SCOTLAND is currently running a public spending deficit of more than £7 billion a year, official figures for the year 2011/12 released today show.
But the country’s public finances are in better shape than the UK as a whole if North Sea oil and gas revenues are taken into account, according to the Government and Expenditure and Revenue Scotland (GERS) figures.
They set out the amount of public spending in Scotland compared with the level of taxes raised and compares this with the UK as a whole.
About £64.5 billion is currently spent in Scotland, the equivalent of 9.3 percent of UK public spending. Without the oil and gas money, Scotland raises about £46.3 billion in tax - but taking Scotland’s geographical share of North Sea revenues into account this into account it rises to £56.9 billion or 9.9 percent of total UK public spending.
Finance Secretary John Swinney said this shows Scotland continues to contribute “proportionately more” to the UK Treasury than it receives in public spending.
“Scotland’s referendum in Autumn 2014 is an opportunity to ensure that key economic decisions are taken in Scotland for Scotland, and that we can boost economic growth to invest in the country’s future,” he said.
“In 2011/12, Scotland generated 9.9 per cent of UK revenues with 8.4 per cent of the population while only receiving 9.3 per cent of UK public spending back from the UK Government. This demonstrates beyond any doubt that Scotland more than pays her way in the UK.
“Over the last year our stronger fiscal position, would have seen Scotland better off to the tune of £824 per person, or £4.4 billion in total.”
The position in Scotland was helped by a rise in North Sea oil and gas revenues which jumped from £8.8bn in 2010/11 to £11.2 billion last year. This brought Scotland’s deficit down from more than £10 bn to £7.6 billion.
Scottish Secretary Michael Moore said: “The rise in oil revenues is welcome and shows that the UK’s regulatory and tax regime is supporting the industry to get the most out of North Sea oil and gas. In the last Budget we announced a package of measures which will secure billions of pounds of extra investment in the UK Continental Shelf.
“While the sector is valuable to our country the past decade has shown that the price of oil can be extremely volatile from year to year. This underlying volatility can be much better managed inside the larger UK where oil and gas revenues represent a smaller percentage of overall tax revenues.”
Liberal Democrat leader Willie Rennie said: “Even in the good years we’re running a deficit of £7.6 billion, what would it be when the oil revenues drop?
“These latest figures prove the folly of relying on such a volatile source of income.
“As part of the UK, Scotland shares the risks and rewards.”
But Blair Jenkins, chief executive of the offcicial pro-independence Yes Scotland said the figures show that Scotland has one of the “best sets of national accounts of any country in the developed world.”
He added: “They also clearly underline that Scotland has got what it takes to be a strong, independent nation and that our future will be built on robust financial foundations.
“The figures show that Scotland generates a bigger share of UK taxes than we get as a share of UK spending.
“Scotland’s finances have been healthier than the UK’s for a number of years now. Our opponents in the No campaign would be doing the people of Scotland a service if they admitted that.”