Scotland's Deficit Drops To £13.3Bn, Government Figures Show

23 August 2017, 13:48

British money

Scotland's deficit has been cut to £13.3 billion over the past year, according to new statistics.

The Government Expenditure and Revenue Scotland (Gers) report said the figure represented an 8.3% share of Scotland's GDP - more than three times the UK figure of 2.4%.

The gap between the Scottish and UK deficits has been attributed to the collapse in the oil price, with opposition parties seizing on the statistics to criticise the SNP's economic case for independence.

Prior to the 2014 referendum, the party estimated a much lower deficit and significantly higher oil and gas revenue in 2016/17, which would have been the first year of independence after a Yes vote.

First Minister Nicola Sturgeon said she did not accept "in any way, shape or form" that the SNP's prospectus for leaving the UK had misled voters.

She said: "Nobody foresaw the decline in the oil price.

"That was a change in circumstance that happened after the publication in the figures in the white paper.

"The white paper figures that were published were based on the best available evidence at the time."

She said the improvement in the overall fiscal balance for 2016/17 was "encouraging", with the deficit down by £1.3 billion or 9.3% of GDP from 2015/16, and a £3.3 billion increase in onshore revenues.

"Scotland's economy remains strong. In the last quarter, our economy grew nearly four times faster than the UK and the number of people in employment is at a record high," she said.

"These figures reflect Scotland's finances under current constitutional arrangements.

"However, they show that our investment in key industries, such as the life-science sector, is providing a real boost to our onshore economy."

The Gers report shows that while North Sea revenue rose from £56 million in 2015/16 to £208 million over the past year, this slight rise followed a sharp drop from £1.4 billion in 2014/15.

Scottish Labour leader Kezia Dugdale said: "These figures prove once and for all that the SNP sold false hope to the poorest people in Scotland.

"Scotland's own accounts show that the first year of an independent Scotland would have meant unprecedented levels of austerity."

Scottish Liberal Democrat leader Willie Rennie said: "Oil revenues have tanked since 2014. The SNP relied on the 2014 numbers for their independence campaign.

"People need to know why they got it so wrong to make sure the same mistakes can't happen again."

The Scottish Conservatives said the figures showed Scotland was better-off as part of the UK.

The report states that Scottish public sector revenue was about £312 per person lower than the UK average while public sector spending was £1,437 per person greater than the UK average.

Finance spokesman Murdo Fraser MSP said: "All of us last year received a Union dividend of £1,750 per head."

He added: "These figures also confirm just how wrong the SNP got it during the referendum campaign."

"In 2014, Alex Salmond and Nicola Sturgeon looked Scottish families in the eye and insisted we'd be better-off.

"In fact, in the first year of independence, Scotland would have been staring at the biggest deficit in Europe."

Green MSP Patrick Harvie said: "Every year these figures set off a tiresome war of words between those who think Scotland could never run its own affairs and those who think the SNP approach is flawless.

"What these figures really show is that Scotland needs to build a clean economy that does not rely on oil and gas."