GERS: A deficit is no barrier to becoming independent, Nicola Sturgeon says

Speaking at the Scottish Poetry Library following the announcement of Scotland's new makar Kathleen Jamie, the First Minister addressed the new data.

The deficit more than doubled to 22.4% of GDP in 2020/21, the highest yearly figure since the Scottish Government’s annual accounts began two decades ago.

Spending increased by 21% during the year, reflecting the impact of the pandemic, while average public spending per person also rose to £1828 above the UK average.

Sturgeon said: “Obviously every country has a deficit and deficits that have grown and become massive over the pandemic because rightly, governments have chosen to support the economy and to support individuals. 

READ MORE: GERS Day: What is the annual report and why is everyone talking about it?

“When we see spending increases in Scotland that’s a good thing because it shows that support has been there and is being provided to people and public services across the country.

“Having a deficit is not, self-evidently, a barrier to any country in the world being independent. Independent countries manage their deficits but also independent countries make the most of their talents, their resources and their attributes to build strong sustainable economies and that is, I think, the future that Scotland should grasp. 

“The fiscal position of Scotland now is a feature of how we are governed within the UK. It is not any indication of what life would be like in an independent Scotland, and there is no reason whatsoever that Scotland as an independent country wouldn’t have the same ability to succeed as countries across the world, many of whom have far fewer resources and attributes than Scotland does."

Asked how Scotland could manage a deficit after independence, the First Minister said: “The way that every independent country manages their deficits, through appropriate approaches to public spending. In Scotland’s case, I think that should always completely reject any austerity approach, the careful and appropriate use of borrowing, which is how the UK Government is funding spending right now. 

READ MORE: Richard Murphy: GERS is a con-trick intended to make Scotland look bad

“Remember the UK Government in more than 60 out of the last 75 years has had a deficit and manages that deficit. Much of the pandemic spending the UK has rightly done d has been funded through borrowing. 

“These questions about how countries manage deficits are not theoretical abstract questions, you can find the answer to that by looking at almost any country across the world."