SNP says indy Scot­land would pros­per de­spite £12bn deficit

●Gap falls slightly but re­mains six times higher than across the rest of the UK

The Scotsman - - FRONT PAGE - By SCOTT MACNAB

Derek Mackay has in­sisted Scot­land could pros­per as an in­de­pen­dent coun­try de­spite of­fi­cial fig­ures re­veal­ing a £12.6 bil­lion black hole be­tween pub­lic spend­ing and the taxes raised to fund them.

The fi­nance sec­re­tary said Scotof land could do things dif­fer­ently out­side the UK af­ter the Gov­ern­ment Ex­pen­di­ture and Rev­enue Scot­land (GERS) showed Scot­land’s deficit had fallen slightly to 7 per cent as a share the econ­omy in 2018-19. The SNP min­is­ter said: “We could make other choices if we had the pow­ers of in­de­pen­dence.”

The GERS fig­ures spark an an­nual row over the eco­nomics of in­de­pen­dence, with op­po­si­tion par­ties in­sist­ing they un­der­line the value of Scot­land’s mem­ber­ship of the UK.

First Min­is­ter Ni­cola Stur­geon is seek­ing to stage a sec­ond ref­er­en­dum on in­de­pen­dence next year, al­though this has so far been re­jected

by West­min­ster. Scot­land’s deficit, al­though down from 8.5 per cent the pre­vi­ous year, is now six times higher than that across the rest of the UK and higher then any­where else in Europe.

Pro-union politi­cians claimed the fig­ures un­der­line the “Union div­i­dend” Scot­land en­joys, with Scots en­joy­ing pub­lic spend­ing lev­els of £1,661 per head higher than the UK av­er­age.

And al­though Scot­land’s deficit fell by £1.1bn (or 14 per cent) to £12.6bn, this now ac­counts for more than half of the UK’S deficit.

Mr Mackay ac­cepted that the deficit was too high when he un­veiled the fig­ures in Bon­nyrigg, Mid­loth­ian, yes­ter­day.

“The is­sue we have in Scot­land is that macro-eco­nomic pol­icy is still de­ter­mined by the UK,” he said.

“It wouldn’t be the po­si­tion of the fi­nances of an in­de­pen­dent Scot­land on day one.

“The start­ing po­si­tion of an in­de­pen­dent Scot­land would be de­ter­mined by what­ever fi­nan­cial ar­range­ments we have in place and of course we would want to de­liver a sus­tain­able strat­egy that grows our econ­omy, de­liv­ers greater pros­per­ity and fair­ness, chal­lenges the UK eco­nomic model that is fail­ing be­cause it’s far too Lon­don-cen­tric and fo­cused on the south-east of Eng­land.”

The fig­ures show that rev­enues raised by the Scot­tish Gov­ern­ment have risen by £3bn to £63bn, af­ter the SNP in­tro­duced in­come tax rises for higher earn­ers.

Mr Mackay said: “There are choices we could make as an in­de­pen­dent coun­try around what we spend.

“The fact that we’re rais­ing more in Scot­land, we’re rais­ing enough to pay for de­volved ser­vices, so­cial pro­tec­tion, I think it shows there are choices we can make around re­served ex­pen­di­ture.

“To give you an ex­am­ple £6.5bn is as­signed to ei­ther debt in­ter­est or de­fence spend­ing.

“That’s a fig­ure that’s al­lo­cated to Scot­land, it doesn’t ac­tu­ally re­flect what’s ac­tu­ally spent in de­fence in Scot­land.”

De­spite the rise in taxes be­ing col­lected, rev­enues raised in Scot­land amounted to £11,531 per head.

This is £307 be­low the UK av­er­age, de­spite the sig­nif­i­cantly higher pub­lic spend­ing lev­els north of the Border.

Con­ser­va­tive­fi­nance­spokesman Murdo Fraser stepped up calls for the SNP to ditch its bid for in­de­pen­dence.

“These fig­ures re­veal an enor­mous gap be­tween what Scot­land spends and what it raises in tax,” he said.

“These fig­ures make it clear – had­we­fol­lowedalexs­almond and Ni­cola Stur­geon’s ad­vice in 2014 and backed in­de­pen­dence – Scot­land would now be facin­gup­toa­nun­prece­dented fi­nan­cial black hole.”

The 7 per cent deficit could prove to be a stum­bling block to the SNP’S plans to join the Euro­pean Union af­ter in­de­pen­dence, with strict fi­nan­cial rules stip­u­lat­ing that this must not ex­ceed 3 per cent among mem­bers of the bloc.

Labour leader Richard Leonard added: “These fig­ures un­der­line the im­por­tance to Scot­land’s vi­tal pub­lic ser­vices, like our NHS of re­main­ing part of the UK.

“A stand-alone Scot­land would have one of the big­gest fis­cal deficits in the de­vel­oped world, and the SNP’S shock treat­ment plan to close it is by dump­ing the pound and im­pos­ing un­prece­dented lev­els of aus­ter­ity.”

But Pa­trick Harvie, leader of the pro-in­de­pen­dence Greens, said the fig­ures show the need for a “New Deal” out­side the UK.

He added: “In­de­pen­dence must come with a de­ter­mi­na­tion to build a new greener Scot­land, in­stead of pur­su­ing our own ver­sion of the UK’S un­fair, un­sus­tain­able and fail­ing eco­nomic model.”

CBI Scot­land di­rec­tor Tracy Black said the fig­ures showed Scot­land’s fi­nances are “mov­ing in the right di­rec­tion”. But she added: “There’s ab­so­lutely no room for com­pla­cency, par­tic­u­larly as Scot­land still lags way be­hind the rest of the UK when you look at the deficit as a per­cent­age of GDP.

“The in­escapable fact that Scot­land spends more than it raises in tax­a­tion is a timely re­minder of why a thriv­ing and com­pet­i­tive pri­vate sec­tor is essen­tial for fund­ing the kind of pub­lic ser­vices we all want to see.”

“These fig­ures re­veal an enor­mous gap be­tween what Scot­land spends and what it raises in tax”

MURDO FRASER

0 North Sea GDP grew by 29 per cent in 2018-19, helped by ris­ing pro­duc­tion. Left: Derek Mackay and Murdo Fraser

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