‘But whatever measure or comparison used, it is clear that the challenge to boost Scotland’s long-term rate of productivity shows no sign of disappearing. Back in 2007, the Scottish Government set a target to “rank in the top quartile for productivity amongst our key trading partners in the OECD by 2017”. It is clear that this target will be missed’.
‘Whilst there is clearly a negotiating advantage in the government holding back some monies as part of their tactics to get the Budget Bill through, one can see MSPs from now on assuming that £100 million is a useful ballpark for the amount the government may have ready to hand to push through a deal’.
‘… the challenge remains for Derek Mackay as to how best to balance his resource budget with major commitments like additional support for the NHS, more money for childcare and public sector pay uplifts all to be paid for.’
The upcoming budget debate is an important opportunity for policymakers from all sides to set out what they would do, yes on taxation, but also on expenditure and growth. The new income tax powers provide some measure of relief, but it’s far from the only game in town’.
‘Of course, it is possible to close this (budget) gap by explicitly reducing certain expenditures or by assuming higher tax revenues – either through increased rates or faster growth. Others will argue though, that in the context of independence, there may be additional costs. The debates will no doubt continue.’ And indeed they do…
‘Changing the constitutional set-up doesn’t alter the fact that these fiscal challenges need to be addressed by all governments in all countries. Today’s figures show that a more autonomous Scotland will be forced to meet such challenges sooner rather than later.
‘So all in all, whilst very welcome, we’d urge caution in dusting down the bunting and streamers just yet! There is much work still to be done if the Scottish economy is to fully make up recent lost ground’.
It is critical that both the UK and Scottish Government act to support the Scottish economy. Poor economic growth has implications for growth in jobs and wages, as well as the resources available to both governments to fund public services.
“This blog examines the recent trend in productivity in Scotland, and we unpick the numbers (3.5% rise in 2015) to see if they are as positive as would initially appear.” “..if policymakers are hoping that the recent statistics herald a new found surge in productivity in the Scottish economy then they are set to be disappointed”.