Scotland has a £12bn finance deficit, report says
SCOTLAND is carrying a £12 billion black hole in its finances, a new report has found.
But the figures from the Centre for Economics and Business Research (CEBR) show that the country’s deficit – about 10 per cent of GDP – is no worse than the UK as a whole, debunking the claim that Scotland is subsidised.
Public spending in Scotland on services such as the NHS and schools is currently about £62.4bn, the report finds, while only £50.6bn is raised in taxes – including Scotland’s share of oil and gas revenues.
This leaves an annual deficit of about £11.8bn.
Finance secretary John Swinney has argued that the official Government Expenditure and Revenue Spending (Gers) figures indicate Scotland’s finances operate in small budget surplus.
The coalition’s interpretation of these official statistics is that Scotland’s deficit, even with oil and gas receipts, would be about £14bn – far closer to the estimate in today’s report.
Conservative finance spokesman Gavin Brown said: “This clearly shows that Scotland is spending 10 per cent more than what it’s raising in tax receipts.
“Under separation, this shortfall would have to made up through more borrowing.
“Scotland currently enjoys the economic strength of being part of the United Kingdom and its triple-A rating, but this would not be the case if we broke away from Britain, resulting in higher interest rates.”
Labour finance spokesman Ken Macintosh said: “Being part of the United Kingdom allows Scotland to share the benefits and spread the risks, and that is why the vast majority of Scots want to stay in the Union.”
The annual deficit comes on top of the share of UK national debt which Scotland would have to take on after independence, estimated to be somewhere in the region of £80-110bn.
But the report does show that Scotland’s deficit level is no worse than that of the rest of the UK as a whole.
“In the light of the independence debate, Scotland receives no net subsidy,” it states.
“The oil and gas revenues exactly cancel out the fiscal transfers from the non-oil sector.”
The report uses the figure of 83 per cent to account for Scotland’s share of North Sea oil and gas revenues.
The Scottish Government, however, insists that this is closer to 91.4 per cent.
Mr Swinney said: “Year-on-year, Scotland is in a stronger financial position than the UK as a whole.”
He explained: “Taking all Scottish revenues and all spending in Scotland into account – including the net cost of the financial sector interventions – the official Gers statistics show that Scotland has run a current budget surplus in four of the five years to 2009-10, while the UK was in current budget deficit in each of these years, and hasn’t run a current budget surplus since 2001-2.
“In the five years to 2009-10, Scotland was in a stronger financial position than the UK as a whole to the tune of £7.2bn – or nearly £1,500 for every person in Scotland.”
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Comments
There are 24 comments to this article
Page 1 of 2
Mikey von Ruden
Tuesday, February 14, 2012 at 07:20 AM"Scotland has a £12bn finance deficit, report says", this being a point of fact, why doesn't 'The Scotsman' move to a more financially secure area, such as England?
SNP for me
Monday, February 13, 2012 at 11:58 PM***********"debunking the claim that Scotland is subsidised"********** That's all that needs said. Put that quote up on your walls all you ToryLabourTrolling unionists... The editorial team must have spent hours trying to work out how to spin this one in a negative light, couldn't, so just went for the most outrageous deflective headline they could come up with. I applaud their efforts - better than anything achieved in the worst phases of the second world war German propaganda machine.
Jak da Ladd
Monday, February 13, 2012 at 08:24 PMMy own opinion is that this conversation will get too complicated and will scare people off, take the known rather than the unknown. It is only human. The truth is though that a lot of people clearly want change. The problem is complex, or at least the solution would have to be. So instead of all this arguing at this stage should we not be taking the top five universities in the country and funding them to do research into the key topics that concern people and some possible workable solutions. Have consultative town meetings throughout the country on the same evenings so this whole thing becomes a real grass roots movement that you cannot avoid. Things need to be explained in terms of costs and job implications. There are lots of people who see Scotland as independent enough and are quite happy being in the UK. At least that is true until the PM says when the vote must be held and the financial minister tells you to an independent Scotland cannot be assured of the pound. I thought that was the daftest thing anyone could say until the first minister said later "we will keep the pound and the Queen", what? did I hear right? So what is independence then? Queen must go, pound must go. Be like Canada, what on earth do we want an English pound for? Ah well, it was nice to dream there, an independent Scotland... now about those Subs, would that be daily parking rate or can I give you a monthly parking voucher sir?
