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Uncertainty over Brexit continues to loom over Scotland's economic recovery, according to a leading forecaster.

The Fraser of Allander Institute (FAI) said indicators suggested the economy was improving following "an exceptionally weak last two years".

But it warned that the Brexit negotiations remained the "greatest cloud on the immediate horizon".

It said the economy faced severe risks if the UK government could not reach a deal with the EU.

The report also called for UK ministers to clarify which powers they envisage will be transferred to Holyrood after Brexit.

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Mr Lockhart says higher income tax in Scotland will not deliver more revenue in Scotland.

The Tory MSP says the Scottish economy is forecast by the Fraser of Allander Institute to be lower than the rest of the UK for some time to come.

He says higher taxation will only make this situation wrong.

Tory MSP Dean Lockhart says he has been watching the other parties "clamber over one another" to implement left-wing tax rises.

Mr Lockhart says every party has made their position clear apart from the government.

The Tory MSP says: "this government does not have an income tax policy."

He says the government want more businesses to come to Scotland only to tell them that they will pay more tax than elsewhere in the UK.

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Scottish Green Party co-convener Patrick Harvie says local taxation has been constrained only by the political paralysis of this parliament.

Mr Harvie lambasts the failure to reform council tax.

Mr Harvie says; "We have a deeply regressive approach to tax at the moment."

The Scottish Green co-convener says the SNP must set out some core principles.

He says the lost value in public sector pay must be rectified.

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Scottish Green Party co-convener Patrick Harvie says he still does not know if the Lib Dems are open to splitting the basic rate of income tax to protect the lowest earners.

Mr Harvie says the Greens would cut the tax burden on the lowest income part of Scotland's society.

He says the Conservative approach is based on "magical thinking" with tax cut after tax cut.

Mr Rennie says the only purpose for wanting control of the personal allowance would be to increase tax on the lowest earners by taking it down.

The Scottish Lib Dem leader says this can only mean higher tax for the poor.

He says "we need some clarity on what the government intend to do today."

Mr Rennie says he does not regard saving people's lives in hospitals or educating children as "pickpocketing".

He says to describe it in an emotive way is helpful.

The Scottish Lib Dem leader says Scotland has the ability to do things differently.

He says it is positive Derek Mackay is embracing the potential to do something different.

Scottish Lib Dem leader Willie Rennie says he was surprised Mr Mackay's intervention on Mr Gray to bring up the block-grant and this suggests he has reached a conclusion on tax.

Some of the members in the chamber suggest Mr Rennie is engaging in conspiracy theories.

Mr Rennie says if the government want to talk about conspiracies they only need to look at SNP MSP Joan McAlpine's speech where she seemed to suggest the unionist parties are trying to cut Holyrood's budget.

Tory MSP Alison Harris says a return to high tax and high spending has already been rejected by Scottish voters.

Ms Harris says Mr Swinney previously said that this is a tax change which would have a detriment on low income households.

The Tory MSP says her party will stand on the side of Scottish families and businesses.

SNP MSP Joan McAlpine says the Tories repeatedly bleat against tax rises it may be part of their grand design to cut Holyrood's budget.

Ms McAlpine says NHS spending in Scotland is higher per head than in England.

Labour MSP Iain Gray says they other parties do not know where Mr Mackay stands on tax.

Mr Gray says APD is the only thing Mr Mackay has been clear on when it comes to tax and this is a cut that will only benefit the rich.

The Labour MSP says the only way to face this country's challenges is to invest in future generations.

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SNP MSP Tom Arthur says the parties need to get out of their entrenched positions.

Mr Arthur says there will be a need to compromise and he warns against prejudicing the discussion on taxation.