Question reference: S5W-23340
- Asked by: Alexander Burnett, MSP for Aberdeenshire West, Scottish Conservative and Unionist Party
- Date lodged: 22 May 2019
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Current status: Answered by Derek Mackay on 4 June 2019
Question
To ask the Scottish Government what assessment it has made of the impact of Brexit on consumer confidence in relation to VAT receipts in Scotland; whether it will clarify comments by its official at the Finance and Constitution Committee meeting on 8 May 2019 that VAT receipts in Scotland had been lower than in the rest of the UK due to household confidence being lower in Scotland than in the rest of the UK as a result of a higher rate of scepticism towards EU withdrawal in Scotland; what analysis it has undertaken to support that assessment; whether it can provide any evidence that this is the case when compared with London, which had a similarly high remain vote; whether it considers that VAT receipts are affected by consumer confidence in relation to constitutional issues, and what analysis it has undertaken of consumer and business confidence in relation to its policy of pursuing another referendum on independence.
Answer
The uncertainty relating to Brexit is impacting key economic indicators for Scotland with business and consumer sentiment surveys reporting notable falls in confidence.
The Scottish Government assesses consumer confidence through its Consumer Sentiment Indicator. The indicator is at its lowest reading since the series began in 2013 and has been negative since quarter 3 2016. In their latest forecasts, the SFC highlight that Brexit is likely to be a significant driver of this declining consumer confidence.
The Scottish Government does not hold comparable statistics on consumer confidence in Scotland and London. However, the latest OECD leading indicators data shows that consumer confidence has also fallen in the UK.
Forecasting VAT receipts is the responsibility of the Scottish Fiscal Commission.