Date lodged: 21 September 2018
To ask the Scottish Government, further to the answer to question S5W-17419 by Derek Mackay on 16 July 2018, what its position is on whether its policy to increase income tax levels for people earning over £26,000 compared with people in the rest of the UK, holding other factors constant, will widen or narrow the gap between Scotland's and the UK’s levels of real household disposable income.
Answered by: Derek Mackay 2 October 2018
Our income tax policy ensures that for the majority of income tax payers - those earning less than £26,000 - Scotland is the lowest taxed part of the UK.
The latest statistics from ONS show that over the period 2007 – 2017 (the latest available year) Gross Household Disposable Income per person in Scotland has grown at 2.2% a year in current prices, the same as in the UK as a whole. Although the SFC has initially forecast a lower growth rate for household income as compared to the rate forecast by the OBR for the rest of the UK, the SFC’s forecast does indicate that the gap will close – see figure 5 of its May 2018 report: http://www.fiscalcommission.scot/media/1314/scotlands-economic-and-fiscal-forecasts-may-2018-full-report.pdf