The rise of the Nationalist deficit conspiracy

On the face of it, the numbers are damning. The Scottish government has released the latest annual edition of Scotland’s public finances. It does not paint a pretty picture. Scotland’s notional deficit has more than doubled from £15.8 billion to £36.3 billion, taking the nation’s fiscal shortfall from 8.8 per cent of GDP to 22.4 per cent. This figure factors in a geographical share of North Sea oil revenue and compares to a UK deficit of 14.2 per cent. That is not only the largest deficit of the devolved era but more than double that seen in the wake of the global financial crisis in 2009/10.

The figures also show public spending per head in Scotland continuing to outstrip the UK average, up from £1,754 in 2019/20 to £1,828 in 2020/21. Despite the Cameron government devolving sufficient powers over income tax for Holyrood to create its own Scottish Rate of Income Tax, with a top rate of 46 per cent, GERS records Scotland bringing in £382 less in annual revenue per person.