The Scotsman

Scots receive record £1500 more per person than rest of UK

●SNP deny Scotland being subsidised as spending figures trigger fresh row

- By SCOTT MACNAB

Scots now receive a record £1,500 more in spending on public services per head than taxpayers across the UK as a whole, official figures have revealed.

But First Minister Nicola Sturgeon rejected claims that Scotland is effectivel­y “subsidised” by the UK as the latest snapshot of public finances north of the Border showed a £13.4 billion annual spending “deficit.” At 7.9 per cent of Scotland’s economy, this is four times the UK level.

The figures prompted claims from pro-union politician­s that an independen­t Scotland would effectivel­y be living beyond its means.

The deficit in Scotland has fallen by more than £1bn, according to the Government Expenditur­e and Revenue Scotland (GERS) figures.

But public spending for every Scot is £1,576 higher than the Uk-wide equivalent, the figures for 2017-18 show, while Scotland contribute­s £306 less per head in tax.

The annual breakdown of Scotland’s public finances published yesterday again provoked fierce exchanges about the country’s constituti­onal future.

Ms Sturgeon said the figures painted a more positive picture than the assumption­s made in the SNP’S Growth Commission on an independen­t Scotland – due to be debated by party members at a series of national assemblies starting on Saturday. The SNP leader said she wants to bring the Scottish deficit down to the 3 per cent internatio­nal norm, although the reduction of the deficit came as the economy grew and revenues rose.

“Scotland is on the right trajectory,” she said. “It also demonstrat­es that our commitment to sustainabl­e

economic growth is the right one and we will continue to stimulate our economy in this way to reduce the deficit.”

Scots benefited from £13,530 of public spending per head in 2017-18. This compares with the UK average of £11,954.

The £306 less per head in taxes plus the extra £1,576 per capita spend amounted to a so-called “union dividend” of £1,882.

“I think if you look over the piece and the contributi­on of Scottish tax revenues onshore and offshore to the UK Treasury over a period of years, I think probably you have to conclude that it is perhaps more than fair,” the First Minister added. “We’ve more than paid our way.”

Scottish Secretary David Mundell said the 7.9 per cent deficit as a share of GDP north of the Border was “concerning”.

But he said: “These figures also confirm that being part of a strong United Kingdom – the fifth largest economy in the world – is worth nearly £1,900 for every single person in Scotland, which supports vital public services.

“Simply put, Scotland contribute­d 8 per cent of UK tax, and received more than 9 per cent of UK spending for the benefit of families.”

Total spending across Scotland’s public sector was 0 David Mundell said figures showed value of the Union

£73.4bn in 2017-18, the figures show, while £60bn was raised in taxes.

Although the GERS figures are often portrayed as an indicator of how the nation’s finances might look under independen­ce, most experts agree they only provide a snapshot of the current situation and how the economy would stand on “Day 1” of independen­ce.

They are compiled by Scottish Government civil servants and are based on a mixture of estimates and actual spend.

A marked improvemen­t in the North Sea saw oil revenues jump by more than £1bn last year, the figures show. Scotland’s illustrati­ve share of North Sea revenue increased from £266 million in 2016-17 to £1.3bn.

Professor Graeme Roy of the respected Fraser of Allander think tank said: “With both onshore revenues and expenditur­e rising, the relative improvemen­t in Scotland’s fiscal position has largely been driven by a better outturn on North Sea Revenues.

“Whilst revenues from Scotland’s share of the North Sea have increased, they remain much lower than in previous years. The Office for Budget Responsibi­lity predict that North Sea revenues for the UK as a whole will remain around £1bn for the foreseeabl­e future.”

The biggest increase in spending came in transport, which was up by £490m last year to £3.84bn, while welfare spending also soared with a £439m rise in social protection to £23.56bn.

The cost of private finance initiative (PFI) and non-profit distributi­ng (NPD) schemes to build public buildings such as schools and hospitals has also reached a record £1.25bn in unitary charges.

The economy north of the Border has been growing at a faster rate than the UK, even setting aside the North Sea revival, recent figures have shown.

Scotland’s deficit is also in line with most regions of the UK, Ms Sturgeon said, insisting that the heavy concentrat­ion of economic activity in London makes the south-east of England the “outlier”.

But Scottish Labour leader Richard Leonard said: “These figures show that the real change Scotland needs isn’t to leave the UK – it’s a Labour government willing to end austerity and invest instead.

“People across Scotland are sick and tired of austerity – and these figures show that the SNP’S plans for independen­ce would mean unpreceden­ted levels of austerity for Scotland.”

Liberal Democrat leader Willie Rennie said the figures were a “cruel blow” to the SNP’S dream of independen­ce.

“Whichever way you look at it, under Nationalis­t plans all the good things we all want to do in Scotland would be under threat because of funding cuts,” he said. “Investing in people through education and mental health would be harder under independen­ce.”

Tracy Black, CBI Scotland director, said: “An uptick in oil revenues has had a positive effect, due to higher oil prices, however Scotland still has room to improve its fiscal deficit compared with the UK as a whole. Only by supporting the private sector to grow the Scottish economy can we deliver the sustainabl­e public services we all want for Scotland.”

“Scotland is on the right trajectory. It demonstrat­es that our commitment to sustainabl­e economic growth is the right one” NICOLA STURGEON First Minister

 ??  ?? If the hat fits: Nicola Sturgeon wears it well on a visit to the site of Glasgow University’s new learning and teaching hub yesterday. She said the GERS figures show ‘Scotland is on the right trajectory’.
If the hat fits: Nicola Sturgeon wears it well on a visit to the site of Glasgow University’s new learning and teaching hub yesterday. She said the GERS figures show ‘Scotland is on the right trajectory’.
 ??  ?? Finance secretary Derek Mackay and First Minister Nicola Sturgeon give a press conference on the GERS figures during a visit to Glasgow University’s Wolfson building site yesterday with the institutio­n’s Neal Juster and Ann Allen
Finance secretary Derek Mackay and First Minister Nicola Sturgeon give a press conference on the GERS figures during a visit to Glasgow University’s Wolfson building site yesterday with the institutio­n’s Neal Juster and Ann Allen
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