GDP grew by 0.2% in the third quarter of 2017. (Scot Gov News Website)

Scotland’s economy has remained resilient going into the second half of 2017 despite a challenging economic environment and continued Brexit uncertainty, the Economy Secretary has said.

According to the latest GDP statistics published by the Scottish Government today, the Scottish economy grew by 0.2% in the third quarter of 2017, and has increased by a total of 0.8% since the start of the year.

In the latest quarter, Services grew by 0.2% and Production grew by 1.2% after a return to growth for both manufacturing, mining and quarrying.

Economy Secretary Keith Brown said:

“Despite the impact that continued Brexit uncertainty is having on our economy, today’s figures demonstrate the resilience of the Scottish Economy with the third consecutive quarter of positive growth.

“Although more modest than we would like, it is encouraging to see the economy grow by 0.2% overall. Within this, it’s particularly heartening to see Services continue to expand, and Production up by 1.2%, with a return to growth for manufacturing. While these figures show a fall in construction output, this is as a result of activity returning to more normal levels following our increased investment in large transport infrastructure developments over recent years, including the Forth Replacement Crossing, M8 missing link and the Borders Railway.

“Our determination to seize opportunity and grow our economy is demonstrated by the £270 million increase on economic spending we announced in the 2018/19 Draft Budget. However it cannot be stressed enough that the single biggest threat to our economy as a whole remains the lack of clarity from the UK Government over Brexit. This week the Scottish Government published analysis which showed that failure to remain in the Single Market or secure a free trade agreement would see Scotland’s GDP around £12.7 billion lower by 2030 than it would be under continued EU membership.

“I would once again call on the UK Government to give people and businesses greater certainty over the Brexit process in order to further stimulate growth in Scotland’s business communities and allow us to continue to attract and retain talent within our workforce.”

Article Source: news.gov.scot/news/scotlands-economy-continues-to-grow-1

“Continued membership would maintain labour force” – Russell

Staying within the Single Market is vital for securing Scotland’s future workforce, Minister for UK Negotiations on Scotland’s Place in Europe Michael Russell said today.

(Article via www.gov.scot)

Mr Russell visited Stoddart’s beef processing company in Broxburn, West Lothian and heard from the Managing Director about concerns over the future ability to access EU Nationals to work for the company. They also discussed concerns around continued tariff free access to the EU market for beef products, especially the Scotch Beef PGI brand.

Mr Russell said:

“A hard Brexit and the end of freedom of movement will create the very real risk that the number of people working in Scotland will fall.

“That will mean fewer tax-payers to support vital public services and many sectors of the economy will struggle to attract the workers they need.

“It is essential we remain a member of the Single Market and Customs Union. Many companies benefit from our fellow EU nationals’ work as well as having access to the world’s most lucrative market.

“The Scottish Government continue to push for continued membership, not just as part of a transition deal but as the final destination, so securing the future of our workforce and protecting access to valuable markets.”

Managing Director of Stoddart’s Grant Moir said:

“Scotland has to compete with the rest of Europe in its bid to attract people into the workplace. Following the initial Brexit announcement this has become an increasingly challenging task for many Scottish Food and Drink businesses.

“At Stoddart’s we depend on a large number of EU Nationals to make up our workforce without whom we would be unable to run our business at its current level. One third of our processing staff are non-UK EU nationals highly skilled in meat processing.

“Any restriction of freedom movement as a result of the Brexit negotiations will in my opinion be hugely detrimental to both our business and the wider Scottish Economy.

“Recruitment and retention of our EU National workers will remain our single biggest business challenge for the immediate future”

Chief Executive of Quality Meat Scotland, Alan Clarke, said:

“Having access to a pool of skilled labour is essential to ensure that the Scottish red meat sector can have sustainable growth. Non UK nationals are of fundamental importance throughout the red meat supply chain, especially in the processing sector, for example, in respect of statutory food safety inspection and monitoring carried out in Scottish processors, Food Standards Scotland report that around 98% of their official veterinarians are from outside the UK.”

Article Source: https://news.gov.scot/news/keeping-scotland-in-the-single-market

A 28% funding increase will help deliver at least 50,000 affordable homes over this Parliament, as announced in the Draft Budget by Finance Secretary Derek Mackay

(article via www.gov.scot)

In 2018/19, more than £756 million will be made available through the Affordable Housing Supply Programme – 28% higher than the previous year. The programme is expected to support up to 14,000 jobs in the construction and related sectors over the next four years.

The Draft Budget commitment follows statistics showing some 71,000 affordable homes have been delivered since 2007. This includes almost 49,000 homes for social rent, 5,000 homes for affordable rent, and more than 17,000 homes for affordable home ownership.

