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Chamber and committees

Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 5 May 2021
  6. Current session: 12 May 2021 to 25 November 2024
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Displaying 855 contributions

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Finance and Public Administration Committee

National Care Service (Scotland) Bill: Financial Memorandum

Meeting date: 25 October 2022

Liz Smith

Mr Mason cited the example of college regionalisation, which represented a substantial change to the college sector. I also remember the passage of the Children and Young People (Scotland) Bill, which was a huge bill. At the beginning of those processes, there were issues with the accuracy of the financial memorandums to the bills. Such substantial pieces of legislation take a lot of time to go through Parliament. In addition, at this time cost inflation is rising substantially, which will affect the financial memorandum, over time.

The setting up of a national care service is a huge policy change. I will not argue about the merits and demerits of that policy change, but the financial memorandum that accompanies it is really important. I feel that, at the moment, we are not in a position to make a very good judgment, because we do not have enough information.

Finance and Public Administration Committee

Public Finances 2023-24 (Impact of Cost of Living and Public Service Reform)

Meeting date: 4 October 2022

Liz Smith

That is very helpful. It is encouraging to hear that there is some good news among the gloom.

Notwithstanding the points that you have just made, I will come back to two of the challenges that you cited, namely those in relation to the workforce and housing. In making Scotland a much more attractive place to live, work and invest, is it the Scottish Government’s intention to ensure that the tax system—the levers that you have with the Scottish Parliament—drives down tax to ensure that we are not seen as uncompetitive when compared to the rest of the UK? That is an issue that is coming through a lot of forecasts. If the current fiscal arrangements in the UK stay in place, there is no question but that there will be difficulties for the Scottish Government unless it can match some of the tax changes. Do you accept that point?

Finance and Public Administration Committee

Public Finances 2023-24 (Impact of Cost of Living and Public Service Reform)

Meeting date: 4 October 2022

Liz Smith

However, on the back of that, when the initial announcement came from the UK Government, a large proportion of the Scottish business sector was very supportive of a large part of the fiscal statement, because it was very focused on high growth and a low tax agenda, in contrast to many of the forecasts for Scotland, which has seen fairly high tax—not necessarily with the benefits of good-quality public services in the way that we would like—and low growth.

I come back to the question that some of our very senior businessmen and women who want Scotland to have the same focus as the United Kingdom when it comes to that low-tax, high-growth agenda, are asking. In the forecast that you will make for the Scottish budget, will you apply that same policy so that people feel that Scotland is not only somewhere they want to stay, but somewhere they want to come? As you said in the debate on the programme for government, there are serious issues about the size of our working population.

Finance and Public Administration Committee

Public Finances 2023-24 (Impact of Cost of Living and Public Service Reform)

Meeting date: 4 October 2022

Liz Smith

I do not disagree with you on some aspects of the workers issue. I think that you and I share the same views on the Brexit scenario, but the issue is not all about that, by any means; it is about differential tax rates. You mentioned housing. The changes in stamp duty down south will benefit someone who is buying a house to the tune of about £20,000. If we do not make similar changes to the land and buildings transaction tax, things will be made more difficult here. I am concerned that there are other issues at play in Scotland that do not necessarily make it a particularly attractive place in which to live and work.

This is not just about the current budget scenario, although I agree that there are many issues with that, particularly the lack of adequate forecasts, which you rightly cited. This is not a new problem; it has been going on for quite some time, which you will see if you look back at what the Scottish Fiscal Commission and other forecasters have been saying. That is why I am really interested in what direction of travel the Scottish Government will set out to address the significant issues of growth and productivity in our economy. This is not just a Brexit issue.

Finance and Public Administration Committee

Public Finances 2023-24 (Impact of Cost of Living and Public Service Reform)

Meeting date: 4 October 2022

Liz Smith

Good morning, Deputy First Minister. I put it on record that I understand and accept that your job is much more difficult because of the difficulties that have been introduced by the Westminster Government, particularly with regard to the forecast. I absolutely understand why you prefaced your remarks with reference to that.

In the debate on the Scottish Government’s programme for government at the start of this session, you mentioned two interesting things to me, namely that the Scottish Government is challenged with trying to improve economic growth, particularly by increasing productivity, and that you feel that the size of the Scottish working population in relation to total population is a major problem—I think that those were the words that you used. That latter point has been a focus of the Scottish Fiscal Commission for some years now.

Notwithstanding all the challenges that we face, could you say something about your economic plan to try to develop issues relating to growth? What will the Scottish Government prioritise in trying to improve our economic growth and our productivity?

Finance and Public Administration Committee

Public Finances 2023-24 (Impact of Cost of Living and Public Service Reform)

Meeting date: 4 October 2022

Liz Smith

I was interested in what you said in response to Mr Greer about the need for a grown-up discussion in Parliament about what we bring in through revenue and what we spend. I do not think that there is any doubt that increasing transparency and accountability in this Parliament is essential. I think that it was two weeks ago that we had witnesses in the committee who were very keen on that idea.

In fact, a couple of the witnesses were suggesting that we should have a finance bill to enhance that process and I am interested to hear your views on that. It comes on the back of the national performance framework, which is obviously centre stage to the Scottish Government’s delivery. We have had a lot of debates about how easy it is to measure the outcomes when you have specific policies within the national performance framework. How easy is that process? Are you minded to be fairly favourable towards the idea of a finance bill that could help to enhance scrutiny and openness?

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 20 September 2022

Liz Smith

On that point, I think that we have accepted that there was a slight issue about scrutiny and, rightly, you have given the reasons for that. However, it raises a slightly wider point, which the DPLR Committee has raised with regard to other issues: namely, that if there is a problem about the timescale, because of recess or other factors, it is important that there is effective scrutiny. Can you assure us that that general issue of scrutiny of such technical matters will be dealt with by the Scottish ministers?

Finance and Public Administration Committee

Public Finances 2023-24 (Impact of Cost of Living and Public Service Reform)

Meeting date: 20 September 2022

Liz Smith

Thank you. It would be very helpful to have that information.

Finance and Public Administration Committee

Public Finances 2023-24 (Impact of Cost of Living and Public Service Reform)

Meeting date: 20 September 2022

Liz Smith

Continuing on the point that Ms Barbour made about public understanding of tax and willingness to pay, nobody likes paying tax, but I think that economists call it a “good tax” when people understand it, recognise what benefits it will produce and know how it is being spent.

That follows on from the question that the convener asked. If the devolved taxes working group was to be re-established, would you advise that we keep the remit of that group the same as it was the last time, or would you like the remit to be expanded to help with the business of understanding tax?

15:45  

Finance and Public Administration Committee

Public Finances 2023-24 (Impact of Cost of Living and Public Service Reform)

Meeting date: 20 September 2022

Liz Smith

That is interesting. You mentioned in your submission that you had noted the cross-party suggestions that we might have a finance bill. If we were to have a finance bill process, how would that articulate with the devolved taxes group? Do you see them working together or as being entirely separate?