SELECT COMMITTEE ON ECONOMIC AFFAIRS The devolution of public finances in the United Kingdom Oral and written evidence Contents Sir Danny Alexander – Oral evidence (QQ 89-97) (DFPOE0008) ............................................ 4 Dr Angus Armstrong, NIESR; Professor David Heald, University of Aberdeen Business School; Professor Alan Trench, University of Ulster; Professor Jim Gallagher, University of Glasgow – Oral evidence (QQ 1 – 13) (DPFOE0001) ....................................................................................... 19 Charlotte Barbour, Institute of Chartered Accountants of Scotland (ICAS); Professor Gerald Holtham, Chair of the Holtham Commission; Tom Crotty, INEOS – Oral evidence (QQ 77-88) (DFPOE0007) ............................................................................................................... 20 Bevan Foundation – Written evidence (DPF0007) ..................................................................... 21 Constitution Reform Group – Written evidence (DPF0018) .................................................. 25 Dan Corry (Chief Executive, New Philanthropy Capital) and Dr Peter Kenway (Director, New Policy Institute) – Written evidence (DPF0013) ............................................................... 29 Carlo Cottarelli, former Director, Fiscal Affairs Department, International Monetary Fund (IMF) – Oral evidence (QQ 108-116) (DPFOE0009) ................................................................. 30 Tom Crotty, INEOS; Professor Gerald Holtham, Chair of the Holtham Commission; Charlotte Barbour, Institute of Chartered Accountants of Scotland (ICAS) – Oral evidence (QQ 77-88) (DFPOE0007) .............................................................................................. 45 Dr James Cuthbert – Written evidence (DPF0004) ................................................................... 46 Dr James Cuthbert – Supplementary written evidence (DPF0021) ........................................ 52 Dr James Cuthbert and Mrs Margaret Cuthbert – Written evidence (DPF0014) ............... 61 Dr James Cuthbert and Mrs Margaret Cuthbert – Oral evidence (QQ 38-46) (DPFOE0004) ....................................................................................................................................... 64 Mrs Margaret Cuthbert and Dr James Cuthbert – Written evidence (DPF0014) ............... 78 Mrs Margaret Cuthbert and Dr James Cuthbert – Oral evidence (QQ 38-46) (DPFOE0004) ....................................................................................................................................... 79 The Rt. Hon. Alistair Darling – Oral evidence (QQ 28-37) (DPFOE0003) .......................... 80 Professor Jim Gallagher CB FRSE, Nuffield College, Oxford, University of Glasgow – Written evidence (DPF0001) ........................................................................................................... 95 Professor Jim Gallagher, University of Glasgow; Professor David Heald, University of Aberdeen Business School; Professor Alan Trench, University of Ulster; Dr Angus Armstrong, NIESR – Oral evidence (QQ 1 – 13) (DPFOE0001) ....................................................................... 99 Professor David Heald, University of Aberdeen Business School; Professor Alan Trench, University of Ulster; Professor Jim Gallagher, University of Glasgow; Dr Angus Armstrong, NIESR – Oral evidence (QQ 1 – 13) (DPFOE0001) ..................................................................... 100 Her Majesty’s Revenue and Customs (HMRC) – Written evidence (DPF0024) ....................... 128 Her Majesty’s Treasury (HMT) – Written evidence (DPF0015) ............................................ 131 Professor Gerald Holtham – Written evidence (DPF0003) ................................................... 141 Professor Gerald Holtham, Chair of the Holtham Commission; Tom Crotty, INEOS; Charlotte Barbour, Institute of Chartered Accountants of Scotland (ICAS) – Oral evidence (QQ 77-88) (DFPOE0007) ............................................................................................ 147 INEOS; Professor Gerald Holtham, Chair of the Holtham Commission; Charlotte Barbour, Institute of Chartered Accountants of Scotland (ICAS) – Oral evidence (QQ 77- 88) (DFPOE0007).............................................................................................................................. 172 Institute of Chartered Accountants of Scotland (ICAS) – Written evidence (DPF0010) 173 Institute of Chartered Accountants of Scotland (ICAS); Professor Gerald Holtham, Chair of the Holtham Commission; Tom Crotty, INEOS – Oral evidence (QQ 77-88) (DFPOE0007) ..................................................................................................................................... 