Scotland's deficit falls as North Sea revenues reach record

It is despite figures showing spending in Scotland exceeds earnings

Neil Gray has hailed the reduction in the gap as a success
Author: Molly TulettPublished 16th Aug 2023
Last updated 16th Aug 2023

The huge spike in oil and gas prices last year saw Scotland cash in nearly £7bn, and helped to narrow the gap between the Government’s spending and earning.

Scotland's finances are "improving at a faster rate" than the UK as a whole, a key ally of First Minister Humza Yousaf has insisted - despite figures showing spending in Scotland continues to exceed the amount raised in revenue.

Public spending amounted to £106.6 billion in 2022-23, up by 9.5% on the previous year.

North Sea revenues rose to a record £9.4 billion, however overall, the Government Expenditure and Revenue Scotland (Gers) figures show the country had a £19.1 billion deficit - the equivalent of 9% of GDP.

This is in comparison to the UK deficit of 5.2% of GDP.

Reduction hailed as success

However, with the 2021-22 deficit in Scotland at 12.3% of GDP, Wellbeing Economy Secretary Neil Gray hailed the reduction.

He also claimed a "full £1 billion" of the deficit in Scotland was "the direct result of the UK Government's mismanagement of the public finances".

Mr Gray said: "I am pleased that Scotland's finances are improving at a faster rate than the UK as a whole, with revenue driven by Scotland's progressive approach to income tax and our vibrant energy sector."

"The UK continues to benefit from Scotland"

Mr Gray said the Gers figures show how "the UK continues to benefit from Scotland's natural wealth".

But he added: "These statistics do not reflect the full benefits of the green economy, with hundreds of millions of pounds in revenue not yet captured.

"It is important to remember that Gers reflects the current constitutional position, with 41% of public expenditure and 64% of tax revenue the responsibility of the UK Government.

"An independent Scotland would have the powers to make different choices, with different budgetary results, to best serve Scotland's interests.

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