Image source, bbc

Dame Susan Rice explains forecasting is not an exact science.

She says the SFC's Forecast Evaluation Report is the first to be published.

The SFC chair states this is the first release of outturn data and "represents something of a milestone in the devolution story".

Dame Susan tells the committee there was a £550m gap between the forecast of income tax paid in Scotland and actual outturn.

She explains there should be no direct impact on the budget.

Douglas Fraser
Scotland business & economy editor

• There was a £550m gap between forecast of income tax paid in Scotland, and actual outturn.
• Estimates are based on ropey data, making budgeting more difficult.
• Strengthened economic growth figures for the past year are unlikely to lead to stronger growth forecasts.

Image source, Getty Images

There aren't as many higher-earning Scottish taxpayers as we thought. That doesn't mean they've deserted the country, for fear of higher tax bills.

It is more likely to mean that they weren't really there in the first place.

The result is an alarmingly large gap between the forecast for income tax set out by the Scottish Fiscal Commission for the 2016-17 year, and the actual outturn figure.

They said it would be around £11.3bn. It came in at £10.7bn. The £550m gap was 5%, which would have made quite a dent to the Scottish government's budgeting if it had been passed on directly.

Read more here.

• Full report: Scotland's Economic and Fiscal Forecasts May 2018, external
• Full report: Forecast Evaluation Report Summary September 2018, external

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Mr Crawford introduces:

• SFC chair Dame Susan Rice
• SFC commissioners professor Alasdair Smith
• SFC chief executive John Ireland

MSPs will now take evidence from the Scottish Fiscal Commission, external on its Forecast Evaluation Report.

The SFC’s Forecast Evaluation Report (FER), external looks at the in-year forecasts made for 2017/18 for GDP (and LBTT, Landfill Tax and Non-Domestic Rates).

The report fulfils the SFC’s statutory obligation to evaluate its forecasts once per year and marks the first opportunity it has had to evaluate its own forecasts published in December 2017 and May 2018.

Image source, SFC/BBC

MSPs will quiz:

• SFC chair Dame Susan Rice
• SFC commissioners rofessor Alasdair Smith
• SFC chief executive John Ireland

.....................don't panic, it's still Wednesday! This is the turn of Scotland's children to put their questions to the first minister, in the inaugural FMQT Next Generation.

Tory MSP Murdo Fraser highlights support for Chequers from CBI Scotland, NFU Scotland, the Fishermen's Federation and others.

Why is the Scottish government not listening, he asks.

Mr Russell says he will continue to argue for the best possible deal for Scotland and insists the Chequers deal will not work.

Mr Fraser asks what SNP MPs will do if Chequers goes to parliamentary vote.

The more likely vote will be between a "blind Brexit" or "the madness of just opting out", argues the cabinet secretary.

The first evidence session today draws to a close, but don't go away the Scottish Fiscal Commission are up next.

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On 15 May 2018 the Scottish Parliament refused to give its consent to the UK's main piece of Brexit legislation.

The Scottish and UK governments are at odds over the EU Withdrawal Bill and what it could mean for devolved powers.

Labour, Green and Lib Dem MSPs united to back SNP members in rejecting the Westminster bill, saying it would restrict Holyrood's powers.

The Scottish Conservatives voted against, and have blamed the SNP for the failure to find an agreement.

MSPs voted by 93 to 30 that Holyrood "does not consent to the European Union (Withdrawal) Bill".

Westminster ultimately has the power to introduce the legislation without the consent of Holyrood - but it would be politically difficult, and has never been done before.

• How significant is this vote?
• What is the row all about anyway?
• Look back on the debate on Holyrood Live

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Labour MSP James Kelly asks what assessment has been made of the impact of Brexit on the Scottish budget.

Mr Russell argues there is a macro publication of the impact on Scotland.

The Brexit secretary says he cannot say what the situation will be with the forthcoming budgets, however his colleague Derek Mackay is looking into this issue.

If there is a no-deal Brexit then clearly there would be immediate costs which would be very difficult to quantify, explains Mr Russell

Image source, Getty/PA

Leaving the EU without a deal would "result in chaos" despite work which has been done to prepare, Scottish Brexit minister Mike Russell has said.

Mr Russell told MSPs that work was being done to be ready for the "worst case scenario" of a no-deal exit.

He said the least damaging approach would be for the UK to remain in the single market and customs union.

The Scottish Conservatives said this "empty posturing" had been contradicted by "good news" from the negotiations.

Michel Barnier, the EU's chief Brexit negotiator, said on Monday that there could be an agreement on the terms of the UK's exit by early November, if both sides were "realistic".

However, on the same day, Brexiteer MPs warned Prime Minister Theresa May that they were not prepared to back her plans.

