Scotland’s fiscal deficit over twice the UK’s as a percentage of GDP

Money - PA

The gap between Scotland’s spending and revenue represents a net fiscal deficit of £14.8bn including notional share of oil revenues, or 9.5 per cent of GDP, according to Government Expenditure and Revenue Scotland 2015-16 (GERS) figures published this morning.

The figures show a slight drop from the last GERS figures, published in March, but Scotland still has a deficit well over twice the UK’s as a percentage of GDP, and higher than any other OECD country.

The UK now has a deficit at 4.1 per cent of GDP. The EU Maastricht treaty in 1997 limited members to a deficit of only 3 per cent of GDP.

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GERS show a tax take equivalent to £10,000 per person in Scotland, with expenditure of £12,800 per person, £1,200 per person greater than the UK average.

The Scottish figures includes a representative geographic share of oil income, which has fallen 97 per cent since 2014 from £1.8bn to just £60m.

However First Minister Nicola Sturgeon said a £1.9bn increase in onshore revenues meant Scotland’s economy remained strong.

“The lower oil price has, of course, reduced offshore revenues, with a corresponding impact on our fiscal position - this underlines the fact that Scotland's challenge is to continue to grow our onshore economy,” she said.

“However, Scotland’s long-term economic success is now being directly threatened by the likely impact of Brexit.”

Scottish secretary David Mundell said the figures showed how Scotland benefited from being in the UK.

“Scotland weathered a dramatic slump in oil revenues last year because we are part of a United Kingdom that has at its heart a system for pooling and sharing resources across the country as a whole,” he said.

GERS refers to public sector revenue and expenditure only.