Chamber and committees

I am tempted to say something, but I am not going to.

I completely agree with that, and it is a really important point. Given that scale, surely £10 million would have only an infinitesimal impact in that sector, whereas £10 million or £15 million could have a significant impact on Scotland’s R and D footprint and its global competitiveness at university level.

Indeed.

Vikki, the last word is with you.

Thank you. I will now open up the session to colleagues, starting with the deputy convener, Michael Marra.

Finally, on the winter fuel payment, if the Government decided that it would pay the winter fuel payment, not only would it have to pay the £140 million to £160 million back next year, if it continued to make the payment, it would have to find £140 million to £160 million next year on top of that, and every other year. We could end up with a situation whereby, over five years, the Government could have to find £700 million to £800 million, and possibly more, from an ageing population.

It seems like quite a huge number. I will move on in a second but, in the “Fiscal Update”, you talked about

“public sector pay offers in Scotland now coming in higher”

and the fact that

“There is significant uncertainty on the level of funding the Scottish Government will receive from the UK Government ahead of the UK Budget.”

I think that we are all aware of that, but what are the parameters? Where do you see the parameters for that? Do you have any hint, clue, idea or thoughts about where they would be?

You said that productivity growth

“will remain subdued and will not return”

to the pre-global financial crisis average. What are the reasons for that?

When we took evidence at the University of Dundee, Dundee City Council mentioned that 22,000 people were economically inactive in the city, around 11,000 of whom could, it believed, be encouraged or persuaded back into the workforce. There is a huge pool of people who could perhaps rejoin the workforce; I know that a lot of focus is being given to that in Dundee, and I am sure that other areas are doing the same.

If Scottish public sector workers are better paid by an average of £2,400 and pay is increased by 5.5 per cent across the board, that alone will result in an increase of £132 per worker over and above what the figure would be south of the border. If we multiply that by 548,000 workers, we end up with quite a big number.

If, as you said, half the Scottish Government’s budget—£25 billion—goes on pay and the Scottish Government ends up giving people pay rises of 5 or 6 per cent, even though they are already paid an average of 6.5 per cent more than people south of the border, that will cost about £1.3 billion or so.

How important is it that the Scottish Government has a pay policy that it sticks to in the annual budget deliberations?