Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to page 23 of Scotland’s Economic and Fiscal Forecasts, published by the Scottish Fiscal Commission in December 2021, what assessment his Department has made of the implications for its policies of the £355 million shortfall in income tax receipts to the Scottish Government in the financial year 2026-27.

The agreed Block Grant Adjustment arrangements provide substantial support to help the Scottish Government with its new tax and welfare powers, for example by shielding the Scottish Government from UK-wide impacts. However, there are residual risks as well as rewards in relation to these powers.

While the Scottish Government has tools to manage these risks, the fundamental challenge is to grow the economy in Scotland and therefore the income tax base. The UK Government is committed to building back better and levelling up all parts of the UK, including in Scotland. We would encourage the Scottish Government to similarly use all its own economic levers – from tax to skills to planning to infrastructure – to help grow Scotland’s economy and boost its own income tax receipts in the process.