- Asked by: Tom Mason, MSP for North East Scotland, Scottish Conservative and Unionist Party
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Date lodged: Thursday, 28 June 2018
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Current Status:
Answered by Derek Mackay on 17 July 2018
To ask the Scottish Government what evidence it has to support its claim in Scotland's Fiscal Outlook, The Scottish Government's Five Year Financial Strategy that there is a "wider public acceptance" of the income tax policy changes in the 2018-19 budget.
Answer
Polling by YouGov for the Times showed that more than half of Scots support our income tax changes. When asked if they supported the income tax changes announced at the Budget, 54% of respondents said they supported the change, and only 27% did not. That is double the number of respondents supporting the policy change than not.
- Asked by: Tom Mason, MSP for North East Scotland, Scottish Conservative and Unionist Party
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Date lodged: Thursday, 28 June 2018
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Current Status:
Answered by Derek Mackay on 17 July 2018
To ask the Scottish Government for what reason it has not split, or planned to split evenly, its capital borrowing repayments for the capital borrowing that took place, or is planned to take place, in 2017-18, 2018-19 and 2019-20 over each respective payback period, and for what reason its approach in these years prioritises smaller repayments at the beginning of repayment periods, with larger repayments required later on in the repayment period.
Answer
The Scottish Government borrowed in 2017-18 using the Equal repayments (ER) method - an annuity profile of equal annual payments, hence varying levels of principal and interest (in the earlier years more interest and less principal is paid and vice versa in the latter years of the loan). This method is allowable under the Borrowing Memorandum of Understanding agreed between Scottish Government and HM Treasury. Decisions on repayment method have yet to be taken for 2018-19 and beyond.
- Asked by: Tom Mason, MSP for North East Scotland, Scottish Conservative and Unionist Party
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Date lodged: Thursday, 28 June 2018
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Current Status:
Answered by Derek Mackay on 17 July 2018
To ask the Scottish Government, further to the answer to question S5W-15800 by Derek Mackay on 17 April 2018, and in light of its indication that decisions on how to spend capital borrowing are not made at the time of the budget, for what reason the agreed repayment period for capital borrowing that will occur in 2018-19 and 2019-20 is confirmed as 25 years, when the Fiscal Framework states that 10 years is the normal period, subject to specific information regarding the asset life of the capital project.
Answer
No borrowing has yet been undertaken in 2018-19 or 2019-20 therefore repayment periods have not been agreed. Where the lives of the assets being purchased through the loan justify longer terms, these can be agreed as set out in paragraph 60 of the Fiscal Framework.
- Asked by: Tom Mason, MSP for North East Scotland, Scottish Conservative and Unionist Party
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Date lodged: Thursday, 28 June 2018
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Current Status:
Answered by Derek Mackay on 17 July 2018
To ask the Scottish Government on what basis it claims in the Scotland's Fiscal Outlook, The Scottish Government's Five Year Financial Strategy that Scotland has the "most attractive business rates package in the UK".
Answer
Scotland provides the most competitive non-domestic rates reliefs package available anywhere in the UK and is worth a record £720 million, up from £660 million in 2017-18, which includes several measures that are unique to Scotland. The Small Business Bonus Scheme (SBBS) has lifted over 100,000 properties out of rates altogether in 2017-18 and has saved businesses over £1.5 billion cumulatively since 2009. The package of measures also includes the UK’s first targeted 100 percent rates relief for nurseries which was introduced from 1 April 2018, along with the growth accelerator and relief for new unoccupied builds which supports investment in non-domestic property.
These measures have been welcomed by businesses the length and breadth of Scotland.
- Asked by: Tom Mason, MSP for North East Scotland, Scottish Conservative and Unionist Party
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Date lodged: Friday, 22 June 2018
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Current Status:
Answered by Derek Mackay on 16 July 2018
To ask the Scottish Government what its position is on the Scottish Fiscal Commission's view that the government spending component of aggregate demand will be reduced significantly when the capital borrowing limit of £3 billion is reached and it can no longer borrow at its current levels.
Answer
The Scottish Government’s capital borrowing powers are constrained by the UK Government. Future borrowing availability is a key element taken into consideration as part of Scottish Government financial strategy. The Scottish Government will continue to try to maximise investment and seek alternative funding sources within sustainable levels.
