Page last updated at 18:22 GMT, Thursday, 18 June 2009 19:22 UK

Row over Scots financial footing

A North Sea oil platform
The report said if Scotland received oil revenue it would have a 219m surplus

The political row over whether Scotland pays its way has intensified, with new figures providing ammunition for both the SNP and its critics.

Scotland's public finances would have been in the black last year to the tune of £219m under one scenario set out by Scottish Government statistics experts.

But other scenarios would have put Scotland in the red by as much as £7bn, the figures suggested.

The finance secretary said the figures showed the benefits of fiscal autonomy.

The figures came in official Government Expenditure and Revenue for Scotland (Gers) figures for 2007-08.

Even before the figures were published, the Scotland Office had launched a pre-emptive strike, publishing its own report which argued that if all North Sea oil revenue went to Scotland, the country's finances would have been in surplus in only nine of the last 27 years.

The last year of surplus would have been 1988-89, said the Scotland Office report.

In family budget terms, Scotland's current account is in surplus, while the UK is in overdraft
John Swinney
Finance Secretary

The latest Gers figures, however, set out three different possible outcomes for 2007-08.

If North Sea oil was excluded from the equation, Scotland's public sector budget deficit had a deficit of £7.1bn, or 6.3% of GDP.

If North Sea oil revenues on a per head of population basis were put into the equation, the deficit would fall to £6.4bn or 5.5% of GDP.

But if Scotland's "geographical" share of oil revenues were put into the equation - giving Scotland nearly all North Sea oil production - there would be a surplus of £219m.

But if capital investment is included in the figures, Scotland would be deeper in the red - with an £11.1bn deficit excluding North Sea oil, a £10.4bn deficit including a per head share of oil revenues, and a £3.8bn deficit including a geographic share of the oilfields.

'Poor position'

On the latest figures, some £45.2bn was raised in Scotland, or 8.4% of the UK total excluding oil revenues, while spending totalled £53.3bn, or 9.6% of the UK total.

Labour finance spokesman Andy Kerr said: "These latest Gers figures continue to show the trend - that without a substantial share of North Sea oil revenues the Scottish net fiscal position is poor with a deficit of around £11bn.

"Even with a geographic share of oil revenues included the net fiscal position continues to show a deficit of almost £4bn, which in terms of a percentage of GDP is worse than the UK position."

A Scotland Office spokesman said: "Today's figures show there was around £11.1bn worth of net investment in Scotland over the last three years.

"That is included in the bottom line in the report itself and it is disingenuous for the Scottish Government to ignore this figure when claiming a surplus."

'Firm footing'

However, Finance Secretary John Swinney said: "The Gers figures show Scotland in current budget surplus at a time when the UK current budget was in deficit.

"To illustrate, in family budget terms, Scotland's current account is in surplus, while the UK is in overdraft.

"This represents the reality of Scotland's budget position, based on the official figures.

"Scotland has been in current budget surplus now for three years, to the tune of almost £2.3bn.

"The Gers figures confirm that Scotland stands on a firm financial footing - firmer than the UK as a whole - and that full fiscal autonomy and independence hold out the prospect of a flourishing and economically successful Scotland."



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SEE ALSO
Warning over 'Scottish oil tax'
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'Precedent' for oil revenue bid
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SNP bid to 'win back' oil and gas
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