Today the Scottish Government published Government Expenditure and Revenue Scotland – or ‘GERS’ for short – for the year 2017-18.
GERS is produced every year and provides estimates of total public spending in Scotland, as well as tax receipts for the previous five years. It provides a snapshot of Scotland’s public finances – as part of the UK – but is far from the full picture.
Here’s what you need to know.
Scotland’s onshore economy grew by £2 billion in 2017-18
Onshore revenues – excluding North Sea revenues – increased by £2 billion between 2016-17 and 2017-18. North Sea revenue also grew from £266 million to £1.3 billion. Meanwhile, Scotland’s notional deficit fell by £1.1 billion in 2017-18 – a 10.8 per cent drop – and stood at 7.9 per cent of GDP.
Scotland’s economy is strong
Scotland’s employment rate is increasing and unemployment is falling. On both youth and female employment, Scotland is outperforming the UK as a whole.
Over the last year Scotland’s economy has grown faster than the UK as a whole.
Scotland’s exports have increased by 44.7 per cent since the SNP came to office in 2007.
Scotland is the top destination in the UK, outside London, for foreign direct investment.
Health and education spending remains higher than across the UK
GERS shows that the Scottish Government is investing £157 more per head than the UK Government on health, and £217 more on education.
The SNP Scottish Government is also investing more in growing our economy. Spending on economic development in Scotland is higher than the UK as a whole – to the tune of £109 per head.
And, when it comes to capital investment, which accounts for spending on public infrastructure like hospitals and schools, spending is £379 higher per head in Scotland than in the UK as a whole.
Scotland’s public finances are in line with the UK outside of London
Office for National Statistics figures show that Scotland’s revenue per head is the fourth highest of any UK nation or region.
GERS figures don’t take account of the impact of Brexit
Our long-term economic success is now threatened by Brexit – something that isn’t captured by GERS. Analysis published by the Scottish Government shows that leaving the EU could reduce Scottish tax revenues by between £1.7 billion and £3.7 billion a year by 2030. For the Scottish economy as a whole, it could cost up to £12.7 billion a year by 2030.
GERS tells us about Scotland’s finances within the UK and very little about the opportunities we can seize in an independent Scotland
Scotland is rich in human talent and natural resources. But we lack the economic levers to maximise growth in our economy, and invest according to our own priorities. Even after the Smith Commission powers are fully implemented, 71 per cent of taxes raised in Scotland will be controlled in Westminster.
The figures used also factor in UK government spending choices – for example on Trident – which would be entirely different under an independent Scottish Government. And, our ability to grow our population – and our tax base – is held back by UK government migration policy too.
In an independent Scotland, the Scottish Government could design policies that are tailored to Scotland’s – not the UK government’s – circumstances. Professor Graeme Roy – director of the Fraser of Allander Institute – has said: “If the very purpose of independence is to take different choices about the type of economy and society that we live in, then a set of accounts based upon the world today will tell us little about the long-term finances of an independent Scotland.”
An independent Scotland could tackle the deficit we would inherit from the UK without austerity
We reject the Tories’ failed austerity economics. The Sustainable Growth Commission has shown that we can increase public spending year on year in real terms, while reducing the deficit inherited from the UK.
If the Commission’s proposals had been followed in the ten years to 2019-20, the Scottish Government’s budget would have gone up. Instead, Westminster will have cut £3.6 billion from Scotland’s budget by the end of the decade.
And all of this doesn’t take into account the opportunities of increased growth from an independent Scotland having an economic policy tailored to Scotland’s needs.