GERS figures showing Scotland's £15.1bn deficit described as 'hammer blow' to independence plans by Tories

Figures showing growth in Scotland’s fiscal deficit have been described as a “hammer blow” to plans for independence by the Tories, while the Finance Secretary says they demonstrate that the status quo must change.

Politicians on opposing sides of the independence question have responded to the annual Government Expenditure and Revenue Scotland (Gers) statistics.

The official figures showed Scotland’s fiscal deficit grew to 8.6 per cent of GDP in the 2019/20 financial year, with government spending £15.1 billion more than is received in revenues.

The deficit rose from 7.4% the previous year, while the UK’s deficit stood at 2.5% compared to 1.9% last year.

Tory finance spokesman Murdo Fraser said the growth in deficit was a "hammer blow" to independence plans. Pictures: Andrew Cowan/Jon Savage

Total public sector expenditure for the benefit of Scotland, including both UK and Scottish Government spending, rose by 3.1% to £81 billion.

This is equivalent to £14,829 per person in Scotland, £1,633 per person greater than the UK average.

While the figures incorporate the early stages of the coronavirus pandemic, the Gers report notes the impact will be greater in the next financial year.

Finance Secretary Kate Forbes reiterated her call for the Scottish Government to have further financial powers at a media briefing on Wednesday.

She said: “Although Gers is not the Scottish Government’s budget and reflects the current constitutional arrangements whereby another government’s policy choices are allocated to Scotland, the publication sets out the context for why the status quo and the present constitutional arrangements are unsustainable.”

Ms Forbes said it was “incredibly frustrating” that Scotland could not borrow to invest in recovery.

The Finance Secretary was asked about the Fraser of Allander Institute think-tank's initial response to Gers, which said Scotland's deficit could grow to around 21% and 22% next year, and if this would be sustainable for an independent Scotland.

She said countries around the world had built up "unprecedented deficits" to deal with the pandemic which would be reduced over time.

Asked about the higher levels of per capita public spending in Scotland, she said: "I look at those figures and see the current constitutional arrangements as being unsustainable."

'Hammer blow'

Scottish Conservative finance spokesman Murdo Fraser said the figures do not take into account the "blockbuster support" from the UK Government, such as the furlough scheme.

He said: "This is a hammer blow to the SNP and a massive setback for separation.

"Nicola Sturgeon would have to throw away Scotland's entire NHS, every nurse and doctor, just to come close to balancing the budget in her separate state.

"It's beyond dispute that the economic case for independence has never been weaker.

"Separating would cost Scotland £15 billion a year that we need for our schools and hospitals."

'Unrelenting austerity'

Scottish Labour leader Richard Leonard said the coronavirus pandemic had “plunged the Scottish and UK economies into the biggest freefall for 300 years.

"The Scottish and UK governments need to co-operate to restart the economy and to retain, guarantee and create jobs, and to remobilise our public services.

“These statistics show that Scotland’s deficit has increased in size even before the impact of the economic ramifications of the pandemic are felt.

“With billions draining from the Scottish economy in the event of separation, Scotland would be thrust into years of savage and unrelenting austerity.

“We cannot let a generation be lost to austerity caused by the pandemic or the creation of a separate Scottish state. Scottish Labour will continue to fight for the investment and jobs that Scotland so badly needs.”