Meeting of the Parliament 14 January 2016
The minister would have been better to stay away from that example, because it contradicts what he said in his opening speech and what the Deputy First Minister said to us. We were told by the Deputy First Minister that changes to the forecasts would be publicly available, but that simply is not true. There was a dispute last year, but we do not know what the initial forecast for non-domestic rates was and, a year later, we do not know the magnitude of the change as a consequence of that disagreement; we were presented only with the final forecast. So, the minister’s own words make it clear that the changes to the forecasts are not made publicly available. Again, that is one of our problems with the bill as it stands.
On reasonableness, there is a low threshold. The Fiscal Commission also made it clear in writing to the committee that it looks not at the final numbers—the outputs—but purely at the methodology.
The second problem is that the minister has tried to suggest that the committee’s position of wanting the Fiscal Commission to do the forecasting is the outlier. However, that is not correct either, because the true outlier is the commission proposed by the bill.
Some fiscal institutes do official forecasts, some prepare their own unofficial forecasts and some rely on a number of different forecasts in order to reach their view. We would have the only fiscal commission on the planet that would rely solely on the official Government forecasts when looking at what we are likely to bring in. I could not find another example of such a fiscal commission. When I asked the Government for such examples, I was told that Sweden and Ireland were the examples to follow. However, we went to Sweden and found that that was incorrect, because the institute in Sweden examines at least six forecasts when deciding how much is likely to be brought in. Other committee members went to Ireland and found that the statement about the example there was not true either, because the Irish fiscal institute prepares not the official forecast but its own forecasts.
There are glaring weaknesses in the bill as it stands. On top of that, there is the issue of the lack of transparency. Okay, the Fiscal Commission will produce a report, but it was made clear to us by the Deputy First Minister himself that any disagreements between the SFC and the Scottish Government about numbers would remain private. The Scottish Government said that it would refuse to publish any earlier figures that show a disparity and any figures that explain in numerical terms what changes have been made. The Government wanted to show us only the final forecast and went as far as saying that it would try to prevent, if it could, the SFC from publishing of its own accord details of disagreements over numbers.
Under the bill, therefore, we would end up with only a certificate of reasonableness from the Scottish Fiscal Commission that we could not look into and examine carefully. That is why the committee reached the position of welcoming the bill and supporting it at stage 1 but stating that huge changes need to be made to it at stages 2 and 3.
That is the committee’s view on the bill, and I look forward to hearing the rest of the debate.