THE annual publication of the Government Expenditure and Revenue Scotland (GERS) has, as always, piqued the interest of Scotland's politicians.
This year’s figures are particularly significant because they will be the focus of economic arguments if indyref2 is staged next year.
Once again, politicians and pundits have zeroed in on the size of the public deficit – the amount by which spending exceeds revenue collected through taxes.
The report estimates that the country spent £12.6 billion more on public services than it raised in taxes, down from the £13.8bn deficit estimated for the previous year. That means the overall notional deficit fell by £1.1 billion to 7.0% of GDP over the past year, down from 8%, in 2018-19.
READ MORE: GERS: Scotland's public spending deficit down by more than £1bn
It’s important to note that it’s perfectly normal for countries to run a small budget deficit. Out of the 28 EU nations in 2018, half of them spent more than they raised in taxes.
The Growth Commission had assumed a deficit of 7.7% at this stage – and only had it down to 7.1% by 2021/22. So the report actually showed Scotland was ahead of schedule.
The deficit is also a symptom of the damaging effects of the Union and demonstrate how UK economic activity is concentrated around and balanced in favour of London and the south-east of England. The GERS figures assign a share of UK spending to Scotland on policies which an independent Scotland would not pursue, such as the renewal of the nuclear weapons system Trident. Scotland would also spend less on the UK’s grand network of foreign embassies.
This, however, has not stopped Unionists from insisting that Scotland is too poor to be independent.
Ruth Davidson even went as far as to claim the Scottish Government has been “criminally negligent” in its fiscal management.
Official figures show Scotland is running a 7% deficit - the highet in Europe. The next highest are
— Ruth Davidson (@RuthDavidsonMSP) August 21, 2019
Cyprus - 4.8%
Romania - 3%
France - 2.5%
And the overall UK's deficit has been brought down to 1.1%
For the SNP to pretend a 7% deficit is not an issue is criminally negligent.
READ MORE: GERS report – everything you need to know about today's figures
Finance Secretary Derek Mackay saw the positive side of the results, noting a rise in overall revenue.
He said: “With record tax revenues, strong economic growth and near record low unemployment, Scotland’s economy and public finances are strong. Today’s figures show overall revenue in Scotland reached £62.7 billion – exceeding £60 billion for the first time – reflecting the strength of our economy.
“Our notional deficit has fallen while public spending has increased thanks to our efforts to grow the onshore economy and the strong performance of taxes in Scotland. The Scottish Government’s choices on taxation are helping to create a more progressive tax system."
READ MORE: ‘Rattled’ pro-UK parties attack Sturgeon for missing GERS figures
Scottish Secretary Alister Jack was the next Unionist to claim the deficit was enough reason to rule out independence.
He said the GERS figures "show clearly how Scotland benefits from being part of a strong United Kingdom", claiming every Scot received a "Union dividend" of nearly £ 2000 a year.
"These Scottish Government figures also show there would be a £12.6 billion black hole at the centre of an independent Scotland's finances. Real questions need to be asked about the First Minister's stewardship of the country's economy.
"With Scotland's deficit now more than six-times greater than the UK average, the Scottish Government needs to take action."
Scottish Labour leader Richard Leonard was another to attack on the basis of the deficit figures. He too did not acknowledge the role of Westminster in contributing to the total.
Leonard called for the First Minister "to admit that her independence plans would mean unprecedented cuts for Scotland's schools and hospitals".
He added: "These figures underline the importance to Scotland's vital public services like our NHS of remaining part of the UK.
"A stand-alone Scotland would have one of the biggest fiscal deficits in the developed world, and the SNP's shock treatment plan to close it is by dumping the pound and imposing unprecedented levels of austerity."
The Scottish Greens said the figures underline the need for a Scottish Green New Deal.
Co-leader Patrick Harvie said: “The figures are also a reminder of the urgent need to build a post-oil economy, whether Scotland is part of the UK or not. Independence would force us to face that urgency, but would also give us the powers to fully develop the Scottish Green New Deal agenda that is necessary.”
The UK as a whole has a deficit of £23.5bn – or 1.1% of its GDP. This was £18.3bn less than the previous year and the lowest for 17 years.
But Harvie said the figures “disguise the immense human cost that has been paid to reduce the deficit”.
He added: The UN described the cruelty, rising child poverty, record levels of hunger and homelessness that have characterised that deficit cut as 'punitive, mean-spirited, and often callous'.
“Thankfully the rapporteur also praised Scotland for mitigating some of that, but the SNP need to come off the fence and have an honest debate about tax, including on asset wealth and corporations.”
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