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The campaign for the Scottish Parliament election of 2016 has lacked the energy and enthusiasm of #indyref1 or the general election of 2015. The winner has been known from the start – and long before. Most commentators have focussed on who comes second and becomes the official opposition in Holyrood.

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Scotland's fiscal framework: Assessing the agreement

The Smith Commission Agreement, published on 27 November 2014, set out proposals for substantial fiscal devolution to the Scottish Parliament. The Scotland Bill – due to receive Royal Assent shortly – will enshrine these powers in law.

The recent GERS figures for Scotland’s fiscal balance in 2014-15 were entirely predictable. For the first two quarters of that financial year, oil prices averaged around $100 per barrel. Revenues from North Sea oil were flowing strongly. During the next two quarters, the oil price averaged around $50 per barrel and revenues stalled.
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In headline terms, the Spending Review looks little different from the public finance forecasts in the summer budget. The Government will achieve a fiscal surplus by the end of this parliament (the first time that this has been achieved since 2001). And total public spending as a percentage of GDP will fall from 40% currently to 36%.
 
But Osborne has managed to achieve this whilst simultaneously being more generous on the spending side.
 
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The Scottish government’s block grant allocation between 2015-16 and 2020-21 was set in the 25th November spending review delivered by the Chancellor of the Exchequer. Current spending will increase from £25.9 billion now, to £26.5 billion in 2019-20. This represents a 5% real cut (equivalent to £1.3 billion). In contrast, due to the UK government’s decision to increase capital spending by £12 billion compared with its plans last July, Scotland’s capital budget will increase from £3 billion to £3.5 billion by 2020-21, an increase of around 10% in real terms.
 
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The devolution of various welfare powers to Scotland has led to speculation as to what a Scottish benefits system might look like. However, analysis from David Bell suggests that Holyrood may struggle to meet the bill for existing benefits in future years, let alone new ones. 

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  • 21st June 2018

    New research conducted by the universities of Edinburgh and Glasgow suggests that a post-Brexit Scotland is likely to find itself losing out on much-needed low-skilled migrant labour from the European Economic Area (EEA) to English-speaking countries such as North America, Australia, and to countries within the EEA.

  • 19th June 2018

    Following the collapse of the Rajoy government following a corruption scandal, how does the new political landscape affect the constitutional debate in Catalonia? Prof Antonia María Ruiz Jiménez of Universidad Pablo de Olavide suggests that this apparently dramatic change will make relatively little difference.

  • 13th June 2018

    While populist leaders and movements make headlines worldwide, an often more subtle majority nationalism remains an endemic condition of the modern world. This phenomenon is comparatively understudied. The Centre on Constitutional Change invites calls for abstracts for an international workshop on the topic of majority nationalism, to be held in February 2019.

  • 31st May 2018

    The recent report by the Growth Commission contains some interesting ideas, says Michael Keating, but also makes some problematic assumptions.

  • 30th May 2018

    The Scottish and Welsh Governments worked together closely during their negotiations with the UK Government over those aspects of the EU (Withdrawal) Bill that related to devolution. Despite ultimately choosing different paths, say Hedydd Phylip and Greg Davies, this spirit of cooperation looks set to continue.

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