Nicola Sturgeon welcomes 'encouraging' fall in Scotland's deficit
4 min read
Scotland’s notional deficit fell by £1.3bn last year, official Scottish government statistics have revealed.
The Government Expenditure and Revenue Scotland (Gers) report estimated public spending in Scotland was £13.3bn more than the amount raised, a deficit worth 8.3% of Scotland's GDP.
Scottish public sector revenue was estimated as £58bn – the equivalent of 8% of UK revenue – including Scotland's share of North Sea revenue.
The amount of taxes raised through onshore revenues increased by £3.3bn (6.1%) in the last year.
Already low offshore revenues rose from £56m to £208m from 2015-16 to 2016-2017.
Meanwhile the report showed a £140 increase in public expenditure per head in Scotland, leaving spending per capita £1,437 higher than the UK average.
The figures put total expenditure by the Scottish government, UK government and other public bodies in Scotland at £71.2bn, or 9.2% of UK public sector expenditure.
First Minister Nicola Sturgeon said that the figures reflected Scottish government investment.
“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.
“By continuing to invest in key sectors, we will ensure Scotland remains a productive and competitive country.
“The lower oil price had an impact on North Sea revenues and the wider economy last year. However, it is encouraging to see an improvement in the overall fiscal balance and that onshore revenues grew at their fastest rate in nearly twenty years.”
Scottish finance secretary Derek Mackay added: “It is encouraging that our fiscal balance improved by nearly 10% last year. It is important to also recognise that ONS analysis shows that Scotland performs ahead of Wales, Northern Ireland and several English regions, and in line with the UK average outside of London and the south-east.
“Meanwhile, evidence also points to signs that confidence is increasing among North Sea operators, with the sector set to remain an important part of Scotland’s economy for years to come.
'UNPRECEDENTED AUSTERITY'
When taking into account Scotland’s share of North Sea revenue, the country’s public sector revenue is equivalent to £10,722 per person – £312 less than the UK average.
And when excluding North Sea revenue, it is £10,684 per person – £349 less than the UK average.
Scottish Labour leader Kezia Dugdale said the statistics show Scotland would have faced “unprecedented” levels of austerity in its first year as an independent country, had it voted ‘yes’ in the 2014 referendum.
“These figures prove once and for all that the SNP sold false hope to the poorest people in Scotland,” she said.
“Scotland’s own accounts show that the first year of an independent Scotland would have meant unprecedented levels of austerity.
“These cuts would not only have been the largest ever felt by Scottish public services like schools and hospitals, the Nationalists’ plan would have taken a sledgehammer to the welfare state as we know it.
“Nicola Sturgeon knew the sums didn’t add up. But she offered false hope, especially to the poorest people in Scotland. Thousands of Scots voted Yes on the basis of a falsehood the SNP knowingly sold them.”
Scottish Conservatives finance spokesperson Murdo Fraser said: “Today’s figures confirm the facts – Scotland is better off as part of the United Kingdom.
“All of us last year received a Union dividend of £1,750 per head.
“The truth is that when times are tough – as they have been in Scotland over the last few years – we can rely on the weight of the whole UK to ensure schools, hospitals and public services remain decently funded.
“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.”
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