Image source, bbc

SNP MSP Ivan McKee says the SFC forecast £5m will be lost due to behavioural changes.

David Wilson from the Scottish Fiscal Commission says for somebody earning over £150,000, even if they reduced the amount of time they work the maximum they could save would be limited.

Mr Stone says the government says the public sector award will apply to 260,000 public sector workers, but not local government workers.

Green MSP Patrick Harvie asks whether increased income tax revenue from a local government pay settlement would be in addition to the estimated £7m.

This is confirmed.

Tory MSP Alexander Burnett asks about the behavioural impacts and people potentially leaving Scotland.

SFC commissioner David Wilson says the behavioural impact on the new policy is expected to be more modest than the original proposals.

He explains this is because changes for high tax payers are more likely to create an incentive to adjust tax affairs, but the new proposals impact a larger number of people in a more limited way.

Tax payments are expected to increase around £170, not considered enough to have a behavioural impact, he states.

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In December we reported that Scotland's economy was facing "subdued" growth over the next five years, according to the Scottish Fiscal Commission.

The independent body had predicted the Scottish economy will grow at less than 1% per year until 2022.

Its five-year forecast suggested GDP growth will be 0.7% in both 2017 and 2018, rising to 1.1% in 2022.

It said the outlook was "driven by slow productivity growth and exacerbated by demographic challenges".

The commission's economic forecasts were published alongside the Scottish government's draft budget for the first time.

Read more here.

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David Stone from the Scottish Fiscal Commission says the starting point for the forecast is the survey of personal incomes.

Committee convener Bruce Crawford asks what Mr Stone means by the public sector.

Mr Stone explains how the public sector wage growths are collated.

SFC commissioner Professor Alasdair Smith says the changes to the budget total an additional £137.8m in spending commitments.

The supplement to the SFC's December forecast was published yesterday, he says.

The additional spending will be funded from tax revenues, Scottish reserve draw-down and underspend, but will not rely in borrowing, Professor Smith says he expects Finance Secretary Derek Mackay to confirm with the committee later today.

Image source, SFC

Here is the revised forecast from the SFC., external

On 31 January 2017 during the Stage 1 debate on the Budget Bill, Finance Secretary Derek Mackay announced spending changes and his plans to amend the Budget Bill at Stage 2 accordingly.

Mr Mackay said he planned to raise additional income tax receipts to fund these spending changes.

In the Draft Budget proposals, a higher rate of tax was set at 41% on earnings between £44,273 and £150,000.

This higher rate threshold will now start on earnings above £43,430, and is expected to result in additional revenue of £55m relative to the plans in the Draft Budget.

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The Scottish Fiscal Commission’s revised forecasts were published on Tuesday 6 February.

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Finance and Constitution Committee , externalconvener Bruce Crawford introduces:

• Professor Alasdair Smith from the Scottish Fiscal Commission, external
• David Wilson from the Scottish Fiscal Commission
• John Ireland from the Scottish Fiscal Commission
• David Stone from the Scottish Fiscal Commission

They are here to give evidence on the commission's revised forecast.

Read the committee papers here., external

Image source, PA

Finance Secretary Derek Mackay will call on MSPs to back his amendments to his budget, necessary to gain approval from the Greens.

Before that the committee will take evidence from the Scottish Fiscal Commission's revised forecast, again brought about by the budget deal.

Image source, Getty Images

Image source, BBC/PA/Getty

Good morning and welcome to Holyrood Live on Wednesday 7 February 2018.

The Finance Committee will take evidence from Finance Secretary Derek Mackay on the Budget Bill, considering amendments at Stage 2.

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Before that the Scottish Fiscal Commission will give evidence on its revised economic forecast.

Economy, jobs and fair work ministers and finance and constitution ministers are quizzed during portfolio questions.

Justice Secretary Michael Matheson will make a statement on undercover policing.

The government will then lead a debate entitled ‘Stemming the Plastic tide: Action to Tackle the Impact of Single-use Plastics on Land and in our Seas’.

Image source, Horseback UK

Tory MSP Liam Kerr will then lead a member’s debate highlighting the difficulty of veterans seeking help for physical or mental health problems, focussing on the work of the Aberdeenshire-based military charity, Horseback UK.