Chamber and committees

Yes. It is significantly lower than what the OBR and the Bank of England anticipate. I will be interested to follow that and see what happens.

In the weeks ahead, MSPs will no doubt battle over the numbers in the chamber. In your report, you say that, overall,

“the Scottish Budget in 2022-23 is 2.6 per cent lower than in 2021-22”,

or 5.2 per cent allowing for inflation, assuming a deflator of 2.6 per cent.

We have been bombarded with a plethora of figures. For example, the Scottish Government’s budget says:

“In practical terms, between 2021-22 and 2022-23, resource funding is 7.1% less in real terms.”

It goes on to say that

“The equivalent reduction for Scotland’s capital budget grant funding”,

which seems to be a less controversial figure,

“is a 9.7% real terms cut between 2021-22 and 2022-23.”

Why did you come to your conclusions on those figures as distinct from figures that, for example, include Covid spend and predict a real-terms increase in the budget? Will you talk us through the figures?

Page 22 of the budget document mentions that poundage is below the rate of inflation for the next year. However, your assessment suggests that non-domestic rates income will increase by 25 per cent from 2022-23 to 2026-27, to more than £3.5 billion, when the economy is expected to grow by about half that amount. What is the reason for that? Is it just inflation, or are there other reasons why you expect that income to grow?

Let us be a bit more optimistic than that.

Michelle Thomson is next.

It is 2-1 on, rather than 2-1 against, so to speak.

Thank you for that. I will bring in committee members who want to ask questions.

I am sure that colleagues will want to press you on that. I am just firing out questions on all the different areas that we want to cover. There is so much to cover and there are so many issues to raise.

I will raise another important issue. You predict a £417 million shortfall in income tax by 2026-27. How much, over and above United Kingdom productivity, must the Scottish economy grow in order to negate that figure, so that we do not end up reaching it?

I will ask a final question before I bring in my colleagues around the table. At paragraph 42 of your report, you say:

“Over the next five years we expect capital funding to fall in both cash and inflation adjusted terms, primarily because of reduced UK Government funding.”

What are the implications of that on Scotland’s borrowing limit and its ability to take forward capital projects?

As a committee, we are trying to cut through some of the politics—it is not exactly easy—to try to get as much of a consensual approach as possible. I am keen to get more information from you on the legendary £620 million, which is mentioned in annex A of the budget document. How we get to the figure of £620 million and how likely it is that that money will be delivered is not really spelled out in precise terms. The Scottish Fiscal Commission has said that it thinks that it is reasonable to assume will be delivered, but there is a difference between a reasonable assumption and the money actually arriving. That would have implications. Perhaps Graeme Roy can have first go at that and then David Eiser could come in. Daniel Johnson wants to come in with a related question after that.

Do not all rush. Eeny, meeny, miny, moe. Yes—Mr Ireland.

Thank you. I will start by asking about the £620 million, which you ended on. You said that you have some doubts about whether that £620 million will arrive in the Scottish Government’s coffers. In your report, you refer to annex A of the budget document as detailing that, but I wonder whether you could go through what the sources are and what the likelihood is of that £620 million coming to the Scottish Government.