Budget sets out economic growth package

Finance Secretary Derek Mackay has announced a number of key interventions to accelerate Scotland’s economic growth as he published the Draft Budget 2018-19.

Using the budget to set out a growth package of key measures to support the economy, unlock innovation and drive increased productivity, Mr Mackay said the Scottish Government was “backing Scotland’s businesses to deliver the growth, innovation and new employment opportunities that Scotland’s economy needs to thrive in the 21^st Century”.

The growth package includes:

• £96 million of extra support to deliver the most attractive business rates package in UK with the increase to the rates poundage capped at CPI inflation
• A 64% increase of £270 million in the Economy, Jobs and Fair Work budget as part of a total investment of £2.4 billion in enterprise and skills
• A 70% increase in investment in business Research & Development
• £18 million as part of a £65 million package of investment for the National Manufacturing Institute to make Scotland a global leader in advanced manufacturing
• Establishing a new £150 million Building Scotland Fund to unlock new house building, develop new low carbon commercial property and support research and development
• Setting aside resources of £340 million to provide initial capitalisation for the Scottish National Investment Bank
• Driving regional economic growth by more than doubling our investment in city region deals
• 70% of taxpayers paying less in income tax next year, assuming their income doesn’t change, protecting consumer spending, while still raising additional revenues.

The Draft Budget also proposes an ambitious programme of infrastructure investment for 2018-19 of more than £4 billion, in line with the Programme for Government commitment to invest £20 billion over the life of this parliament.

This includes:

• Contributing £756 million towards investment of more than £3 billion by 2021 to deliver 50,000 affordable homes generating up to 14,000 FTE jobs
• Beginning the procurement of Scotland’s £600 million universal superfast broadband programme to be delivered over the next four years
• Investing £60 million in Low Carbon Innovation Fund to deliver innovative low carbon energy infrastructure solutions including for electric vehicles
• Investing £1.2 billion in our transport infrastructure, including key road projects and further electrification of the rail network.

Mr Mackay said:

“This budget backs Scotland’s businesses to deliver the growth, innovation and new employment opportunities that Scotland’s economy needs to thrive in the 21^st Century.

“Scottish business will benefit hugely from our reforms to business rates, including a new growth accelerator and our decision to cap the rise in business rates at CPI, together saving firms £96 million in the next year and helping make Scotland the most attractive part of the UK to do business in.

“We will continue to fund the most competitive relief package available anywhere in the UK, worth around £720 million next year – a record amount.

“We are maintaining the expanded Small Business Bonus Scheme which helps many tens of thousands of small and medium-sized businesses and creating a new £4 million fund to back our entrepreneurs to get started and to grow.

“We are boosting levels of innovation, with a 70% increase in investment in research and development, support for new low carbon technologies, a new £150 million Building Scotland Fund and support for Scotland’s National Manufacturing Institute.

“And our Enterprise and Skills network will receive a record £2.4 billion to invest in supporting Scotland’s economy with additional funding to establish an economic agency for the South of Scotland.

“Our £4 billion commitment to new infrastructure investment next year will support 50,000 new homes, new roads and railways, electric vehicles and the delivery of 100% superfast broadband to every corner of Scotland.

“And to support future investment in Scotland’s economy we will set aside £340 million in future years to capitalise a new Scottish National Investment Bank.

“This budget delivers a growth package for Scotland that is a good for Scottish businesses, good for investment, good for taxpayers and good for Scotland’s future.”