‘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”.