Labour and SNP lock horns over fiscal autonomy

Nicola Sturgeon has said that Scotland continues to pay more into the UK economy than the UK average. Picture: Andrew Cowan

More public cash was spent per person north of the border even though Scotland ran a larger deficit as a proportion of GDP when compared with the UK.

Scotland’s deficit amounted to £12.4 billion (8.1 per cent of GDP) in 2013/14, a figure that took into account capital investment and included Scotland taking a geographical share of North Sea oil revenue.

That compared to a £97.3 billion deficit (5.6 per cent of GDP) for the UK as a whole.

The figures were revealed when First Minister Nicola Sturgeon published her administration’s annual Government Expenditure and Revenue Scotland (GERS) figures.

The GERS data showed that total public expenditure in Scotland was £66.4 billion, the equivalent of £12,500 per head and 9.2 per cent of the total UK figure.

In the UK as a whole public expenditure per head was £11,200.

When the figures were rounded off that meant that spending in Scotland was £1,200 per person higher.

When it came to the amount raised in Scotland, on shore public sector revenue was estimated at £50 billion, representing £9,400 per person - £300 less per person than the UK average.

However, when a geographical share of North Sea oil revenue was added it was found that the Scots contributed more in taxes than the UK average.

The inclusion of North Sea oil raised total public sector revenue increase to £54 billion, a figure that represented £10,100 per person and £400 more than the UK average.

When the £400 extra per person raised north of the border was subtracted from the £1,200 per person extra spending, Scotland remained £800 in the red.

Labour argued that the £800 difference showed the dangers of the SNP’s plans for full fiscal autonomy, a constitutional settlement that would see Scotland reliant on oil revenues without the cushion of the Barnett Formula.

Labour’s finance spokeswoman Jackie Baillie said: “Some people would describe that £800 as a Union dividend. It exposes the financial fantasy of full fiscal autonomy.

“If we were to go for full fiscal autonomy there would have to be huge cuts unlike any we have seen before or huge tax rises.”

Chief Secretary to the Treasury Danny Alexander said: “Today’s figures show that Scotland’s borrowing was £800 per head higher than the UK average last year: that’s £800 more that an independent Scotland would have to tax every man, woman and child.”

Ms Sturgeon said: “On average, Scotland paid £400 more in tax per person to the UK Treasury than elsewhere in the UK last year. That is the 34th year in which we have contributed more than the rest of the UK and is a testament to the inherent strengths of the Scottish economy.

“Scotland makes higher revenue contributions than the UK as a whole, we have higher employment, lower unemployment than the other nations of the UK and our economy is growing at a faster rate then the UK as a whole.”

She added: “We have the capacity and the resources to grow our economy, address inequalities, grow small businesses and put more people back to work. But to do that we need more economic powers and the ability to protect Scotland against the anticipated £14.5 billion in cuts that the Westminster parties plan over the course of the next parliament.”