SCOTLAND’S Finance Secretary has said new public finance figures and forecasts show that Scotland’s place in the Union is “financially unsustainable” and demonstrates why it needs to become independent.
Kate Forbes spoke out after the latest Government Expenditure and Revenue Scotland (GERS) statistics showed spending amounted to
£15.1 billion more than ministers received in revenues.
The figure equates to a notional fiscal deficit of 8.6% of GDP in 2019-20, according to the data, up from 7.4% the year before.
At a media briefing on the report Forbes set out how better prepared small independent countries were in dealing with the turmoil caused by the pandemic, borrowing at record low rates to fund job guarantee schemes and initiatives to revive their economy in the wake of the pandemic.
However, despite repeated requests, the UK Government has refused to hand greater borrowing powers to the Scottish Government.
Speaking to journalists Forbes reiterated her call for the Scottish Government to have further financial powers.
She said: “Although GERS is not the Scottish Government’s budget and reflects the current constitutional arrangements whereby another government’s policy choices are allocated to Scotland, the publication sets out the context for why the status quo and the present constitutional arrangements are unsustainable.”
She added it was “incredibly frustrating” that Scotland could not borrow to invest in recovery.
She said: “GERS reflects the current constitutional position. There are perfectly legitimate questions to ask about these figures, but based on these figures nobody can or should defend the status quo of the current constitutional arrangements.
“Instead, this publication once again strengthens calls for additional fiscal and economic powers to manage our public finances in a sustainable way and invest in recovery.
“Scotland simply cannot afford not to have the powers of a normal independent country.”
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The Finance Secretary was asked about the Fraser of Allander Institute think tank’s initial response to GERS, which said Scotland’s deficit could grow to around 21% and 22% next year, and if this would be sustainable for an independent Scotland.
She said countries around the world had built up “unprecedented deficits” to deal with the pandemic which would be reduced over time.
Asked about the higher levels of per capita public spending in Scotland, she said: “I look at those figures and see the current constitutional arrangements as being unsustainable.”
She was also pressed on 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 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.
Forbes revealed she would not be publishing an alternative set of figures showing what the situation would be under independence. Her predecessor Derek Mackay previously suggested he would set out those statistics.
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