200 Institute of Economic Affairs – Written evidence (DPF0006) ................................................ 201 Peter Jones – Written evidence (DPF0020) ............................................................................... 239 Peter Jones and Lesley Riddoch– Oral evidence (QQ 47-55) (DPF0005) ........................... 259 Professor John Kay, London School of Economics (LSE); The Weir Group PLC; Professor Noel Lloyd CBE, Silk Commission – Oral evidence (QQ 98-107) (DPFOE0008)............. 260 Dr Peter Kenway (Director, New Policy Institute) and Dan Corry (Chief Executive, New Philanthropy Capital) – Written evidence (DPF0013) .............................................................. 261 Professor Noel Lloyd CBE, Silk Commission; The Weir Group PLC; Professor John Kay, London School of Economics (LSE) – Oral evidence (QQ 98-107) (DPFOE0008) ........... 265 Professor Ronald MacDonald BA MA (Econ) PhD OBE – Written evidence (DPF0022) 266 Professor Ronald MacDonald, University of Glasgow; Professor Adam Tomkins, University of Glasgow; Professor John McLaren, University of Glasgow – Oral evidence (14-27) (DPFOE0002) ...................................................................................................................... 273 Professor John McLaren – Written evidence (DPF0019) ........................................................ 292 Professor John McLaren, University of Glasgow; Professor Ronald MacDonald, University of Glasgow; Professor Adam Tomkins, University of Glasgow – Oral evidence (14-27) (DPFOE0002) ..................................................................................................................................... 295 Professor Iain McLean – Oral evidence (QQ 67-76) (DFPOE0006) ..................................... 296 David Phillips, Institute for Fiscal Studies (IFS) – Oral evidence (QQ 56-66) (DPFOE0006) ............................................................................................................................................................... 310 Plaid Cymru – The Party of Wales – Written evidence (DPF0008) ..................................... 326 PricewaterhouseCoopers LLP – Written evidence (DPF0023) ............................................. 331 Nicholas Ramsay – Written evidence (DPF0005) ..................................................................... 360 Scottish Government – Written evidence (DPF0016) .................................................................. 363 Lesley Riddoch and Peter Jones – Oral evidence (QQ 47-55) (DPF0005) .......................... 371 Socialist Health Association Cymru Wales – Written evidence (DPF0017) ....................... 380 Professor Adam Tomkins, University of Glasgow; Professor Ronald MacDonald, University of Glasgow; Professor John McLaren, University of Glasgow – Oral evidence (14-27) (DPFOE0002) ...................................................................................................................... 383 Professor Alan Trench (University of Ulster) – Written evidence (DPF002) .................... 384 Professor Alan Trench, University of Ulster; Professor David Heald, University of Aberdeen Business School; Professor Jim Gallagher, University of Glasgow; Dr Angus Armstrong, NIESR – Oral evidence (QQ 1 – 13) (DPFOE0001) .................................................................................. 390 The Weir Group PLC – Written evidence (DPF0012) ............................................................ 391 The Weir Group PLC; Professor John Kay, London School of Economics (LSE); Professor Noel Lloyd CBE, Silk Commission – Oral evidence (QQ 98-107) (DPFOE0008)............. 394 Welsh Government – Written evidence (DPF0011) ................................................................ 409 Welsh Liberal Democrats – Written evidence (DPF0009) ..................................................... 416 Sir Danny Alexander – Oral evidence (QQ 89-97) (DFPOE0008) Sir Danny Alexander – Oral evidence (QQ 89-97) (DFPOE0008) Evidence Session No. 8 Heard in Public Questions 89 - 97 TUESDAY 20 OCTOBER 2015 Members present Lord Hollick (Chairman) Baroness Blackstone Lord Forsyth of Drumlean Lord Griffiths of Fforestfach Lord Kerr of Kinlochard Lord Layard Lord May of Oxford Lord Monks Lord Sharkey Lord Teverson Lord Turnbull Baroness Wheatcroft ________________ Examination of Witness Sir Danny Alexander Q89 The Chairman: Sir Danny, thank you very much for joining us this afternoon. Thank you also for accommodating the slight change in the timing. We have a visitor this afternoon in the shape of the President of China. Sir Danny Alexander: Let me apologise for my voice. I was at Twickenham on Sunday and have not recovered from