Communities Secretary Angela Constance said:

“Ensuring everyone has access to a safe, warm and affordable place to call home lies at the heart of our ambition for a fairer Scotland – this budget will deliver on that.

“Core to that is our commitment to deliver at least 50,000 affordable homes over this Parliament. While that is challenging, we have shown before that we can deliver.

“Overall, this funding delivers on our More Homes Scotland approach – increasing supply across all tenures, supporting aspiring home owners, and boosting the economy. We have reintroduced council house building, supported first-time buyers, invested in shared equity, and introduced innovations like the Rental Income Guarantee Scheme and bringing empty homes into ownership.

“This builds on our commitment to work with councils and housing associations to ensure they have the financial certainty to increase developments. We will continue working closely with them and others as we take action to deliver good quality, secure, affordable housing.

Article Source: https://news.gov.scot/news/building-a-fairer-scotland

Prioritising rural Scotland

(article via www.gov.scot)

The first phase of the £600 million ‘Reaching 100%’ broadband programme will focus on delivering superfast broadband access to Scotland’s rural and island communities, to provide a truly national fibre network.

The procurement will be made up of three regional Lots (North, Central and South), with each containing a mix of the commercially attractive rural areas and harder-to-reach communities.

This model has been designed to ensure the best possible chance of maximising competition whilst driving value and innovation.

Connectivity Secretary Fergus Ewing said:

“We have taken the decision not to focus on urban city centre premises in this first phase, but to target investment where it is needed most – in rural and remote Scotland. We are working with the private sector to encourage their own investment in unconnected urban areas, rather than rely on public funds.

“Reaching 100% will not be easy to achieve, however achieve it we must. Fast and reliable digital connectivity is a fundamental expectation of all communities, regardless of location.

“To deliver our ambition, this government is investing £600 million through the Reaching 100% programme – more than any government in the UK has ever invested in broadband.

“I am confident that this procurement approach, funded by our record investment, will put delivery of our unique 100% commitment within touching distance. We are aiming to provide a robust fibre backbone to underpin delivery of superfast broadband for all by the end of 2021.”

Article Source: https://news.gov.scot/news/superfast-broadband-rollout-to-benefit-rural-areas

inance Secretary highlights budget support for frontline NHS services

(Article via www.gov.scot)

Investment and reform of the health service will be prioritised, Finance Secretary Derek Mackay confirmed in his Draft Scottish Budget.

Mr Mackay visited the Queen Elizabeth University Hospital in Glasgow to meet NHS Greater Glasgow & Clyde staff and students in the teaching and learning centre, where he took part in a teaching session on cardio-pulmonary resuscitation (CPR).

The health portfolio resource budget will increase by more than £400 million, taking it to a record high of over £13.1 billion.

Mr Mackay said:

“We want to continue to provide the best possible care to help people lead healthier lives, which is why we are prioritising investment in frontline services, with frontline health boards to receive additional funding of 3.7%.

“This will ensure continued investment in facilities and services, funding a new GP contract and increased investment in mental health, while also supporting key reforms such as major trauma centres.

“Of course, none of this happens without a dedicated workforce. Lifting the pay cap will benefit thousands of nurses and healthcare staff, guaranteeing a minimum increase of 3% for staff who earn up to £30,000 – rewarding and investing in hard-working public sector staff.

“The resource budget is now £360 million higher than if we had only delivered real terms increases since the last Scottish Parliament election. Our approach of investment and reform will deliver better care and health for the people of Scotland, helping meet the challenges of an ageing population and rising demand for health services.”

Article Source: https://news.gov.scot/news/record-investment-in-health

UK’s first universal superfast broadband programme launched

(Article via www.gov.scot)

Every home and business will have access to superfast broadband by 2021, as a result of a £600 million investment confirmed today by the Scottish Government.

The announcement, made as part of the Scottish Government’s 2018-19 draft budget, marks the start of procurement for the Reaching 100% (R100) programme which will deliver fast and reliable internet, with a particular focus on rural and island communities.

The Finance Secretary has confirmed that the capital investment package is being made over the next four financial years to March 2022.

The Scottish Government’s Digital Scotland Superfast Broadband programme is on track to reach 95% fibre broadband coverage by the end of this year – with further progress being delivered throughout 2018.

Rural Economy and Connectivity Secretary Fergus Ewing said:

“This is the biggest public investment ever made in a UK broadband project. It is a truly transformative moment for our broadband infrastructure and a statement of our intent to make Scotland a world-class digital nation.

“Fast and reliable internet connection is vital for the economic and social wellbeing of all communities. This ambitious investment – which is more than three times what the UK Government is putting towards their own fibre broadband rollout – will revitalise the prospects of rural areas right across Scotland.