Independence for England
Monday, February 13, 2012 at 07:27 PMzzzzzzzzzzzzzzzzzzzzzzzzzzzz!
well informed
Monday, February 13, 2012 at 05:14 PMAye but theyre assuming Scotlands share of N S Oil and Gas is proportional to its population and not based on its legally binding geographical share which is closer to 95%!!!! What else have they got deliberately wrong in their calculations?
zippitydoodaa
Monday, February 13, 2012 at 02:00 PMThe Scotsman is a joke................................................................................ The owners of Johnstone Press (The Scotsmans English owners) must be actively trying to destroy the credibility of this newpaper....................................................................................................... It's the only explanation
eddjasfreeman
Monday, February 13, 2012 at 01:01 PMI look forward to more stories such as this, with its really rather outrageous pro-unionist spin. "MacPravda" indeed. I look forward to more mouthings off by good old "birther" Donald Trump , he who insisted that Barak Obama was not a real American, thus challenging his legitimacy as President of the USA in the face of the popular vote, and demanded that he produce his birth certificate from Hawaii. I look forward to more own goals by David Cameron, who, as you report, is set to "snub" our Eck, and through him, us, by refusing to talk to him about independence. I look forward to more attempts to prevent 16- and 17-year-olds voting in the referendum - to be held in 2014, two years hence, when people that age now will be at least 18. And entitled to vote. I look forward to more attempts from Westminster to dictate when we should hold our referendum - and yes, I mean OUR referendum - and what questions we wish to ask ourselves in it. When a marriage is dissolved, it can be amicable, but so often it is not. It is perfectly obvious that those of us who yearn for Scottish independence want it to be amicable. Oh - and when one of you wants a divorce and the other doesn't, there are provisions for that too. Extending the referendum to England as those who suggest it always say - presumably meaning Wales and Northern Ireland as well, though I have my doubts - is just risible, a ludicrous idea. As a small country, we would be limited in both the good and the harm we could do in the world alone. Long live small countries that do not throw their weight around or engage in ghastly foreign wars more or less alone. Long live small countries that have a becoming degree of humility and a spirit of compromise in the face of the desires of their neighbours, other more remote countries and, horrible phrase, the "international community". Let the will of the people of Scotland be done, in Scotland, for the Scottish people, by the Scottish people.
and I'm not making this up
Monday, February 13, 2012 at 10:46 AMSCOTLAND is carrying a £12 billion black hole -HAHAHAHAHAHAHAHAHAHAHA - who writes this rubbish.
Spooked
Monday, February 13, 2012 at 10:42 AMTin Man , the 8.4% compared to 9.4% figure is the one to go with in the world of Eck. If you told the truth and compared 9.3% with 9.4% then you'd have to admit that the financial case for complaining about Westminster was basically due to a rounding error and your Cybergnat controller would accuse you of being anti-Scottish. ...Then you'd be in trouble.
The Tin Man
Monday, February 13, 2012 at 10:00 AM4 Intervention: "In 2009 10 we received 9.3% of UK spending but contributed 9.4% of UK tax". This is far closer to the truth than Swinney's lie mantra. And, quite frankly, who cares if we received 9.3% of UK spending but contributed 9.4% of UK tax? It is hardly going to set the heather on fire, and lays bare the lies about being 'subsidy junkies', and the lies about 'being incredibly more wealthy'. Instead, it reveals a distinctly dull level of equality.
Auld Twa
Monday, February 13, 2012 at 09:45 AMThis is the same CEBR that predicted in December 2009 that the pound would soon fall below the euro in value.
The Tin Man
Monday, February 13, 2012 at 09:25 AM"the official Gers statistics show that Scotland has run a current budget surplus in four of the five years to 2009-10". I am getting pretty tired of Swinney perpetually peddling this lie. The guy can't even read his own reports. The official Gers statistics show that Scotland has run a current budget deficit in five of the five years to 2009-10.
Danielrober2
Monday, February 13, 2012 at 09:17 AMCome on SNP just publish your plan with data, information, methodology and conclusions according to EU norm, even if it is only a 1000 page booklet.
Danielrober2
Monday, February 13, 2012 at 09:16 AMDay in Month out, the SNP ignores those people who have UK national jobs or UK government contractors. They cannot just be ignored as unimportant. What happens to those people come separation. Will the SNP provide jobs or are these hard working people expected to move south? ............................. A published plan with data, information, methodology and conclusions according to EU norm, even if it is only a 1000 page booklet, will go a long way to addressing many concerns.
JPJ2
Monday, February 13, 2012 at 09:07 AMWhy didn't MacPravda use the headline from the London Times which broke this story on Sunday, namely: "SCOTS REJOICE AS SUBSIDY JUNKEY MYTH LAID TO REST" Yes folks, even the unionist Sunday Times could not bring itself to produce an anti-independence headline like our own dear (as in anything paid for this rag is more than it is worth). You ceased to be newspaper years ago MacPravda and are simply a unionist propaganda sheet unable to distinguish between news and opinion-SHAME ON YOU!!!
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