SCOTLAND would have been able to deal with the coronavirus crisis and introduce a furlough scheme during the pandemic if it had voted Yes in 2014, Kate Forbes has said.
The Finance Secretary made the point during a media briefing on today's public finance figures. However, she ruled out the publication of an “alternative” report this year by the Scottish Government.
According to this year’s Government Expenditure and Revenue Scotland (GERS ) statistics , Scotland’s notional onshore deficit – the difference between income and expenditure – rose 0.6% to 9.4% of GDP – the same rate of increase as the UK.
Taking account of North Sea revenues which totalled £724 million – £642m less than in 2018-19 – the notional overall deficit stood at 8.6% of GDP.
Asked at a media briefing whether if Scotland had voted for independence six years ago it would have been able to cope with the current health and economic crisis and introduce the furlough scheme, which is funded by the UK Government, Forbes said it would.
"The short answer is absolutely yes, in the same way as small, independent ... economies around the world have provided fiscal interventions. Countries around the world have borrowed at record low interest rates, in fact some of them are borrowing at negative interest rates in order to fund their interventions and have also built up massive deficits in the process. None of them are reconsidering whether or not they should be independent," she said.
"What they are doing is using the levers they have control over to help manage both the health and economic crisis and invest in recovery."
She went on to point out how New Zealand and coped with the pandemic and underlined that as a result of the no vote Scotland was not able to get support from the EU pandemic support scheme.
READ MORE: GERS: New figures underline the case for independence, Kate Forbes says
During the briefing Forbes revealed that there were no current plans to publish an “alternative” set of Gers figures showing the country's public finances under independence.
The idea was floated by her predecessor Derek Mackay in January.
However asked where the alternative GERS document was today, Forbes said: “I spent the last few months trying to balance the budget to ensure that we’ve got a response to the pandemic, so that’s been my focus for the last months.”
Later pressed if she would revive the idea next year, she added said: “I mean a year is a long time and who knows what will happen in the coming year.
“As I said earlier this year I’ve been primarily focused on the pandemic which is not over and the legacy of which will continue to be felt in the coming months and that means my priority continues to be responding to the pandemic.”
According to today’s publication, tax revenues increase in 2019-20, although they were impacted by the initial effects of coronavirus (COVID-19).
The report shows that overall revenues, including North Sea receipts, increased to a record £65.9 billion. Onshore revenues grew by £1.1bnto reach £65.2bn.
These increases came despite the pandemic depressing public finances. Corporation and VAT receipts fell compared to the previous year and both the Scottish and UK Governments increased spending to tackle the virus As a result of this, Forbes said the figures emphasised how COVID-19 had fundamentally changed the fiscal landscape.
"The Scottish Government has responded swiftly to the challenges of COVID-19 and has worked hard to protect Scotland’s economy, providing over £2.3bn of support to businesses," she said.
"The public finances were already facing challenges this year due to the uncertainty caused by Brexit. We are now witnessing an unprecedented health and economic crisis. Countries across the world, including the UK, have increased borrowing to record levels and, as we emerge from the pandemic, high fiscal deficits will inevitably be one of the consequences.
"That is why the UK Government should prioritise economic stimulus over austerity. I will also continue to press for the Scottish Government to be granted additional financial powers to enable us to tailor a response that meets Scotland’s needs."
She added: “Scotland, unlike most other countries around the world, large and small, does not currently have the full financial powers needed to chart a way to sustainable recovery from the economic impact of the pandemic. The current situation, with the looming withdrawal of furlough support by the UK Government, means it is now more urgent than ever that we gain those powers.
“Despite the pandemic, and the economic problems that inevitably will arise at the end of the Brexit transition period, we are determined that Scotland should emerge with a stronger, fairer, greener, and more resilient economy. We continue to invest to protect and create jobs, support businesses and strengthen communities, but our ability to do that is constrained by our lack of borrowing powers.
“It is important to stress that 40% of spending and 70% of revenue income in GERS, combined with key powers over the economy, are reserved to the UK Government and outside the control of the Scottish Government.
“An independent Scotland would have the power to make different choices, with different economic budgetary results.”
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