Public finances

Swinney dodges oil and gas issue in indy plan

John Swinney at the Bayes Centre in Edinburgh (pic: Terry Murden)

Interim Finance Secretary John Swinney today dodged questions on whether soaring oil and gas revenues would underpin the SNP’s future forecasts on economic prospects.

New figures showed the deficit in Scotland’s public finances – the difference between income and expenditure – stood at 12.3% of GDP compared to 6.1% for the UK.

Revenue from oil and gas was £3.5bn, up from £0.8bn the previous year, as energy prices recovered from the falls during the pandemic.

The report said the oil price increased from $18.38 per barrel in April 2021 to $117.25 in March 2022, while gas prices rose from 55p per therm to 314p.

When North Sea oil revenue is removed from the data, Scotland ‘s deficit soars to 15.7% or £27.2bn.

Following publication of the latest Government Expenditure and Revenue Scotland (GERS) figures, Mr Swinney told reporters that he could not comment on whether the party’s calculations would emulate those of Alex Salmond in 2014 which relied heavily on North Sea revenues.

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He also declined to say whether the party would accept the Growth Commission’s recommendation to set oil and gas revenue aside.

The data shows that Scots are £2,184 per person better off than those in the rest of the UK, but Mr Swinney did not rise to a question that this showed how Scotland benefits from a “union dividend”.

He insisted that the data shows Scotland is recovering faster than the rest of the UK.

“The figures are a snapshot and demonstrate where the powers lie. People have to look at the figures and what they tell us about the prospects for the United Kingdom,” he said.

Struan Stevenson, chief executive of pro-union group Scottish Business UK said: “If this autumn’s Supreme Court judgement is set to tell us why the SNP government can’t hold a competent referendum next year, today’s GERS figures come as a timely reminder of why they shouldn’t have been trying.   

“Despite the Scottish Government’s attempt to spin the 2021/22 GERS figures as supportive of their case for separation, they showed that total Scotland-related public sector expenditure rose to £97.5 billion, while income from taxes fell to £73.8 billion.

“That leaves a gap of £23.7 billion, or 12.3% of GDP, that had to be filled by a fiscal bailout from Westminster. The UK deficit was less than half that of Scotland at 6.1% of GDP. 

“On this basis, at a time when public anxiety over the cost-of-living and soaring energy bills is skyrocketing, millions of Scots will be wondering why a fresh bout of constitutional upheaval would be anything but a bad idea.

“Breaking up the UK single market would only fuel inflation when we need to get and keep it back under control, just as having to get to grips with Scotland’s public spending deficit without UK support would set back any hope of a return to economic growth.”

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