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Evidence Heard On Scottish Fiscal Commission

by Amanda Banks,, London

10 January 2014

Scotland's Finance Committee has heard evidence on the creation and remit of the new Scottish Fiscal Commission, which will support the forecasting of revenues from taxes that that are being devolved to Scotland.

The body will initially be responsible for Scotland's Landfill Tax and Land and Buildings Transaction Tax, and for the devolved Income Tax, although its role will expand should there be further devolution and if Scotland votes for independence later this year.

The Committee asked whether the body would make its own revenue forecasts, or provide comment on those made by Government. Finance Minister John Swinney told the Committee that he was waiting for the conclusion of the Committee's enquiry before making his decision about the body's exact function, although he said that he did not want its work to duplicate or intrude on the remit of other bodies.

He added that he was open to the suggestion that the body should also work on the forecasting of non-domestic rates, but that he was "hostile" to the idea of it forecasting council tax revenues, on the grounds that this would intrude on the remit of local government.

Swinney also explained that the body will be proportionate to the devolved taxes with which it will be dealing, and that it would not require significant resources. Caroline Gardner, who is the Auditor General for Scotland, told the Committee that it was too soon to give costings should the body have responsibility for creating forecasts, but that examples from other countries show that it can be done.

Asked whether there were sufficient experts to do the work, Swinney said that he was "confident" that there were enough individuals in Scotland, but that it should also be possible to recruit from outside Scotland.

Both he and Gardner said that appointments should be limited to a set term in order to maintain independence, although timed in such a way that there was continuity. Swinney also argued against the Commission being able to appoint its own members, as he felt this would not give proper account of Scotland's democratic structures.

Swinney also expressed confidence that the data and material was available to make appropriate forecasts, but added that the UK Government legislation included a transitional period as regards the Scottish rate of Income Tax, as it would take time for estimates to "settle down."

As regards the timeframe, Swinney said that he would have to move swiftly once the Committee had finished its work, and that the Commission would be established as "quasi-statutory" ahead of the legislation that would give it on a statutory basis.

TAGS: economics | revenue guidance | government committee | budget | United Kingdom | revenue statistics

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