The Scottish Government today published the Government Expenditure and Revenue Scotland report (GERS), which, including a geographical share of North Sea revenues, shows Scotland with a current budget surplus in 2006/07.
In 2006/07, Scotland's current surplus is estimated at £837m, or 0.7 per cent of GDP. The report adds that the UK deficit of £4.3bn, or 0.3 per cent of GDP.
The aim of GERS is to enhance public understanding of fiscal issues in Scotland. GERS is a National Statistics Publication for Scotland, and the report also provides estimates excluding UK North Sea revenue, and an estimate based upon a per capita share of UK North Sea revenue.
In 2006-07, the estimated current budget balance for the public sector in Scotland was a deficit of £6.7bn (6.4 per cent of Scottish GDP) when excluding North Sea revenue, and there was a deficit of £6bn (5.5 per cent of Scottish GDP) including a per capita share of North Sea revenue.
The report also provides an estimate of Scotland's fiscal balance - which factors in capital and infrastructure investment for the nation's long term benefit. This shows a Scottish deficit of 2.1 per cent of GDP, or £2.7bn, when an estimated geographical share of North Sea revenue is included. The report adds that the UK deficit in 2006/07 is 2.3 per cent of GDP.
However, the estimated fiscal balance in Scotland was a deficit of £10.2bn (9.7 per cent of Scottish GDP) when excluding North Sea revenue, and a deficit of £9.4bn (8.8 per cent of Scottish GDP) when including a per capita share of North Sea revenue.
Total public sector expenditure for Scotland in 2006-07 was estimated at £49.9bn, equivalent to 9.5 per cent of total UK public sector expenditure. Approximately 9.2 per cent of Scottish expenditure was capital expenditure.
Commenting on the publication, John Swinney, Cabinet Secretary for Finance and Sustainable Growth, said: “The GERS analysis shows Scotland in surplus on the current budget in both 2005/06 and 2006/07.
“With a current budget surplus in 2006/07 of over £800m - in the context of a UK deficit of over £4bn - the flow of resources from Scotland to the rest of the UK is some £1.2bn.
“This year's GERS publication has been informed by an updated and detailed analysis of North Sea revenues by Aberdeen University, enabling a geographical share to be allocated to Scotland's accounts.
“GERS can only ever be an attempted snapshot of Scotland's finances as a devolved nation. With the full financial responsibilities of independence, we will have the ability to increase Scotland's wealth even further through policies designed to boost sustainable economic growth - with the benefits felt by families and households in all parts of our country.
“Scotland stands on a firm financial footing. And independence holds out the prospect of a flourishing and economically successful Scotland.”
Commenting on the publication, Labour's finance spokesperson Iain Gray MSP said: "The SNP response to the publication of the GERS figures today are a distortion of what the civil service figures actually say. The inconvenient truth for the Nationalists is that the figures prove yet again that Scotland benefits from being inside the UK."
"The SNP response also reaffirms that they are living in never-never land with their misguided reliance on pinning Scotland's entire economic future on one commodity - oil - that is volatile in price and finite in existence. Alex Salmond might want to gamble our economy on the world oil market but we don't."
"Once again the SNP are devoting all their energies to picking and choosing figures to try and get the answer they want. They should be spending their time investing in growing Scotland's economy, not cutting support from the things that our economy needs like schools, higher education and apprenticeships."
Derek Brownlee MSP, the Conservative’s shadow Cabinet Secretary for Finance & Sustainable Growth, added: "As a fuel crisis sweeps the globe, the SNP is trying to build the case for independence on the volatile price and diminishing supply of oil.
"The SNP seems to be highly selective in its crystal ball gazing – for example the accompanying study only runs until 2013 and ignores the North Sea Oil decommissioning costs, which might well produce much smaller or even negative oil tax revenues in later years.
"On GERS itself, as the data shows, in 2006-07, the estimated fiscal balance in Scotland, that is the estimated current budget balance plus estimated net investment, was a deficit of £10.2bn (9.7 per cent of Scottish GDP) when excluding North Sea revenue, a deficit of £9.4 bn (8.8 per cent of Scottish GDP) when including a per capita share of North Sea revenue or a deficit of £2.7bn (2.1 per cent of Scottish GDP) when an estimated geographical share of North Sea revenue is included. In other words, Scotland benefits from being part of the United Kingdom.
A full copy of the report is available here.
One person has commented on this article. 1. Swinney says GERS report shows Scotland in surplus
James I McLaren, Unregistered Can we have full and detailed access to the bases upon which the these figures are based; assumptions and sources?
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