In its Budget report published yesterday, Holyrood’s Finance and Constitution committee warns Scotland’s finances are already exposed to volatility and risk through the way in which the Fiscal Framework operates.
A no-deal Brexit, however, would have an even greater impact on the public finances and is not in the national interest, say the cross-party MSPs.
Finance & Constitution Committee Convener Bruce Crawford MSP said: “The Office for Budget Responsibility (OBR) states that the referendum vote to leave the EU appears to have weakened the economy and predicts that a no-deal Brexit could have a severe short-term impact on the public finances and would be a lot worse than an orderly Brexit.
“The Committee is strongly of the view that a no-deal Brexit would be damaging to the Scottish economy and public finances and, therefore, is clearly not in the national interest.”
On volatility and risk in the Budget, Mr Crawford added: “The Budget is becoming increasingly complex and subject to a greater level of risk.
“This is a result of both new financial powers and the way the Fiscal Framework works. The budget is now much more aligned to the performance of the Scottish economy and how much tax we raise in Scotland relative to the rest of the UK.
“This reinforces the Committee’s view of the need to closely monitor the level of actual tax receipts on an in-year basis, both in Scotland and the rest of the UK.”
The committee’s report will inform next week’s Stage 1 debate of the Budget Bill (31 January).
You can find the committee’s full report on the Scottish Budget 2019-20 here.
The ‘Fiscal Framework’ is the agreement between the Scottish and UK Governments that determines how Scotland is funded, and underpins the powers set out in the Scotland Act 2016.
Parliamentary timetable for the Budget Bill:
• Stage 1 debate of the Budget Bill – 31 January.
• Stage 2 – week of 4 February
• Scottish Rate Resolution – week of 18 February
• Stage 3 – week of 18 February
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