The annual public expenditure estimates, which cover all taxes and spending by the Scottish and UK governments, found that Scotland raised £73.8bn in taxes last year, including North Sea oil revenue, and spent 97 £.5 billion. The Government Expenditure and Revenue Scotland (GERS) report estimated a deficit of £2,184 per person for the 2021-22 financial year, the highest on record. This compared to £1,925 the previous year and £2,091 in 2019-2020. If revenue from North Sea oil taxes were excluded, Scotland would have raised around £70.3bn. This would mean a total spending gap of £27.2 billion, or £2,768 per head, more than £500 higher than the previous largest gap. John Swinney, Scotland’s deputy first minister, said the GERS figures also showed that, on a percentage basis, Scotland’s deficit as a measure of economic output fell by much more (10.3%) year-on-year than the UK’s deficit Vassiliou (8.4%). “Today’s figures show that Scotland’s fiscal position is recovering faster than the UK’s, with a huge fall in the annual deficit thanks to the biggest increases in revenue on record,” he said. However, this calculation ignored the fact that proportionately the UK’s deficit fell more significantly, by 58% year-on-year compared to 46% in Scotland. This year’s GERS figures, and comparisons with 2020-21 figures, are heavily influenced by the dramatic impact of the pandemic, which has largely suppressed the economy and led to record levels of government spending, distorting the overall picture. Gary Gillespie, the Scottish Government’s chief economist, was unable to say how much of Scotland’s record tax revenue came from UK Government spending on Covid, but said Scotland spent more per head on policies relief. The UK government said the GERS data showed Scotland fared much better within the UK, which shared its resources. Alistair Jack, the Scottish minister, said the figures showed “how people and their families benefit massively from being part of a strong, resilient UK”. He said: “[At] In a time of unprecedented challenges, sharing resources in the UK has never been more important.” The 18% rise in tax revenue was largely due to an increase in oil and gas revenue, based on Scotland’s geographic share of the North Sea and North East Atlantic. This increase in oil revenue poses significant political challenges for Nicola Sturgeon’s government as it seeks to shore up independence and push for the right to hold a new referendum in October 2023. Archie Bland and Nimo Omer take you to the top stories and what they mean, free every weekday morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. After setting tough net zero targets for Scotland, the First Minister accepted that the world needed to cut oil consumption sharply in the face of the climate emergency and agreed with the conclusion of the Scottish National Party’s own growth committee that revenue from oil was too volatile to form part of the central case for independence. This is largely because oil revenues fell to zero soon after Sturgeon’s predecessor, Alex Salmond, had built the case for independence in 2014 on rising oil receipts. On Wednesday, Swinney’s forecast for next year’s oil and gas receipts suggested they would top £13bn – a record high. He said Wednesday’s GERS figures “highlight how the UK’s response to [cost of living] The crisis is building on Scotland’s natural resources, particularly with its unexpected toll on the North Sea.” Swinney declined to say whether Sturgeon’s forthcoming independence finance paper would accept the growth committee’s advice on ignoring oil revenues. His argument about the value of oil taxes will fuel intense pressure from nationalist campaigners for Sturgeon to use a booming oil and gas sector to make the economic case for leaving the UK, despite her pro-climate rhetoric. It will also reveal deep tensions within the independence movement with the Scottish Greens, who want to shut down Scotland’s oil fields.
