Scotland set to lag behind UK with growth below 1% until 2022
Growth will lag behind the rest of the UK at less than 1 per cent between now and 2022, according to the body which was set up by the Scottish Government to provide economic forecasting.
Its first report was published yesterday to coincide with the Scottish budget.
“Scottish economic growth has been slower over the last decade than historic average rates, and the Commission’s view is that pattern of slower growth is likely to persist over the next five years,” the report found.
The country is facing slow productivity growth and the situation is made worse by the ageing population.
Taxes collected by the Scottish Parliament will raise almost £16bn in the next financial year. But the struggling economy has meant that the predicted income tax take has fallen from £12.3bn to £12.1bn in 2018/19.
The Scottish government’s new five-band income tax system will raise an additional £164m in 2018-19, rising to £199m by 2022-23.
The new tax breaks for first-time buyers would reduce Land and Buildings Transaction Tax (LBTT) revenue by £6m in 2018-19.
It also estimated that policies on non-domestic rates announced in the draft budget would reduce tax revenues by £96m.