What is the case for increasing council tax rates in Scotland?

This blog shows that council tax rates are now markedly lower in Scotland than in England and Wales. Increasing council tax in Scotland to match rates in Wales (or England) would raise substantial revenues, but would have adverse distributional implications. On balance, the case for more fundamental reform of property taxation would appear much stronger than the case for increasing rates within the existing system.

Differences in income tax policy between Scotland and rUK have been the subject of heated debate. There has been relatively little attention paid to differences in council tax policy in Scotland compared to England and Wales. But in some ways, the differences in council tax policy are more pronounced than they are for income tax.Continue reading

May 22, 2019

May Scottish Economy Nowcasts

This morning the latest UK data for growth in Q1 2019 were released. These put UK growth at 0.5% in Q1, with growth in production, construction and service sectors.

In this blog we release our nowcasts of the Scottish economy in Q1 2019 and Q2 2019.

The UK numbers were stronger than growth in the previous quarter (which was a disappointing 0.2%), and stronger than might have been expected.

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May 10, 2019

Brexit uncertainty and the Scottish economy: Is winter coming?

Last week the Governor of the Bank of England warned that Brexit has created a “high level of uncertainty” and “companies are holding back on making big decisions”.

Earlier this month, the Bank cut its growth forecast to just 1.2% for 2019. If this turns out to be correct, this will be the slowest year of growth since the financial crisis.

Not all of this is down to Brexit.

Some of the revision reflects a weaker global economic outlook – with data out last week showing that Germany has just avoided entering recession by the narrowest of margins.

With the data pointing to a lowing UK economy, what is the latest data telling us about how well the Scottish economy is holding up?Continue reading

February 18, 2019

Today’s Scottish GDP growth figures – the calm before the storm?

Today’s Scottish GDP figures – for the 3-month period to September 2018 – showed a further pick-up in economic activity in Scotland. The Scottish economy expanded by 0.3% over the 3-months to September (Q3). This followed growth of 0.5% in quarter 2 and 0.4% in quarter 1.

The economy has been growing on a continual basis for five consecutive quarters, the most sustained period of growth in a long-time. However, growth remains below trend, with output lower than UK growth of 0.6 this quarter.

In this blog we provide a quick summary of the key trends.

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December 19, 2018

Funding higher education tuition and maintenance support in Scotland – recent changes and ongoing debates

In addition to providing an overview of key issues facing the upcoming Scottish budget, each year our annual Scottish Budget report includes an in-depth analysis of specific fiscal policy issues. In this year’s report, one of the topics we looked at was higher education.

Our analysis did not make any recommendations, contrary to some media reports, but instead sought to:

• Consider the implications for Scottish graduates of recent changes to the terms of maintenance loans in Scotland;

• Understand what constraints the Scottish Government faces in determining how much loan it can offer to Scottish students, and on what terms; and

• Quantify the opportunity costs of the government’s current approach to funding higher education tuition. Continue reading

November 21, 2018