Foundations of Scottish economy strong Says First Minister

The foundations of Scotland’s economy are strong, First Minister Nicola Sturgeon has said today, as new figures show onshore revenue has grown by more than £6 billion over the last five years.

Government Expenditure and Revenue Scotland 2014-15 (GERS) shows Scotland’s estimated onshore revenue grew by 3.2 per cent in 2014-15 to £51.6 billion, with overall growth of £6.1 billion from £45.5 billion in 2010-11.

Including North Sea revenue, tax receipts per person have also remained broadly in line with the UK as a whole, at approximately £10,000 per person.

However, the publication also shows the impact of the decline in North Sea revenue, with Scotland recording a net fiscal deficit equivalent to 9.7 per cent of GDP in 2014-15. Excluding public sector investment, the current budget balance is equivalent to 7.8 per cent of GDP.

First Minister Nicola Sturgeon said:

“The annual GERS publication shows our onshore economy is doing well, with estimated onshore revenue growing by 3.2 per cent and tax receipts broadly comparable to the rest of the UK.

“Taken in the context of the wider economic environment, which has been impacted by muted global demand, falling oil prices and more difficult conditions for manufacturers, the economy has remained resilient with record levels of employment, positive economic growth and growing exports.

“This shows the foundations of Scotland’s economy are strong and that we have a strong base to build our future progress upon.

“These GERS figures show our strategic priority of investing in economic growth – with spending per head on economic development in Scotland more than twice the UK average.

“However – despite the fact the onshore economy accounts for more than 90 per cent of Scotland’s output – Scotland is clearly not immune to the problems being felt by the oil industry internationally.

“Although it is important to bear in mind that these are figures from just one year, and while we are doing what we can to mitigate these problems, this needs immediate action from the UK Government.”

Deputy First Minister John Swinney urged the UK Government to cut tax in order to make the North Sea more competitive globally:

“In next week’s UK Budget, I urge the Chancellor to take bold steps. Immediate action is needed to support the industry and make the North Sea more internationally competitive – primarily by a substantial reduction in the headline rate of tax.

“I am also urging the Chancellor to remove fiscal barriers for exploration and enhanced oil recovery, to implement fiscal reforms to improve access to decommissioning tax relief and encourage late life asset transfers, and urgently consider additional non-fiscal support – such as government loan guarantees – to sustain investment in the sector.

“The North Sea needs urgent help from the UK Government, both for the sake of the industry and the wider economy.”