Scots revenue rises to £63bn as ‘deficit’ falls £1.1bn

Public sector revenue in Scotland reached £62.7 billion in 2018-19, exceeding £60 billion for the first time, with Scotland’s onshore revenues increasing 5.1% to reach £61.3 billion.

This was the fastest growth in Scotland’s onshore revenues since 2010-11 as Scotland’s overall “notional” deficit fell by £1.1 billion to 7% of GDP in 2018-19, down from 8%.

That’s according to the Government Expenditure and Revenue Scotland (GERS) figures published on Wednesday.

Total public sector expenditure “for the benefit of Scotland” by the Scottish Government, UK Government and “all other parts of the public sector” was £75.3 billion, an increase of 2.4%.

According to the GERS report, this is equivalent to 9.3% of total UK public sector expenditure, and £13,854 per person, which is £1,661 per person greater than the UK average.

Therefore, the report said Scotland’s “notional” net fiscal balance — the difference between total revenue and total public sector expenditure including capital investment — was a “notional” deficit of £12.6 billion (7% of GDP), including North Sea revenue.

The Fraser of Allander Institute think tank at the University of Strathclyde said: “It is always important to remember that GERS takes the current structure of UK Government reserved taxation and spending as given.

“If the very purpose of independence is to take different choices about the type of economy and society that we live in, then a set of accounts based upon the current constitutional settlement and policy priorities will tell us little about the long-term finances of an independent Scotland.

“But GERS does provide a pretty accurate picture of where Scotland is in 2019.

“So in doing so, today’s numbers set the starting point for a discussion about the immediate choices and challenges that need to be addressed by those advocating new fiscal arrangements.”

Finance Secretary Derek Mackay said: “With record tax revenues, strong economic growth and near record low unemployment, Scotland’s economy and public finances are strong.

“Today’s figures show overall revenue in Scotland reached £62.7 billion – exceeding £60 billion for the first time – reflecting the strength of our economy.

“Our notional deficit has fallen while public spending has increased thanks to our efforts to grow the onshore economy and the strong performance of taxes in Scotland.

“The Scottish Government’s choices on taxation are helping to create a more progressive tax system.

“This strong performance from Scotland’s economy is at risk as a result of the UK Government’s EU exit plans, and in particular a ‘no deal’ Brexit, which poses a severe threat to jobs, investment and living standards

“A ’no deal’ Brexit could reduce revenues in Scotland by around £2.5 billion a year, holding Scotland back and demonstrating why people in Scotland increasingly recognise the importance of making our own decisions.

“These figures reflect Scotland’s position as part of the UK. The Scottish Government believes we could unlock our full potential with independence, allowing us to take the best decisions for Scotland.

“As we have always said, Scotland has a strong, and growing, economy and our future will be far brighter as an independent member of the EU.”