Once again the publication of the Government Expenditure and Revenue figures for Scotland become the focus of much heated debate, largely centred on Scotland’s deficit and the issue of ‘volatile’ oil and gas revenues.
It is indeed intriguing to note, however, that while much attention is placed on the Scottish deficit of £9 billion (6.8% of GDP), little focus is placed on the UK-wide deficit of £107.3 billion (7.6% of GDP).
This is in fact the fifth consecutive year that Scotland has demonstrated itself to be in a stronger financial position than the rest of the UK, and compared with other countries shines a very positive light on Scotland’s economy.
Scotland’s oil and gas revenues are a trillion pound asset and are on a sharply rising curve, amounting to £8.8 billion in 2010-11 and set to reach £13.4billion in 2011-12. That other oil rich European country, Norway, sees roughly 20% of its revenue generated through oil and gas while in Scotland in 2009-10 it was c. 14%.
Despite this supposed ‘over-reliance’, Norway managed to deliver a budget surplus of £30bn in 2010 and enjoys one of the highest standards of living in the world.
Over the next five years North Sea oil and gas is forecast to raise £61 billion in tax revenue, 35% more than during the previous five years, money that should be used for the benefit of the Scottish people and invested in an oil fund, rather than being used to fill the UK Treasury’s coffers in London.