain whether increasingly differentiated tax rates between Scotland and the rest of the UK will reduce the attractiveness to higher earners of coming to Scotland. That matter was talked about years ago, as you will be aware. What research has been done about that question over the years? I have seen research from other countries that says that a 2 or 3 per cent differential does not make much difference to behaviour—you will not move everything because of a 2 or 3 per cent difference, but you might if it is 6, 7 or 8 per cent. Has any research been done as to where the tipping point might be in relation to Scotland and the rest of the UK?

I do not think that they are; it is quite clear that they are not.

If inflation is at 10 per cent and wages go up by 7 per cent, on average, that will still take a huge chunk of people into higher taxes and then they will be liable. Therefore of the extra money that they might get through a pay increase a higher proportion will be taken in taxes.

Do you think that the Minister for Finance and the Economy should be the chair, perhaps?