First minister suggests a Scottish exit from the EU would exacerbate Scotland’s deficit
THE SNP has issued a renewed warning about the economic consequences of Brexit after statistics were released showing that Scotland continues to have a sizeable budget deficit.
Its intervention follows the publication of economic statistics showing that the difference between Scottish tax revenue and Scottish public sector spending in the last financial year was £14.8bn, roughly 9.5 per cent of GDP. The figures also showed that Scotland’s tax contribution per head averaged £10,000, compared with £10,400 for the rest of the UK.
The figures come from the annual GERS set of economic statistics, which are released each year showing the health of the Scottish economy and which provide figures relating to Scotland’s levels of tax revenue, public sector spending, and a breakdown of the tax take.
“This underlines the fact that Scotland's challenge is to continue to grow our onshore economy.” Nicola Sturgeon
Commenting on the figures, First Minister Nicola Sturgeon acknowledged the challenges highlighted by them: “The lower oil price has, of course, reduced offshore revenues, with a corresponding impact on our fiscal position – this underlines the fact that Scotland's challenge is to continue to grow our onshore economy.”
But she added that the economic risks posed by Brexit could exacerbate the situation: “Today’s figures come a day after analysis from Scottish Government showed that taking Scotland out of the European Union and our place in the world’s biggest single market would make the task of growing and diversifying the Scottish economy even harder.”
The comments referred to a report published by the Scottish Government on Tuesday, which looked at the potential economic impact of Brexit on Scotland. It argued that Scotland could lose between £1.7bn and £11.2bn by 2030 if it was to leave the EU with the rest of the UK. Tax revenues, meanwhile, would also be expected to fall by between £1.7bn and £3.7bn.
She added: “The foundations of our economy remain strong. Scotland, in terms of economic output per head – and even excluding offshore revenues – remains the most prosperous part of the UK outside of London and south-east England.”
“Addressing failures in financial and investment markets can counter some of the negative effects of the current dysfunctional UK economy” Professor Mike Danson
The Scottish Conservatives, meanwhile, said it underlined the case for Scotland staying in the UK. Murdo Fraser, the party’s finance spokesperson, said: “Today’s GERS analysis simply confirms the fact that Scotland benefits massively from being a member of the United Kingdom.This union dividend amounted to £1,600 for every man, woman and child last year, according to these figures.”
Speaking on behalf of WiSE, a feminist economics research centre at Glasgow Caledonian University, Dr Angela O’Hagan said: “At WiSE, we think that for economic growth to be inclusive and transformative there has to be investment in social infrastructure for care; Scotland’s tax powers used to generate revenue for public services such as affordable childcare”
“At WiSE, we think that for economic growth to be inclusive and transformative there has to be investment in social infrastructure for care” Dr Angela O’Hagan
She continued: “[This] in turn will mean a boost in employment for women – and men – and in tax revenue from new jobs; and a real effort to transform the labour market so that under-valued, low paid jobs for women and the gender pay gap they reinforce are no longer the status quo.”
Professor Mike Danson, an economist at Heriot Watt University, told CommonSpace: “With excellent human and natural resources Scotland should be able to restructure our economy towards more socially productive uses and so raise productivity, profitability and welfare in an upward spiral of prosperity and wellbeing.
He added: “Addressing failures in financial and investment markets, illustrated by the shambles over PPP/PFI schemes, the waste of graduate and skilled labour, by expanding the economy by democratising the ownership and management of land, economies and knowledge, local businesses and economies can secure stability and sustainable growth to counter some of the negative effects of the current dysfunctional UK economy”
“Today’s GERS analysis simply confirms the fact that Scotland benefits massively from being a member of the United Kingdom.” Murdo Fraser
The Scottish Green Party’s co-convener economy and finance spokesperson, Patrick Harvie, called on the Scottish Government to seize alternative opportunities: "These figures will inevitably set off another round of empty rhetoric, just as they do evey year, between those who think the SNP can do no wrong and those who think Scotland can never aspire to govern itself.”
He reitered his calls to seize the opportunities in new industries: “In truth, the figures show what has been clear for years - that a strong future for Scotland's economy will depend on ending our reliance on oil and gas, and investing in the industries of the 21st century instead.”
Picture courtesy of Scottish Government
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