New summary statistics have been released today on household income for the UK, including Scotland, covering the period up to the 2018/19 financial year. These figures belong to the pre-COVID-19 world but should not be dismissed as irrelevant. They provide a picture of the underlying health of household finances going into this current crisis.
Category: Fiscal Policy
The Scottish Government says that income tax policy changes since 2016/17 have been ‘highly redistributive’ and have ‘protected low income earners’. But how much of this affect can be attributed to the Scottish Government’s rates and band changes, and how much to the UK Government’s Personal Allowance changes? And how does the story about the distributional impact of recent policy decisions change if we incorporate other taxes (council tax) or social security spending?Continue reading
On Thursday, Mr Mackay will present his fourth budget – the penultimate budget before next year’s elections.
The budget will be delivered against the backdrop of the UK’s recent departure from the EU, significant frictions between both governments on issues ranging from constitutional change to budget timing, devolution of major new social security powers, and a weak outlook for the economy.
So what are the key points to look out for?Continue reading
Earlier this week, Scottish Conservatives leadership candidate Jackson Carlaw committed to close the income tax gap between Scotland and rUK for those earning between £27,000 and £45,000.
The majority of individuals with income in this range (those with incomes less than £43,430) currently face annual income tax liabilities of up to £150 higher than equivalent counterparts in rUK. But this difference increases rapidly beyond £43,430, reaching £500 at incomes of £45,000 (Chart 1).Continue reading
This blog post contains the policy context chapter of our economic commentary, published today. The latest economic commentary can be found here.
Budget 2020/21 will be the fourth of five to be set in this parliament. Normally of course it would have been published by now – the Scottish Government initially planned to publish it on 12 December – and the process of scrutiny and debate on the proposals contained within it would have begun.
It was inevitable that the announcement of a UK General Election on 12 December resulted in the postponement of the Scottish budget. The outlook for the Scottish budget – and the viability and outcomes of tax and spending policies – is heavily dependent on UK Government policy decisions.
A Scottish budget published in advance of knowing the complexion of the UK Government would have had to be underpinned by a range of caveats and uncertainties, and could have been subject to substantial revision once the UK Government’s plans became known with greater certainty.
The fact that the General Election result last week was so decisive has in a blink lifted much of the uncertainty that it existed, at least in the short run (i.e. for 2020/21).Continue reading