London Daily

Focus on the big picture.
Thursday, Jul 10, 2025

Scotland’s soaring deficit is no barrier to independence, says minister

Scotland’s soaring deficit is no barrier to independence, says minister

Scottish finance secretary says notional deficit of £36.3bn for 2020-21 does not undermine case for leaving UK
Scotland‘s deficit more than doubled to £36.3bn, or 22.4% of GDP in 2020-21, the highest yearly figure since devolution, but it should not be an obstacle to making the case for independence, according to Scotland’s finance secretary.

Increased spending and falling revenues as a result of the Covid-19 pandemic, compounded by the continuing oil price slump, increased Scotland’s notional deficit for 2020-21 from 8.6% of GDP in 2019-20, to 22.4%.

This is significantly higher than the 14.2% for the UK as a whole, and more than twice the advanced economy average of 11.7% estimated by the International Monetary Fund. The figure could rule an independent Scotland out of EU membership because of the rules on fiscal deficits.

But Scotland’s finance secretary, Kate Forbes, said deficits had increased hugely across the world as a result of the pandemic, adding: “It is not an obstacle to making the case for independence because deficits across the world have risen exponentially and having the highest deficit in Europe does not seem to be an obstacle for the UK government ... This is a case for having the levers, the full control to manage our fiscal sustainability.”

The annual Government Expenditure and Revenue Scotland (GERS) report, compiled by Scottish government statisticians, illustrates how public finances were affected by the pandemic. It measures the period from April 2020 – a week after the first national lockdown began – to the end of March this year and includes a geographical share of North Sea oil.

Total spending in Scotland rose to a record £99.2bn, reflecting the costs of health and economic interventions such as furlough in response to the pandemic, while income from taxes fell to £62.8bn.

But opposition parties said the report underlined the importance of remaining within the UK, with Scottish Labour highlighting that total spending was equivalent to £18,144 per person – £1,828 per person greater than the UK average, while revenue raised in Scotland was £382 less per head.

The Scottish Conservatives calculated that this “union dividend”, the combined value of higher spending and lower revenue, had increased to £2,210 per person.

The Scottish Labour deputy leader and Covid recovery spokesperson, Jackie Baillie, said: “Today’s GERS statistics plainly show how the people of Scotland benefit financially from being part of the United Kingdom.”

She added it was “reckless beyond imagining to pursue a divisive and economically catastrophic referendum during the recovery”.

Nicola Sturgeon said during the Holyrood election campaign earlier this year that her “strong preference and intention” was to hold another referendum in the first half of the parliament, up to 2023.

Forbes said she “remains committed to refreshing the economic case [for independence] ...when we are able to see beyond the pandemic”.

While the GERS figures are an estimate, the Institute for Fiscal Studies has previously described them as “the most sensible starting point” for assessing the fiscal challenges that an independent Scotland would face.

Forbes said this was a “notional deficit – not a real deficit – estimated on 70% UK government taxation and 40% of UK decisions on spending. The Scottish government in the event of independence could and would follow a different programme when it comes to managing our economy.”
Newsletter

Related Articles

0:00
0:00
Close
Severe Heatwave Claims 2,300 Lives Across Europe
NVIDIA Achieves Historic Milestone as First Company Valued at $4 Trillion
Declining Beer Consumption Signals Cultural Shift in Germany
Linda Yaccarino Steps Down as CEO of X After Two Years
US Imposes New Tariffs on Brazilian Exports Amid Political Tensions
Azerbaijan and Armenia are on the brink of a historic peace deal.
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Weinstein Victim’s Lawyer Says MeToo Movement Still Strong
U.S. Enacts Sweeping Tax and Spending Legislation Amid Trade Policy Shifts
Football Mourns as Diogo Jota and Brother André Silva Laid to Rest in Portugal
Labour Expected to Withdraw Support for Special Needs Funding Model
Leaked Audio Reveals Tory Aide Defending DEI Record
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
London Stock Exchange Faces Historic Low in Initial Public Offerings
A new online platform has emerged in the United Kingdom, specifically targeting Muslim men seeking virgin brides
Trump Celebrates Independence Day with B-2 Flyover and Signs Controversial Legislation
Boris Johnson Urges Conservatives to Ignore Farage
SNP Ordered to Update Single-Sex Space Guidance Within Days
Starmer Set to Reject Calls for Wealth Taxes
Stolen Century-Old Rolls-Royce Recovered After Hotel Theft
Macron Presses Starmer to Recognise Palestinian State
Labour Delayed Palestine Action Ban Over Riot Concerns
Swinney’s Tax Comments ‘Offensive to Scots’, Say Tories
High Street Retailers to Enforce Bans on Serial Shoplifters
Music Banned by Henry VIII to Be Performed After 500 Years
Steve Coogan Says Working Class Is Being ‘Ethnically Cleansed’
Home Office Admits Uncertainty Over Visa Overstayer Numbers
JD Vance Questions Mandelson Over Reform Party’s Rising Popularity
Macron to Receive Windsor Carriage Ride in Royal Gesture
Labour Accused of ‘Hammering’ Scots During First Year in Power
BBC Head of Music Stood Down Amid Bob Vylan Controversy
Corbyn Eyes Hard-Left Challenge to Starmer’s Leadership
London Tube Trains Suspended After Major Fire Erupts Nearby
Richard Kemp: I Felt Safer in Israel Under Attack Than in the UK
Cyclist Says Police Cited Human Rights Act for Riding No-Handed
China’s Central Bank Consults European Peers on Low-Rate Strategies
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Musk Battles to Protect Tesla Amid Trump Policy Threats
Air France-KLM Acquires Majority Stake in Scandinavian Airlines
UK Educators Sound Alarm on Declining Child Literacy
Shein Fined €40 Million in France Over Misleading Discounts
Brazil’s Lula Visits Kirchner During Argentina House Arrest
Trump Scores Legislative Win as House Passes Tax Reform Bill
Keir Starmer Faces Criticism After Rocky First Year in Power
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
×