William Eichler 22 February 2019

Holyrood passes £42.5bn budget but warns of Brexit recession

Holyrood passes £42.5bn budget but warns of Brexit recession image

Holyrood has approved the 2019-20 budget which will see £42.5bn invested into public services and the economy — but warned Brexit could push Scotland into recession.

Finance Secretary Derek Mackay said the budget provides essential funding for health and care services, education, local government and economic investment.

He also said the new budget ensured that 55% of income taxpayers in Scotland pay less tax than those earning the same income in the rest of the UK.

However, he warned that Scotland’s economy was being put at risk by Brexit ‘uncertainty’.

‘Today’s chief economist report shows that a ‘No Deal’ Brexit would be expected to push the Scottish economy into recession during 2019, with the potential for the economy to contract by between 2.5% and 7% by the end of 2019,’ Mr Mackay said.

‘Such an economic slowdown would risk a rise in unemployment from its current record low, with up to 100,000 more people in Scotland made unemployed.

‘This would be an economic shock on the scale of the 2008 financial crisis, and this cannot be allowed to happen.’

Mr Mackey called on the UK Government to rule out a ‘No Deal’ Brexit and extend the Article 50 process.

‘As a responsible Government we are also continuing — and indeed intensifying — our work to prepare for all outcomes as best we can,’ he continued.

‘However, while we will do everything we can to prepare, we will not be able to mitigate all of the impacts of the UK Government’s Brexit approach.

‘This budget safeguards Scotland as best we can, using all the powers and resources at our disposal with a clear focus on our priorities as a nation.’

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