Scots receive record £1500 more per person than rest of UK
●SNP deny Scotland being subsidised as spending figures trigger fresh row
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