Chamber and committees

There are 700,000 Scots living and working in England, not to mention those who are overseas. If we are a strong and growing economy, perhaps fewer people would feel the need to move south or overseas.

Control of fuel duty and excise duty would also be very impactful.

We will conclude there. It has been quite a long session, and I would like to thank the minister and Mr Doig for the clarity of some of their answers, although there are still some issues on which the committee would like further information. We would appreciate correspondence on those matters.

That concludes the public part of today’s meeting. The next item on our agenda, which we will discuss in private, is consideration of a draft report on the resource spending review framework.

Of course, we have to have a productive—and, in fact, increasingly productive—economy. It has to be increasingly productive per capita, because of the demographic challenge that we are facing.

Evidence from the Scottish Property Federation, as well as others, suggests that the projections around non-domestic rates are wholly unrealistic, because, for example, more and more people are moving to online shopping. I do not think that anyone really believes that, as far as high street spending is concerned, we will return to the situation pre-Covid, but the Scottish Government is still predicting a 25 per cent increase in revenues from that source over the next three or four years. How is that being addressed?

Moreover, if the Scottish Government maintains its budget at roughly the current levels, how will the tax system address major issues such as the social security shortfall if we do not generate the funds that the Scottish Government is predicting from non-domestic rates? In the document, you say that steps will be taken to grow the tax base. Will that mean additional taxes? Will it mean more people going to work and therefore more taxpayers? Frankly, that is what most of us would like to see. I am just wondering how you square those circles.

Take as long as you like.

Hold on a second, minister. There is no reason why we cannot attract migrants from other parts of the United Kingdom if we have a growing and thriving economy. It is not all about bringing in people from overseas. As I have said before in this committee, there are constituencies in Edinburgh that have 7,000 or 8,000 European Union citizens living and working in them, while my constituency has fewer than 300. That is not because of any difference in migration between Ayrshire and Edinburgh—it is because the economy in Edinburgh is so much stronger. Attracting people from other countries is important, but what about migration of working-age people within the UK? By that, I do not mean folk who retire to Arran, Argyll or Perthshire, but those who come to contribute to the economy.

Some workers might find it easier to move to Saudi Arabia and pay their taxes there if we do not get the highly paid and highly skilled jobs that we are talking about, but let us move on.

I now open up the session to my colleagues around the table. The first person to ask questions will be John Mason, to be followed by Daniel Johnson.

Thanks for that.

Moving on, I note that the framework talks about ensuring that Scotland’s public finances are fiscally sustainable. The issue of fiscal sustainability has certainly drawn the committee’s attention, given the Scottish Fiscal Commission’s forecast that by 2024-25—which will come round a lot sooner than we might think—social security spending will have increased beyond the block grant adjustment by £764 million, and that is even before the Scottish Government has delivered a 6 per cent uplift in benefits. How will the framework try to ensure fiscal sustainability?

Good morning and welcome to the 11th meeting in 2022 of the Finance and Public Administration Committee.

Agenda item 1 is an evidence-taking session on the Scottish Government's “Framework for Tax 2021”. We are joined by Tom Arthur, Minister for Public Finance, Planning and Community Wealth, who is accompanied by Alex Doig, deputy director for tax, Scottish Government. I welcome you both and invite Mr Arthur to make a short opening statement.

Minister, you talked about how tax rich oil workers are as a proportion of the Scottish economy. You also talked about the need for a green transition. What evidence do we have that people are transitioning from the oil and gas industry into green jobs at the same salary levels as they enjoy from working in the North Sea? In terms of taxation, that is critical.

I would appreciate that.