SCOTLAND'S deficit has continued to fall at a faster pace than the UK's - thanks to record revenues from the oil and gas sector and an increase in income tax collected.
The latest Government Expenditure and Revenue Scotland (GERS) figures released on Wednesday morning, show that the total revenue for Scotland increased by £15 billion (20.7%) compared with just 11.3% for the UK as a whole.
This includes a £6.9bn increase in North Sea revenue and a £1.9bn increase from Scottish income tax.
The Scottish Government said the increases have "partially been offset by a rise in spending on cost of living measures and interest payments on UK Government debt".
Neil Gray, Cabinet Secretary for Wellbeing Economy, Fair Work and Energy, said he was "pleased that Scotland's finances are improving at a faster rate than the UK as a whole".
The GERS figures set out the difference between total revenue and total public sector expenditure, to calculate the net fiscal balance.
The figures show that in 2022-23 Scotland’s net fiscal balance was a deficit of 9.0% of GDP.
This is down from 12.8% in 2021-22 and 23.4% in 2020-21, at the height of the pandemic.
For this fiscal year, Scotland's fiscal balance fell 3.8%, while the UK deficit remained at 5.2%.
This publication marks the 30th year of GERS statistics.
It also showed that Scottish public sector revenue was estimated at £87.5 billion, 8.6% of UK revenue as a whole.
With £9.4bn of revenue coming from the North Sea, this means £78.1bn in revenue came from elsewhere.
Non-North Sea revenue increased by £8.1bn in 2022-23, an increase of 11.5%, largely due to growth in income tax, national insurance contributions, VAT and non-domestic rates.
Scotland's share of North Sea revenue increased from £2.4bn in 2021-22, following the introduction of the Energy Profits Levy.
The figures also revealed that the total expenditure by the Scottish Government, UK Government and all other parts of the public sector in Scotland totalled £106.6bn.
This was a spending increase of £9.3bn (9.5%), due to to increases in reserved public sector debt interest payments, which are linked to inflation, and cost of living support.
On the publication of the statistics, while visiting the University of Glasgow's Mazumdar-Shaw Advanced Research Centre, Gray (below) said: “I am pleased that Scotland’s finances are improving at a faster rate than the UK as a whole, with revenue driven by Scotland’s progressive approach to income tax and our vibrant energy sector.
"While the record revenues from the North Sea show the extent that the UK continues to benefit from Scotland’s natural wealth, these statistics do not reflect the full benefits of the green economy, with hundreds of millions of pounds in revenue not yet captured.
“It is important to remember that GERS reflects the current constitutional position, with 41% of public expenditure and 64% of tax revenue the responsibility of the UK Government.
"Indeed, a full £1bn of our deficit is the direct result of the UK Government’s mismanagement of the public finances. An independent Scotland would have the powers to make different choices, with different budgetary results, to best serve Scotland’s interests.
“While we are bound to the UK’s economic model and do not hold all the financial levers needed, we will continue to use all the powers we do have to grow a green wellbeing economy, while making the case that we need independence to enable Scotland to match the economic success of our European neighbours."
Gray made the comments on a visit to the University of Glasgow to learn about the economic potential of quantum technology to Scotland's economy.
"This could be worth £1bn to our economy within seven years, highlighting just how bright Scotland’s future could be outside of the UK," Gray added.
Alba said the figures showed that the reported and projected oil revenues should act as the “engine room of the early years of an independent Scotland”.
MP Neale Hanvey added: "Meanwhile the deployment of carbon capture technology on an industrial scale in the North Sea and as a condition of development can make that investment compatible with the future of the planet.
"The independence movement would be foolhardy to disregard such a massive economical and political opportunity.
“However, GERS are merely a snapshot of Scottish expenditure and revenues as part of the UK, they don’t scratch the surface of Scotland’s renewable potential that we will benefit from in the years to come, or account for Scotland having no say on UK expenditure on wasteful obscenities such as Trident."
Commenting on the figures, Scottish Secretary Alister Jack (above) said: “The Scottish Government’s own figures show yet again how people in Scotland benefit hugely from being part of a strong United Kingdom.
“Scotland’s deficit is more than £19bn - even in a year of exceptional North Sea Revenues. Without oil and gas, that figure soars to more than £28bn."
Jack claimed that people in Scotland "benefit to the tune of £1521 per person" due to higher levels of public spending.
“As we face cost of living pressures and unprecedented global challenges it is clear Scotland is better off as part of a strong United Kingdom," he added.
The Scottish Tories claimed the figures showed a "Union dividend".
Shadow finance secretary Liz Smith said that the figure "wholly reaffirm" the vital role the North Sea sector will play in Scotland's economy, and claimed "every other political party" had turned their back on it.
She said: "It is astonishing that every other political party – including the SNP-Green coalition and Keir Starmer’s Labour Party - have turned their backs on the industry.
"It is only the Scottish Conservatives who are standing up for the highly-skilled workforce and recognising the importance of the sector to Scotland’s finances.
“With public spending at its highest ever level, it is also clear that the SNP have squandered the record funding settlement delivered from the UK Government.”
