News

Public finances continue to improve

Published: 22 Aug 2018 09:35
Part of:
Economy

Revenues increase as economy accelerates.  

Scotland's public finances are continuing to improve, with total revenue reaching £60 billion, as the economy grew twice as fast as the UK at the start of 2018.

Onshore tax revenue increased by £2 billion in 2017-18, with offshore revenue increasing by more than £1 billion according to the Government Expenditure and Revenue Scotland (GERS) figures published today.

Growth in revenues and the economy resulted in an overall improvement in the public finances, with both the current and net fiscal deficits falling.

First Minister Nicola Sturgeon and Finance Secretary Derek Mackay visited Glasgow University to welcome its pledge to spend £1 billion on campus infrastructure over the next ten years, saying this commitment demonstrates the confidence that exists in the Scottish economy. But she reiterated warnings that Brexit - and the prospect of being removed from the Single Market and Customs Union - remained by far the biggest threat to Scotland's economy.

The First Minister said:

"On the back of continued economic growth and rising revenue, Scotland's deficit fell again in 2017-18.

"Looking at the wider economic picture, these figures - along with recent Labour Market Stats, Labour Productivity and GDP figures - show that Scotland is on the right trajectory.

"It also demonstrates that our commitment to sustainable economic growth is the right one and we will continue to stimulate our economy in this way to reduce the deficit.

"Today's figures also show that offshore revenue has increased by £1 billion.  This comes on the back of recent analysis by the Oil and Gas Authority that production this year is expected to be 18% higher than in 2014. Separately, the latest Fraser of Allander Oil and Gas survey also shows that net confidence of oil and gas contractors is at the highest level since spring 2013.

"Scotland continues to perform well against other parts of the UK. The latest EY Attractiveness Survey showed that Scotland remains the top UK region for foreign direct investment (FDI) projects outside of London.

"With the limited economic powers currently at our disposal, The actions we are taking to promote sustainable economic development are helping to ensure that the key economic indicators are moving in the right direction. Brexit is by far the biggest threat to this progress - and it is essential that the UK Government commits to remaining in the Single Market and the Customs Union to minimise the potential damage."

Mr Mackay said:

"The latest economic data points to an improving picture in Scotland. Our economy grew twice as fast as the UK in the most recent quarter, while unemployment remains close to its record low and confidence is returning to the oil and gas sector.

"Today's figures show overall revenue in Scotland reaching £60 billion for the first time ever, underlining the fact that we have a productive and growing economy, despite the UK Government's London centric economic policies.

"Meanwhile, Scottish exports of goods have increased by 12% over the past year - the fastest rate of growth of any nation in the UK - with huge potential for further expansion in key overseas markets.

"However, that export success and wider potential is directly threatened by the UK Government's drive to take Scotland out of the world's largest single market, which is around eight times bigger than the UK market alone. That poses a huge risk to Scottish jobs, investment and living standards, which is why we will do all we can to secure the least damaging Brexit possible."

Background

The full statistical publication is available at http://www.gov.scot/gers.