“Building on the success of the Digital Scotland programme, we will deliver a future-proofed, national fibre network that will place rural Scotland among the best connected places anywhere in Europe.

“I am confident that the scale of our investment, and of our ambition, will attract interest from a wide range of telecoms suppliers across the UK and Europe. ”

Finance Secretary Derek Mackay added:

“I was pleased to use this year’s budget to set out our plans for the future of superfast broadband in Scotland. We will put in the money over the next four years to deliver a £600 million programme of investment, ensuring every home or business premise in Scotland has access to superfast broadband.”

Article Source: https://news.gov.scot/news/gbp-600-million-for-broadband

Additional revenues raised to protect NHS and other services

(Article via www.gov.scot)

More than two thirds of income taxpayers will pay less tax next year on their current income, Finance Secretary Derek Mackay has confirmed as he published proposals to reform income tax in Scotland.

The Draft Budget 2018-19 proposes a progressive income tax policy which protects low earning taxpayers through the introduction of a new Starter Rate of tax.

The Cabinet Secretary also confirmed plans to introduce a new Intermediate Rate of tax of 21% and plans to increase the Higher and Top Rate of tax, to 41% and 46%.

As a result of these changes, and the increase in the personal allowance, all taxpayers earning up to £33,000 will be protected from any increase in tax rates. Those earning more than £33,000 will pay only a proportionate amount more.

A majority of taxpayers (55%) in Scotland will pay marginally less in 2018-19 than they would in the rest of the UK.

Setting out the Draft Budget for 2018-19, Mr Mackay said:

“The Scottish Government has faced continued austerity from the UK Government. Over a ten year period, Scotland’s block grant will have been cut by £2.6 billion in real terms and the independent Fraser of Allander Institute has confirmed that we face a £500 million real terms reduction in spending on day-to-day services over the next two years.

“In order to mitigate UK budget cuts, protect our NHS and other public services, support our economy and tackle inequality in our society, we have decided to reform income tax in Scotland.

“In line with the four tests set out in our discussion paper, our reforms will ensure that the vast majority of taxpayers are protected, that income tax becomes more progressive, that revenues are generated for investment in public services and that – coupled with our spending choices – there will be a positive impact on the economy.

“By raising an additional £164 million of revenues to support our investment plans we can deliver on our commitment to the NHS in full, with £400 million of extra spending on health without having to reduce spending on police and fire services, social care or education.

“Our new, fairer, income tax policy will protect the 70% of taxpayers who earn less than £33,000 a year and ensure they pay less tax next year for any given income whilst asking those earning more than £33,000 to pay a proportionate amount more to support our public services.

“Our plans also ensure that over half of taxpayers will pay slightly less in Scotland next year than they would in the rest of the UK, protecting low incomes and supporting the economy.

“These measures combined with our investment in the NHS, the economy, infrastructure, education and essential public services ensure that in the year ahead Scotland will be the fairest taxed part of the UK, providing the best deal for taxpayers.”

The reforms follow engagement with the public, business organisations and Civic Scotland around the Scottish Government’s discussion paper ‘The Role of Income Tax in Scotland’s Budget’.

The Scottish Fiscal Commission has forecast that these changes will generate £164 million of additional revenues in 2018-19 and that following the Scottish Government’s decision in 2017-18 to freeze the higher rate threshold, forecast revenues will be £366 million above the block grant adjustment.

The additional revenues come at a time when the UK Government is cutting £200 million in real terms from Scotland’s budget for day-to-day spending in the coming year and will help to support a draft budget package which provides £400 million of increased investment in the health service without having to impose cuts on other public services such as social care, police, fire or education.

Income tax proposals for 2018-19 are:

• A new Starter Rate of 19% will be introduced for those earning between £11,850 and £13,850
• A Basic Rate of income tax at 20% for those earning over £13,850
• A new Intermediate Rate of 21% for those earning over £24,000 – however as a result of the new Starter Rate taxpayers earning less than £33,000 will pay no more in tax for given incomes
• A Higher Rate of 41% on incomes over £44,273 to £150,000
• A Top Rate of 46% on incomes over £150,000

In addition, the Draft Budget confirms that for Residential Land and Building Transaction Tax (LBTT) the Scottish Government will set a new zero rate threshold for first time buyers of £175,000 – taking 80% of first time buyers out of tax altogether. The residential and non-residential rates and bands for LBTT will remain unchanged.

Mr Mackay continued:

“As part of our support for housing we are not just investing £3 billion over this parliament to increase the supply of affordable housing, but we will provide more support to help people to own their first home. These changes to LBTT mean 80% of First Time buyers will pay no tax at all on the purchase of their first home.”

Article Source: https://news.gov.scot/news/most-taxpayers-to-pay-less-than-rest-of-uk