By David Scott in Edinburgh
26 June 2009
The row over Scotland’s ability to stand on its own financially has been reignited by the news that it would show a small surplus if it received its share of North Sea oil.Both Labour and the Scottish National Party claimed that the Government expenditure and revenue Scotland report, which assesses tax income raised compared with money spent, justified their opposing views on fiscal autonomy.
Labour said the figures for 2007/08 proved that Scotland had a fiscal deficit. However, the Scottish National Party government argued that with the oil revenues there would have been a current expenditure budget surplus in each of the three years from 2005/06.
Finance Secretary John Swinney said: ‘The GERS figures show Scotland in current budget surplus… when the UK current budget was in deficit. Scotland has been in current budget surplus now for three years, to the tune of almost £2.3bn. The GERS figures confirm that Scotland stands on a firm financial footing – firmer than the UK as a whole.’
But Scottish Labour’s finance spokesman Andy Kerr accused the SNP of misleading the Scottish people with ‘fantasy politics’. Even when a geographical share of North Sea oil is included, Scotland would have had a fiscal debt of £3.8bn when capital spending was taken into account, he insisted.
According to the figures, published on June 18, Scotland was £219m in surplus in 2007/08 if a geographical share of North Sea oil revenues is included.
Excluding oil revenues, however, the deficit for the year was £7.1bn. When estimated capital expenditure is taken into account, the deficit increased to £11.1bn.
The £219m current budget surplus – equivalent to 0.2% of gross domestic product – compared with a UK deficit of £5.3bn, or 0.4% of GDP, the figures showed.
Scottish Secretary Jim Murphy said: ‘Even if all the oil revenue had been given to Scotland for the last 27 years, then we would still be £20bn short of the actual spending that has taken place.’
The Scotland Office produced separate figures showing that if all North Sea oil revenues went to Scotland, the country’s finances would have been in surplus for only nine of the past 27 years.