- Asked by: Tom Mason, MSP for North East Scotland, Scottish Conservative and Unionist Party
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Date lodged: Friday, 22 June 2018
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Current Status:
Answered by Derek Mackay on 16 July 2018
To ask the Scottish Government what its position is on the Scottish Fiscal Commission’s statement in its recent forecast report that the growth of real disposable household income is "the main determinant of aggregate consumption".
Answer
Real Disposable Household Income is the largest determinant of aggregate consumption. However, other factors, such as household wealth or population growth, can also have an important impact. The Scottish Fiscal Commission is clear that leaving the EU is expected to reduce future population growth in Scotland, which will directly reduce the growth rate of aggregate consumption.
- Asked by: Tom Mason, MSP for North East Scotland, Scottish Conservative and Unionist Party
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Date lodged: Friday, 22 June 2018
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Current Status:
Answered by Derek Mackay on 16 July 2018
To ask the Scottish Government what its position is on whether a relatively weak pound over the last two years has been the driving factor in an improved net trade position for Scotland.
Answer
Quarterly National Accounts Scotland (published 2 May 2018) shows that during 2017, Scotland’s net trade position improved, driven by a net-trade surplus with the Rest of the World. The net-trade surplus with the Rest of the World was driven by an increase in international exports. This has been supported by both the relatively lower value of Sterling, which has been a feature since the EU Referendum, and stronger growth in the global economy.
- Asked by: Tom Mason, MSP for North East Scotland, Scottish Conservative and Unionist Party
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Date lodged: Friday, 22 June 2018
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Current Status:
Answered by Derek Mackay on 16 July 2018
To ask the Scottish Government for what reason Scotland’s real household disposable income growth is reportedly 0.5% behind the UK average.
Answer
As highlighted by the Scottish Fiscal Commission’s latest report, the growth rate of Real Disposable Household Income (RDHI) is influenced by a range of macroeconomic trends. In particular differences in population growth rates are an important determinant in the difference between the growth rate of RDHI between the UK and Scotland.
The Scottish Fiscal Commission go on to forecast that any gap between Scottish and UK RDHI on a per capita basis (controlling for differences in population growth) will narrow and then close over the next two years.
- Asked by: Tom Mason, MSP for North East Scotland, Scottish Conservative and Unionist Party
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Date lodged: Friday, 22 June 2018
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Current Status:
Answered by Derek Mackay on 16 July 2018
To ask the Scottish Government, in light of non-savings, non-dividend (NSND) income tax forecasts being revised down by £1.74 billion in the years up to 2023-24, what its position is on whether pursuing an income tax policy that is estimated to result in a loss in revenue in the same period of £292.17 million due to behavioural responses and almost £2.1 billion due to tax-motivated incorporations is a sustainable way to manage the economy.
Answer
The SFC’s report, Table 3.5, clearly states that the main reason for their downgrade in income tax receipts is a change in their projections for wage and employment growth. There is no evidence that would suggest our income tax policy is leading to a downgrade in forecasts. In their December report the SFC note that the income tax policy is “not of a large enough magnitude to have a significant aggregate impact on the Scottish economy” (page 76). The SFCs reports can be found here: http://www.fiscalcommission.scot/media/1196/scotlands-economic-fiscal-forecasts-publication.pdf and here: http://www.fiscalcommission.scot/media/1314/scotlands-economic-and-fiscal-forecasts-may-2018-full-report.pdf
- Asked by: Tom Mason, MSP for North East Scotland, Scottish Conservative and Unionist Party
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Date lodged: Friday, 22 June 2018
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Current Status:
Answered by Derek Mackay on 16 July 2018
To ask the Scottish Government what its position is on it nearing its capital borrowing limit of £3 billion.
Answer
The Scottish Government is committed to ensuring that revenue funded investment, including borrowing, is maintained at sustainable levels and as a result future revenue commitments will be kept within a maximum of 5% of available budget limits. When taking account of borrowing undertaken to date and borrowing anticipated in 2018-19, £1.5 billion of the £3 billion borrowing limit still remains available.