Scotland has been in a relatively stronger fiscal position than the UK over the five years to 2012-13 as a whole by the value of £8.3 billion - or £1,600 per person - according to new statistics published today.
The 2012-13 Government Expenditure and Revenue Scotland (GERS) report, which estimates levels of tax and spending in Scotland, demonstrates that, including a geographical share of North Sea oil and gas, tax revenues in Scotland were £800 higher per head compared to the UK in 2012-13.
The GERS figures show that, even with a drop in oil revenues caused in part by record tax deductible £14 billion investment spending by oil companies and unplanned production stoppages, Scotland’s current budget balance in 2012-13, at 5.9 per cent of GDP (£8.6 billion), was almost identical to the United Kingdom current budget balance of 5.8 per cent (£91.9 billion).
Including a geographical share of North Sea revenues, Scotland’s net fiscal balance in 2012-13, which adds in the higher levels of capital investment in Scotland, was a deficit of 8.3 per cent of GDP, compared to a deficit of 7.3 per cent of GDP for the UK.
However, a five-year analysis of the official statistics, also published by the Scottish Government today, showed that throughout the recession Scotland’s net fiscal balance, was on average significantly stronger than the UK as a whole.
First Minister Alex Salmond said:
“Today’s GERS report confirms what independent commentators and analysts have been making clear: Scotland is one of the wealthiest countries in the world.
“The figures show that tax revenues generated in 2012-13 were £800 higher per head in Scotland compared with the UK, meaning that now for every one of the last 33 years, tax receipts have been higher in Scotland than the UK.
“Over the past five years, Scotland’s public finances have been relatively healthier than the UK’s by a total of £8.3 billion - the equivalent of nearly £1,600 per person.
“When looking at the difference between tax receipts and spending on everyday services for 2012-13, today’s report shows Scotland and the UK were both in current budget deficit – by almost identical amounts as a percentage of GDP.
“The net fiscal deficit – which includes investment spending – was one percentage point higher in Scotland than for the UK. This reflects the higher level of capital spending in Scotland which will boost the economy in the long term.
“The Scottish Government made a deliberate decision to switch spending from current to capital budgets to help fight the recession. This has helped recovery and created jobs. It will pay off in the future. We also decided to keep water services in the public sector.”
The First Minister continued:
"North Sea revenues fell by 41.5 per cent between 2011-12 and 2012-13. This - in part - was caused by unplanned disruption to production and record capital investment by the oil and gas industry which has doubled since 2010. This will reduce tax receipts in the short-term but maximise tax revenues in the future.
“Despite these factors, Scotland’s net fiscal deficit was only one percentage point higher than the UK figure in 2012-13.
“For the future, Oil and Gas UK forecasts that production will increase by 14 per cent between 2013 and 2018. And the recent Wood Report made clear the huge benefits that will accrue for many decades to come.
“Where we have the powers the Scottish Government is doing whatever we can to build a more secure future for the people who live here - prioritising investment and taking decisions that will pay off for the long-term.
“The coming referendum presents an opportunity to ensure that the key economic decisions are taken in Scotland for Scotland. Having responsibility for our own finances and our own vast natural resources would allow us to make choices in our own best interests.”