GERS: Scotland's financial deficit expected to have risen through Covid spending
The latest Government Expenditure and Revenue Scotland figures, due to be published on Wednesday, are expected to show the notional deficit of the country has risen massively as a result of huge public spending to deal with the Covid pandemic.
The statistics, which are contentious as a result of Scotland’s constitutional divide, will be revealed by finance secretary Kate Forbes, and will estimate the difference between what Scotland has raised in taxation and what is spent on public services.
Last year the annual financial report showed the country's deficit was around three-and-a-half times bigger than the UK’s in percentage terms, despite a record increase in revenues. The deficit stood at £15.1bn – £2bn higher than the previous year.
This year it is predicted the gap will be larger as a result of a massive increase in public spending on Covid relief programmes such as the furlough scheme with a concurrent drop in tax revenues.
The Office for National Statistics has already estimated that the UK's public sector deficit for the financial year 2020/21 was £298bn or 14.2 per cent of UK Gross Domestic Produtct and the highest figure since WWII.
Ahead of publication of the figures the SNP said they would “make the case for independence more essential than ever”.
Former economy secretary Fiona Hyslop said: “Scotland has a fundamentally strong economy, underpinned by healthy and diverse sectors.
“However, the country is being held back by a Westminster system that treats Scotland as an afterthought at best, and which is actively undermining our economy on a range of fronts.
“The pandemic has shown that countries around the world have had to adapt swiftly to the economic impact of the Covid crisis.
“Old assumptions have been swept aside, as independent nations large and small have been able to take the interventions needed to protect jobs and their economies – steps not currently available to Scotland, which instead has seen a Tory UK government withdraw support.”
She added: “Opponents of independence will, as ever, try to exploit today’s GERS figures to support their arguments – the reality is very different.
“Whatever today’s figures show, GERS does not represent the finances of an independent Scotland – it shows the situation now under Westminster control.”
However, Pamela Nash, chief executive of Scotland in Union, said the pandemic proved the strength of the union, with the ability to “pool and share both resources and risk.”
She added: “It’s ludicrous to claim that Scotland is being ‘held back’ when being part of the UK has safeguarded so many jobs and livelihoods over the past year.
"Of course a separate Scotland could have taken steps to support citizens during a pandemic, but this would have been limited and at a much greater cost. As part of the UK we have access to a stronger safety net.
“The only people undermining Scotland’s economy are SNP politicians who are blinded by their obsession with division when they should be focused on recovery.
“The very last thing that Scotland wants or needs is another divisive referendum and the deep uncertainty this would cause at such a vital time for our country.”
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