Chamber and committees

My final question is on paragraph 196 of the annual report, which says:

“The Scottish Fiscal Commission is not yet subject to the Public Sector Equality Duty”.

Can you explain why and what is happening there?

Did you suggest earlier that that is more of a challenge for the UK because our interest rates are more index linked? Are other countries different?

Is it about the choices that other—certainly, European—countries made? They did not do the same amount of quantitative easing but did more traditional debt.

I will ask you some of the same questions that I asked the first panel, so if you were watching, you will know what they will be.

My first question is on debt interest. I think that it was in March that the OBR forecast debt interest to be £94 billion. Now, it is saying that the figure will be £116 billion for 2023-24. When I asked the witnesses from the OBR about that, they just said that they follow the markets and that that is what the markets said. Should the OBR be able to forecast a bit more accurately on a figure like that?

Is there any backdating? Does revising the GDP deflator have any practical effect?

That is helpful. I will press you again on the practical impact of the GDP deflator. My understanding is that the Scottish Government uses it to measure factors such as how much it can borrow. However, the illustration that we are always given is inflation in the capital sector—for example, buying materials such as concrete and steel, which have been expensive. Am I right in thinking that the GDP deflator effectively constrains the amount of capital expenditure going forward, or is that a misunderstanding?

I will move on to another point. I believe that the concept of full expensing of fixed-asset expenditure covers only plant and machinery. How will that approach play out? As I understand it, there will be a short-term hit and then a longer-term advantage. Is that the plan?

My final question is on the tax burden, which is 4.5 percentage points higher than it was before the pandemic. How does that compare with other countries? Does that have an impact on our economy?

Okay. I think that I partly understand that. [Laughter.]

The GDP deflator has come up a few times in our committee. I noted that, for 2023, it was forecast to be 5.7 per cent and it is now 6.7 per cent. In practice, where does that impact? Does that make any difference?

On the question of the tax burden, we now seem to be at 38 per cent, or 37.7 per cent or thereabouts, which our previous witnesses said is nearly 4.5 percentage points higher than it was before the pandemic. However, it is a lot lower than the figure for France, which, it was suggested, was nearly 50 per cent. Should we be worried about that total figure, or is it how it is broken down that matters?