NORTH Sea oil revenues fell by 55 per cent between 2013-14 and 2014-15, helping Scotland’s deficit soar to £14.9 billion, according to the latest statistics.
The Government Expenditure and Revenue Scotland (GERS) bulletin for 2014-15 says the deficit, the difference between what the country spends and what it receives in tax revenue, is now at 9.7 per cent of Gross Domestic Product (GDP) compared to the overall UK deficit of 4.9 per cent. If a geographic share of offshore tax revenue is not included in the figures, the deficit would be £16.7bn, or 11.9 per cent.
First Minister Nicola Sturgeon insisted Scotland’s economy had remained resilient despite “difficult conditions” and said the growth in the country’s onshore revenues would make up for the falling oil revenue. She said: “Taken in the context of the wider economic environment, which has been impacted by muted global demand, falling oil prices and more difficult conditions for manufacturers, the economy has remained resilient with record levels of employment, positive economic growth and growing exports.
“This shows the foundations of Scotland’s economy are strong and that we have a strong base to build our future progress upon.”
Sturgeon added: “Despite the fact the onshore economy accounts for more than 90 per cent of
Scotland’s output, Scotland is not immune to the problems being felt by the oil industry.
“It is important to bear in mind that these are figures from just one year and while we are doing what we can to mitigate these problems, this needs immediate action from the UK Government.”
Sturgeon said more powers for Scotland would provide “more ability to grow and diversify our tax base”.
The figures, released yesterday, showed the total spending “for the benefit of Scotland” by the Scottish Government, UK Government, and all other parts of the public sector was £68.4bn, around £12,800 per person. Income from tax was £10,000 per person. Compared to the UK average, £1,400 more is spent per person in Scotland.
Included in the spending was £11.5bn on health, £7.6bn on education and £2.8bn on policing.
Scotland Office Minister Andrew Dunlop said: “These figures show that Scotland is facing challenging economic times, in particular because of the drop in oil price, and demonstrate the value of the broad shoulders of the United Kingdom.
“The UK and Scottish governments both have a responsibility to work hard and support the Scottish economy in difficult global conditions, and that is exactly what we will continue to do.”
Opposition parties pointed out that the figures were released just two weeks ahead of what would have been independence day had Scotland voted Yes in 2014’s referendum.
Labour’s Kezia Dugdale said: “The fact that the cuts that would have been needed after separation would have been five times more than those being imposed now by George
Osborne gives a sense of the impact on our schools and hospitals. People were misled by the SNP in the run-up to the referendum and that is unforgivable.”
Patrick Harvie from the Greens said: “These figures prove that Scotland is in urgent need of a bold transition plan that will secure high-quality jobs and energy production in the face of North Sea oil industry decline.
“Estimates by the Scottish Greens show that Scotland can create 204,000 jobs in industries such as renewable energy, decommissioning and energy efficiency. But with the Tory attack on the renewable sector and the SNP’s painfully slow response to the growing demand for decommissioning, it’s clear that our governments are lacking the vision and political will to start planning ahead properly.”
Business for Scotland’s CEO Gordon MacIntyre-Kemp said: “The unprecedented fall in oil price has impacted on Scotland’s fiscal position, but can’t hide the fact that Scotland’s onshore economy has been shown to be highly resilient.
“The figures highlight what being part of the United Kingdom, and therefore not enjoying the protection of a mechanism to deal with the impact of oil price volatility such as a sovereign oil fund, can do to Scotland’s fiscal position.”
Speaking to CommonSpace, the Professor of Enterprise Policy at Heriot-Watt University, Michael
Danson, said the comparison between the Scottish and UK economies missed the “wider context” of the global economy. You’d be excused from thinking that the world had shrunk to just Scotland and the rest of the UK if you relied on the commentaries from politicians and the media for analysis of the GERS figures. There are precious few attempts to put them in a wider context.”
“A fundamental restructuring of Scotland’s economy is needed, as also applies for our cousins in England, Wales and Northern Ireland, away from a dependence on externally controlled finance, oil and gas, and arms sectors and towards a sustainable and much more equal economy. Innovation, wellbeing and inclusion then follow naturally.”
Ignore the too-wee, too-poor mantra ... stats prove Scotland needs more powers
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