The most up to date figures on Scotland’s fiscal situation show that Scotland’s finances are in much better shape than the rest of the UK.
The publication of the annual Government Expenditure and Revenue Report (GERS), shows that had Scotland been independent last year then every man, woman and child would have been over £500 better off.
The report, compiled by independent Government analysts and recognised by both Edinburgh and Westminster as the best indicator of Scotland’s financial situation, showed that Scotland contributed proportionally more to the UK Treasury than the rest of the UK.
According to figures in the report, Scotland generated 9.6 per cent of UK revenues with just 8.4 per cent of the population. However, despite contributing 9.6 per cent to the UK Treasury, Scotland received only 9.3 per cent in return.
Including our geographical share of North Sea revenues, Scotland’s estimated current budget balance in 2010-11 was a deficit of £6.4 billion, or 4.4 per cent of GDP – stronger than the UK-wide deficit of £97.8 billion, or 6.6 per cent of GDP for the same year,
However the UK figure includes 100 per cent of North Sea revenues which would decrease with Scottish independence.
The overall net fiscal balance for Scotland – which includes long term infrastructure investment – showed Scotland was again in a stronger position than the UK: a deficit of 7.4 per cent of GDP, compared to 9.2 per cent for the UK as a whole.
The report was warmly welcomed by Scottish Finance Secretary John Swinney who said it blew apart the myth that Scotland needed subsidies from south of the border.
The figures, said Mr Swinney, showed that Scotland had lost £8.6 billion since 2006/7 by being in the Union – which was over £1,600 for every man, woman and child in Scotland.
“This underlines the opportunities of independence and financial responsibility.” said the Finance Secretary, who added:
“Scotland’s oil and gas resources – a trillion pound asset base – are worth more than 10 times Scotland’s share of a UK debt built up by successive Westminster governments.
“And we know that North Sea revenues remain substantial, with more than half the value still to be extracted.
“…The independence referendum in Autumn 2014 will be an opportunity to ensure that the key economic decisions are taken in Scotland for Scotland, and that we can boost economic growth and invest the proceeds in protecting our public services.”
SNP MSP Kenneth Gibson – Convener of the Scottish Parliament’s Finance Committee – insisted that the benefits of independence were now unanswerable.
Citing a poll in December showing that two thirds of people would support independence if it were shown they would be just £500 better of Mr Gibson said:
“The case that Scotland would be better off independent is unanswerable. Not only is more raised in Scotland than is spent, but Scotland’s budget has been in a stronger position than the UK as a whole in each of the last six years – all the way through the tough financial times that we were told an independent Scotland would not survive.
“Recent polls have suggested that two thirds of Scots would be in favour of independence if it made them £500 a year better off – today’s figures show that they would have been £510 a year better off in 2010/11.
“We are also told again and again that an independent Scotland would be over-reliant on a volatile North Sea Oil resource. Yet today’s figures show that oil revenues are only 15% of our total tax take – compared to 29% in Norway, which seems to manage just fine as an independent country.”
“Continued attempts from anti-independence parties to try and scare voters into staying the UK are having precisely the opposite effect. As we move forward with the “Yes” campaign more and more people are realising that – despite consistent attempts from anti-independence parties to talk Scotland down – there is absolutely no doubt of Scotland’s sound financial footing.”
Opponents of independence responded to the report by claiming that volatility in the oil market made independence risky. Lib Dem Secretary of State for Scotland Michael Moore claimed that Scotland was better off within the UK.
Mr Moore said: “Scotland is an integral part of the UK and also benefits from the UK-wide spending on the wider economy – including the essential stabilisation of the banking system, deficit reduction, quantitative easing and other projects led by the UK government,” he said.
“There is little point in the Scottish government saying Scotland’s finances are stronger than the UK’s – that relies on a number of omissions and fails to take account of the interwoven nature of the UK’s spending.”
Labour MSP Ken Macintosh said that Scotland was better staying with the rest of the UK ‘sharing the risks and rewards’
He added: “This shows the huge economic benefits of Scotland working in partnership with the rest of the UK and explodes the myth that somehow Scotland’s finances are being diddled by the club we are part of.
“The report shows that, if the SNP get their way, Scotland would have to raise taxes, cut public services or borrow more at a higher rate.”
Last weekend Mr Macintosh’s leader, Johann Lamont had claimed that Scotland should stay in the Union in order to benefit from the sharing of wealth from the south east of England that she claimed was the wealthiest part of the UK.
Ms Lamont claimed that an independent Scotland would be unable to tackle the blight of poverty as effectively as it can within the Union.
How BBC Scotland’s Douglas Fraser reported the GERS figures:
The full report can be read here: http://www.scotland.gov.uk/Resource/0038/00389321.pdf