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Key Scottish economic figures to be published Further improvement in Scotland's public finances
(about 4 hours later)
The Scottish government is to publish annual economic figures that have become a key battleground in the debate over independence. Scotland's public spending deficit has fallen by a further £1.2bn over the past year, according to Scottish government statistics.
The Government Expenditure and Revenue Scotland (Gers) report estimates the difference between how much the country raises in taxes and how much is spent on its public services. The Government Expenditure and Revenue Scotland (Gers) estimated the country spent £12.6bn more on public services than it raised in taxes.
Last year's report said Scotland spent £13.4bn more than it raised in taxes.. This is lower than the £13.8bn deficit estimated for the previous year, and is equivalent to 7% of the country's GDP.
This deficit was lower than the previous year's £14.5bn. The UK as a whole has a deficit of £23.5bn - or 1.1% of its GDP.
But it still represented 7.9% of Scotland's GDP - four times higher than the UK as a whole and well above the 3% target the EU sets for its members. The annual Gers figures, which have become a key battleground in the independence debate, are compiled by Scottish government statisticians free of political interference.
Economists at the Fraser of Allander Institute say this year's figures are likely to show further improvement when they are released at 09:30, although they do not expect to see a huge change. They estimate the total amount of money spent that "benefits the residents of Scotland" by the Scottish government, UK government, and all other parts of the public sector in Scotland under the current constitutional arrangements, as well as the total amount of revenue raised by taxation.
In a blog posted last week, the institute said: "Scotland will have a larger estimated net fiscal deficit than the UK, although both figures are likely to improve compared to last year. The report said that Scotland raised a total of £62.7bn for the public purse in 2018/19 - about £2.9bn more than the £59.8bn it raised the previous year.
"Gers is likely to show that revenues raised in Scotland are less than the UK average (to the tune of around £500-600 per head): but that spending per head in Scotland is significantly above the UK average (probably around £1,600 per head)." However, the amount the country spent on its public services also increased, from £73.5bn to £75.3bn.
The report also estimated that Scotland raises £307 less per person than the UK average in taxation, while public spending was about £1,660 per person higher than the UK average.
How does Scotland compare to the rest of the UK?How does Scotland compare to the rest of the UK?
The estimated fiscal deficit for the UK as a whole in 2018/19 was £23.5bn - or 1.1% of its GDP. This was £18.3bn less than the previous year and the lowest for 17 years.The estimated fiscal deficit for the UK as a whole in 2018/19 was £23.5bn - or 1.1% of its GDP. This was £18.3bn less than the previous year and the lowest for 17 years.
But most parts of the UK outside of London and its surrounding areas are estimated to raise less revenue than is spent on their behalf.But most parts of the UK outside of London and its surrounding areas are estimated to raise less revenue than is spent on their behalf.
Academics at Cardiff University estimated last month that Wales has a deficit of £13.7bn or 19.4% of its GDP.Academics at Cardiff University estimated last month that Wales has a deficit of £13.7bn or 19.4% of its GDP.
Scotland had a relatively stronger fiscal position than the UK as a whole in 2010/11, but since then the position has been reversed largely because of the collapse in the oil price.Scotland had a relatively stronger fiscal position than the UK as a whole in 2010/11, but since then the position has been reversed largely because of the collapse in the oil price.
Last year's Gers figures estimated that Scotland raised about £1.3bn from the North Sea oil and gas industry in 2017/18, which was higher than the £266m of revenue from the previous year but well below the £8bn the industry generated in 2011/12.
What is Gers anyway?What is Gers anyway?
The Gers report estimates the total amount of money spent that "benefits the residents of Scotland" by the Scottish government, UK government, and all other parts of the public sector in Scotland under the current constitutional arrangements, as well as the total amount of revenue raised by taxation.
It is compiled by statisticians working for the Scottish government and is free from political interference.
Gers was described as the "authoritative publication on Scotland's public finances" in the Scottish government's White Paper on independence ahead of the 2014 referendum.Gers was described as the "authoritative publication on Scotland's public finances" in the Scottish government's White Paper on independence ahead of the 2014 referendum.
The figures were also used as the starting point for the SNP's Growth Commission report, which examined the financial options for an independent Scotland.The figures were also used as the starting point for the SNP's Growth Commission report, which examined the financial options for an independent Scotland.
The commission, headed by former SNP MP Andrew Wilson, suggested that independence would allow Scotland to tackle its deficit through a combination of higher taxes and a squeeze on spending growth, which he said could see the country cut its deficit to 3% in nine years.The commission, headed by former SNP MP Andrew Wilson, suggested that independence would allow Scotland to tackle its deficit through a combination of higher taxes and a squeeze on spending growth, which he said could see the country cut its deficit to 3% in nine years.
But pro-UK parties argue that the Gers figures show that the country would face "unprecedented levels of austerity" in the years after independence.But pro-UK parties argue that the Gers figures show that the country would face "unprecedented levels of austerity" in the years after independence.
The Scottish government has published a list of answers to frequently asked questions about how Gers is compiled here, and the Fraser of Allander Institute has a guide to Gers here.The Scottish government has published a list of answers to frequently asked questions about how Gers is compiled here, and the Fraser of Allander Institute has a guide to Gers here.