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Oil revenues down 97% as Scotland's deficit increases to almost £15bn

Published 24/08/2016

Figures show North Sea revenue fell from £1.8 billion in 2014/15 to £60 million
Figures show North Sea revenue fell from £1.8 billion in 2014/15 to £60 million

Scotland's share of North Sea oil revenues fell by 97% in 2015/16, according to new figures.

The Government Expenditure and Revenue Scotland (GERS) statistics reveal oil revenues slumped from £1.8 billion in 2014/15 to £60 million in the last financial year.

The figures also show a deficit of £14.8 billion when a geographic share of North Sea revenues is allocated to Scotland, up from £14.3 billion in 2014/15.

That amounts to 9.5% of Scottish GDP, compared with the overall UK deficit of £75.3 billion - 4% of UK GDP.

The plummeting oil revenues were offset by growth in Scotland's onshore revenues of £1.9 billion.

Scottish public sector revenue was estimated at £53.7 billion - the equivalent of £10,000 per person, about £400 per person lower than the UK average.

Meanwhile, public spending in Scotland totalled £68.6 billion.

This is equivalent to 9.1% of total UK public sector expenditure, and £12,800 per person, which is £1,200 per person greater than the UK average.

Opposition parties said the figures illustrate the economic benefits of Scotland remaining in the UK, and expose the "flaws" in the SNP Government's case for independence.

First Minister Nicola Sturgeon said "the foundations of our economy remain strong", while Finance Secretary Derek Mackay stressed the GERS figures represent Scotland's fiscal position as part of the UK and not as an independent nation.

Ms Sturgeon said: "The lower oil price has, of course, reduced offshore revenues, with a corresponding impact on our fiscal position - this underlines the fact that Scotland's challenge is to continue to grow our onshore economy.

"However, Scotland's long-term economic success is now being directly threatened by the likely impact of Brexit.

"Today's figures come a day after analysis from the Scottish Government showed that taking Scotland out of the European Union and our place in the world's biggest single market would make the task of growing and diversifying the Scottish economy even harder."

Addressing the deficit, she added: "I think economic growth is the absolute priority for closing a deficit gap for any country.

"Clearly, as in the UK just now, when you're on a path to closing a deficit, borrowing has a significant role play. Clearly that would be the case if Scotland was dealing with these accounts on its own."

Mr Mackay said: "The position if Scotland was to become independent would depend on a range of factors which are not reflected in this publication."

Scottish Secretary David Mundell said: "Scotland weathered a dramatic slump in oil revenues last year because we are part of a United Kingdom that has at its heart a system for pooling and sharing resources across the country as a whole."

Scottish Conservative finance spokesman Murdo Fraser said: "Today's GERS analysis simply confirms the fact that Scotland benefits massively from being a member of the United Kingdom.

"This union dividend amounted to £1,600 for every man, woman and child last year, according to these figures."

Scottish Labour leader Kezia Dugdale said the figures should "act as a reality check for those calling for another independence referendum", while Scottish Liberal Democrat leader Willie Rennie said the case for independence "has been swallowed up by a £14 billion black hole".

Patrick Harvie, Scottish Greens finance spokesman, said t he figures show Scotland cannot rely on oil for its future, and he called for "a joined up plan" from the Government.

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