Chamber and committees

We are indeed.

In your submission, you said:

“The RSE believes that a spending priority will be to support the economy through investing in early-stage companies (spinouts and start-ups), which are crucial to job creation”.

I agree. What mechanism could be used through the budget settlement to enable that to happen?

Name them.

That is helpful.

Yes, but have you looked at what the impact on behaviour would be of increasing those taxes? Obviously, if someone faces a significantly higher tax burden in Scotland than they would face elsewhere, they might decide to operate their business from somewhere else and we would then not get their income tax. That is what I was asking about. There have been studies on behavioural impacts, and I just wonder what level of taxation you think is the optimum in that regard.

Thank you for that.

Gail Macgregor mentioned the fiscal framework. In paragraph 28 of your submission, you say:

“The devolution of tax powers to the Scottish Parliament has introduced a higher level of risk and uncertainty around the assumptions required to deliver a Budget ... Fundamentally the relative difference in earnings growth and the composition of taxpayers in Scotland compared to the rest of the UK, which is a key feature of the current block grant adjustment mechanism, suggests an inherent unfairness in Scotland’s disfavour.”

How would you rebalance that? We will be deliberating on that issue over the weeks and months ahead.

Susan, I asked you the first question, and you will get the last word. Obviously, the consequentials will be rolled out over a number of years. What is your view of how the proposal will impact on Scotland’s budget and economy?

Ray, is there anyone who knows how all those different things fit together?

Indeed. As I recall, productivity is a balance of skills, attitude, aptitude and capital applied. It is a question of getting that balance right, is it not?

I thank our witnesses. In particular, I thank you for coming to give evidence in person, which makes a significant difference to the quality of the session. That is very much appreciated. We hope to see you all again before too long.

We will have a two-minute break, after which we will consider a letter from the cabinet secretary.

What about CIPFA, Alan?