I am delighted to be launching this consultation to seek views on the role of our devolved taxes and the Fiscal Framework in the COVID-19 economic recovery, which will help inform the decisions we take at the upcoming Scottish Budget 2021-22 and longer term.
The COVID-19 pandemic has created a challenge on a scale not seen in our lifetimes. The Scottish Government has taken unprecedented steps to support people and businesses in Scotland and we will continue to do so.
Scotland’s public finances were already facing challenges this year due to the uncertainty caused by Brexit. We are now witnessing an unprecedented health and economic crisis, and the fiscal policy response will be central to our recovery. I have engaged extensively with stakeholders over the past few months, and have discussed ideas and views on our economic and fiscal recovery with many organisations and individuals. As we move towards the Scottish Budget 2021-22, I want to ensure I hear the widest possible range of views on how to aid the recovery and deliver a fairer and greener economy that puts wellbeing at its core, while ensuring sustainable public finances. This consultation is a crucial component of that.
The Scottish budget remains highly dependent on UK tax and spending decisions. We continue to invest to protect and create jobs, support businesses and strengthen communities, but our ability to do that is constrained by our limited borrowing powers. I will therefore continue to press for the Scottish Government to be granted additional financial powers to enable us to tailor a response that meets Scotland’s needs. With greater fiscal powers we would have the ability to make different choices, with different economic and budgetary results.
I want to hear views from across Scotland about how we can best use our existing powers, and where our powers need to be expanded, to support Scotland’s recovery. This will inform the Scottish Budget 2021-22 and the actions we take longer term, including as part of the review of the Fiscal Framework due to take place after the Scottish Parliament elections in 2021.
Everyone has a stake in tax and fiscal policy and, notwithstanding the limitations of the devolved settlement, the decisions we take in Scotland now have a greater impact on the size of the Scottish Budget. I want Scotland to be a country where we speak openly and frankly about tax; they are your taxes and they pay for your public services. This consultation provides you with the opportunity to help shape the way the Scottish Government uses its fiscal powers to support the COVID-19 recovery, and I very much look forward to receiving your views. I would like to thank you in advance for taking the time to respond to this consultation.
Cabinet Secretary for Finance