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Scottish Government publishes blueprint for economic recovery

Thu 2 Jul 20

A UK-wide £80 billion stimulus package should be created to regenerate the economy and reduce inequalities following the coronavirus (COVID-19) pandemic, a new Scottish Government report proposes.

The package could finance a temporary reduction in VAT and move the tourism and hospitality industries onto a reduced VAT rate of five per cent.

A two pence cut in employers’ National Insurance Contributions to reduce the cost of hiring staff is also recommended in the report, entitled COVID-19: UK Fiscal Path – A New Approach.

Other action it proposes the UK Government should take to kick-start the economy includes:

  • introduce a jobs guarantee scheme for young people and extend sector-specific employment and business support schemes
  • create a National Debt Plan to help business and household budgets recover from the effects of the pandemic
  • adopt new fiscal rules which prioritise economic stimulus over deficit reduction in times of crisis
  • accelerate major investment in low‑carbon initiatives, energy efficiency and digital infrastructure
  • extend Scotland’s financial powers to allow it to shape its own response to the pandemic

Click here to download Covid-19: UK Fiscal Path - a New Approach

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