Chamber and committees

I am sure that other consequentials are coming, there will be immediate requests for that money from various groups in the economy, and I am sure that that will be well spent.

I turn my attention to another two sets of important statistics. One is from the Scottish Fiscal Commission, which projects a shortfall of £190 million in tax revenue take for 2022-23, possibly rising to £417 million by 2026-27. We saw yesterday the report that came out from the Confederation of British Industry and KPMG, which had the productivity index.

Putting those together, we see that the tax take in Scotland is not as strong as we would like. That refers back to some of the comments that you made in answer to the convener’s questions. Let us also be frank that economic growth in Scotland is also not nearly good enough, and the productivity indices that were produced yesterday show some really worrying signs. I want you to give us an idea of what you think must happen to address some of the serious structural issues in the Scottish economy that are the reasons why we are behind not just other parts of the UK but most other regions.

[Inaudible.]—one of which follows on from that last question regarding personal security. Can I get some clarity on the timescale to which the SPCB will want feedback from members of the Scottish Parliament after they have sought advice from local police, which they were requested to do? When do you expect to get a good idea from members of the home security that they might require?

You are quite right to say that you cannot overspend: that is absolutely a legal requirement for the Government. Notwithstanding what you said in answer to my first question, there are choices to be made. When it comes to certain underspends, which were large in the health budget—you have explained about future requirements when it comes to vaccines and so on, which I absolutely understand—there are issues around infrastructure, transport and so on.

In a period when urgent economic assistance is required, people are quite rightly asking what has driven the choices when you hold some money back for the next set of financial payments. What drives those choices that you have to make? That is what I am trying to ask you: what do you absolutely prioritise when it comes to the underspend money?

That will be very helpful, because there are members who want a bit more guidance. The SPCB has done a very good job on the issue, and it was a very sensible recommendation for us to contact local police and so on for home visits. Lots of members would like to be able to feed back on those contacts and ensure that the SPCB can help them with some of the costs, hopefully in the not too distance future.

All three panellists have highlighted considerable extra expenses that the Parliament is having to cope with, including staff costs, security costs and on-going inflation. There are also some savings, as I can see from the numbers. What processes are there for the SPCB to estimate the changes in savings that will come about because of our changed working practices? For example, members’ travel expenses over the period of Covid were less than what they had been before, because we worked at home, as did our staff. What processes are there for the SPCB to project whether the change to working practices will be permanent, and to project what savings will accrue from that if it does? How can that be worked out?

I asked the question because there are people around the country who might ask why there is an underspend on the Scottish budget during a pandemic when businesses face serious issues. I think you said last week that you had spent absolutely every penny that you had to hand, but another £100 million appeared for business. Do you understand public concern about that £580 million being there but not being spent at a time when people have really urgent concerns?

This is my final question. The CBI-KPMG report is pretty blunt in certain areas. It flags up that we have huge educational potential and that the skills agenda has potential in terms of green jobs, and all that is good news. However, when it comes to the traffic light—red, amber or green—on how we compare with other parts of the UK in terms of what our short-term and long-term bases are, there are some really worrying statistics about our weakness in business investment, exports and in-work training. I suggest, cabinet secretary, that those are related to issues in the structure of the Scottish economy. Can you say a bit more about how you intend to deal with those concerns?

That leads into my final question, which is about the participation rates and the changing demography in the labour market. There are concerns, particularly in relation to the number of young people, who perhaps have more transferable skills for the future, coming into the market. To what extent do you feel that those are significant issues with regard to projections for the future?

I am thinking about two things in particular. It is quite clear that there are people who are able to work but are perhaps not able or willing to work in certain jobs. That is why the vacancy rate has stayed higher than we might have expected at a time when unemployment was supposed to rise. There is a skills mismatch, and we might need policies to address that.

Do we also need education policies that allow younger people in particular to get a wider range of skills, so that they are more flexible in the jobs that they can do? We have seen increasing flexibility over the years, but do we have sufficient flexibility to fill some of the gaps?

You could end up as a politician.

I thank the witnesses for giving us a bit more information about the trends.

You have been predicting a fall in income tax receipts; I want to ask, first, about data. Economists talk about the Laffer curve. The Laffer curve has been a bone of contention politically, but it is important, because it is the relationship between the tax rate and the revenues that are actually collected. In your updated data, do you have information about taxable income elasticity—in other words, the change in taxable income in response to changes in the rate of taxation? The issue is obviously important for policy; do we have good data on it?