The Fraser of Allander Institute – in association with ICAS – held a post-Spring Budget briefing today (March 10) at the University of Strathclyde.
The presentations from Director, Graeme Roy and Head of Fiscal Analysis, David Eiser, outlined how the revised forecasts for both the economy and borrowing were largely temporary – with the UK Government still on track to borrow around £100bn more over the forecast period than they thought prior to the EU referendum.
These borrowing forecasts are not that dissimilar to those put forward by the SNP during the UK 2015 General Election.
The presentations also discussed developments in the Scottish Budget, including the decision to freeze the higher rate threshold in Scotland and the additional one-off resources found to finance the deal between the Scottish Government and the Green Party to pass 2017-18 Budget.
A key part of this deal was the use of around £125 million of underspend from 2016-17 – the exact same amount of money transferred to the Scottish Government in Barnett consequentials in Wednesday’s Budget.
Charlotte Barbour – Head of Tax at ICAS – talked through the key tax changes facing businesses and individuals in Scotland as a result of changes by the UK and Scottish Governments. These reforms and policy decisions mean that different incentives – such as the decision for certain people to be self-employed or set up as an incorporated businesses – could become an increasingly important but as yet unknown factor in determining future Scottish tax revenues. Such tax inventive changes, alongside potential behavioural responses, need to be closely monitored.
Source: Fraser of Allander Institute