• Look back on the statement on Holyrood Live
• Read more here

Tory MSP Adam Tomkins asks what was meant yesterday when the cabinet secretary said the Scottish government would "have nothing to do with" the EU Withdrawal Act.

"The EU Withdrawal Act is the law of the land whether we like it or not."

The Brexit secretary explains the Scottish government will refuse to cooperate with the section 12 orders.

Mr Tomkins asks whether it is "normal" that the Scottish government said it will have nothing to do with the law of the land.

In the context of what has happened, it is not only normal but necessary, with a few exceptions, Mr Russell responds.

Mr Tomkins seeks further clarity on what is meant by this but none is forthcoming.

Image source, bbc

Mr Harvie continues focusing on common frameworks, turning to the environment.

There have been calls for UK wide environmental watchdog to take on some of the functions that are currently held at the EU level, he explains.

"What agreement has been reached on these issues?"

Mr Russell pledges to write to the Green MSP about that.

Convener Bruce Crawford turns conversation to common frameworks, noting the Scottish secretary last week would not guarantee these would not be imposed.

Mr Russell says the Scottish government will continue to engage on the frameworks as long as it is done via joint working.

Where there is imposition, the Scottish government will not cooperate he states.

There is progress on the frameworks but there are issues which will arise around legislation and consent, the Brexit secretary adds.

Image source, PA

Mr Harvie returns to the fray and asks in the absence of the up front comment that circumstances are not normal then Holyrood will never know if its consent will be respected.

Mr Russell again says the UK government have acted against the spirit of Sewel.

SNP MSP Angela Constance pivots to the related topic of intergovernmental relations and refers to Westminster's constitutional affairs committee saying UK ministers should engage more and set out policies more clearly.

MPs insisted the UK government "must rethink devolution" as a result of Brexit.

The Scottish government has also called for a "new arrangement" for devolution in light of the recent Brexit rows.

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Mr Russell responds to Ms Constnance's questions calling for equality between the governments going forward and warns that imposing frameworks on Scotland would be "anathema".

He cites proposals from the devolved nations to improve things, but insists there "are no ideas from the UK government".

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Scottish Secretary David Mundell told the committee last week there had been a number of developments since May, one of the most significant being the passing at Westminster of the EU Withdrawal Bill.

Mr Mundell added he deeply regreted the Scottish Parliament was unable to give consent to this legislation.

He insisted the UK government had worked well with the Scottish government in the past and he hopeed this continue.

Mr Mundell insisted a no-deal Brexit is a "very unlikely event".

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Committee convener Brue Crawford repeatedly asked for a guarantee that there will be no common frameworks imposed in the future.

To this the Scottish secretary repeatedly argued the UK government wanted to reach agreement on the frameworks.

Somewhat of an impasse, but for more reports on last week's committee click here.

Mr Tomkins says Mr Russell conceded that these are "not normal times" when utilising an emergency route for the Scottish continuity bill.

The cabinet secretary says: "It doesn't matter what I think at all".

He insists that ignoring consent at the end of the process was the key issue and it was this that broke the spirit and letter of Sewel.

Image source, bbc

The word "normally" is, of course, an important caveat that is open to different interpretations - is Brexit "normal", for example?

Scottish Secretary David Mundell has in the past said these were not normal times.

Consent is sought through something known as the Sewel Convention, named after former Labour government minister Lord Sewel, which, in effect, allowed the UK government to ask MSPs for permission to change the law in an area that is devolved to Holyrood.

Similar conventions apply in both Wales and Northern Ireland.

However, as its name suggests, it is merely a convention and there is no legal requirement for the UK government to seek Holyrood's permission - or to respect its decision if it says "no".

So the interpretation of what "not normally" actually means will be crucial going forward.

Image source, bbc

Tory MSP Adam Tomkins asks about the disagreement in views between the two governments about the Sewel convention and the passing of the EU Withdrawal Act.

Mr Tomkins says he and the cabinet secretary are both disappointed Holyrood did not provide legislative consent for the Act.

He moves on to say the UK government will not "normally" legislate without consent of the Scottish Parliament and goes on to ask how the UK government's actions have breached the Sewel convention.

Mr Russell explains if there had been a declaration by the UK government that it would not seek consent because the circumstances were "not normal" he would have to have accepted this.

The Brexit secretary says the UK government requested consent and only when that consent was not given that "created the lack of normality".

Green MSP Patrick Harvie asks about legislation on embedding a consent mechanism, noting it was not included in the programme for government last week.

We cannot embed it in our own legislation, explains Mr Russell, but a set of ideas are being put to the UK government to allow for the continued operation of Sewel.

We need a process which defines when consent is or is not required embedded in law, he argues.

Mr Russell confirms he is meeting with other parties this afternoon to further discuss this.