Sturgeon defends independence

poses real questions for those who have overall control of economic policy,” she said.

She pointed to a recent breakdown of deficit levels across the different regions of the UK, published by the ONS.

“That analysis showed that London and the south-east hugely skew the overall UK position.

”So when you take that out Scotland is not particularly an outlier, our fiscal position is broadly in line with other parts of the UK.

“So that raises questions about the balance of UK economic policy.”

The GERS figures show pubic spending is higher in Scotland, by £1,437 per head, than the UK average. Ms Sturgeon admitted that the there were “challenges” ahead for Scotland’s fiscal outlook, but welcomed a record bounce in the country’s onshore economy.

The £13.25bn deficit represents an 8.3 per cent share of Scotland’s GDP, more than three times the UK figure of 2.4 per cent.

Ms Sturgeon said she wants the deficit brought down to 3 per cent of GDP in line with most European nations.

But she said the improvement in the overall fiscal balance for 2016/17 was “encouraging”, with the deficit down by £1.3bn from 2015/16 when it stood at 9.3 per cent of GDP.

“Scotland’s economy remains strong,” the First Minister said.

“In the last quarter, our economy grew nearly four times faster than the UK and the number of people in employment is at a record high.

“However, they show that our investment in key industries, such as the lifescience sector, is providing a real boost to our onshore economy.”

The GERS figures have come in for some criticism among Nationalists who say much of the statistics are based on estimates in key areas such as whisky revenues and the way Ukwide spending in areas such as defence are extrapolated in Scotland.

Ms Sturgeon insisted she was not “quibbling about the essence or reliability of the statistics” which were official Scottish Government figures, but said there were “inherent limitations”becauseoftheestimates.

The report shows that North Sea revenue rose from £56 million in 2015/16 to £208m over the past year. This compares with average annual revenues of about £5-7bn in the years leading up to 2014 before the current oil price crash.

Tory finance spokesman Murdo Fraser said the figures show the union dividend which Scotland enjoys in the UK.

He said: “The truth is that when times are tough – as they have been in Scotland over the last few years – we can rely on the weight of the whole UK to ensure schools, hospitals and public services remain decently funded.”

He called on the SNP to now focus on growing Scotland’s economy.

Labour leader Kezia Dugdale said: “These figures prove once and for all that the SNP sold false hope to the poorest people in Scotland. Scotland’s own accounts show that the first year of an independent Scotland would have meant unprecedented levels of austerity.”

Liberal Democrats Willie Rennie said: “Oil revenues have tanked since 2014.

“The Scottish Government must commit to provide a formal written explanation to show why its taxpayer-funded independence white paper was so hopelessly wrong on oil revenues.

“Tens of thousands of people were given copies of the white paper.

“The Scottish Government owes each of them an explanation for the gross error in the forecast.”

Nicola Sturgeon with chief science officer Professor Steve Anderton