Following the release of the latest annual report into Scotland’s public spending, opposition political parties have been using the figures in it to support their case against Scottish independence.
Labour tweeted on September 12, a graphic image that suggested the SNP’s plans for Scottish Independence would “mean cuts of £5758 per head, in Scotland.”
The accompanying text with the tweet said: “Just as we are trying to rebuild from the pandemic, they want to inflict super-charged austerity on Scotland,” along with a link to an Express story that included similar comments from all the main opposition parties at Holyrood.
Ferret Fact Service looked at this claim and found it Unsupported.
Labour have promoted a figure that it claims is the amount public spending would be reduced – per person – if Scotland became an independent country.
Where did this figure come from? And is it realistic?
Every year Scottish Government officials publish a report called the General Expenditure and Revenue Scotland (GERS).
The report provides a snapshot of the money raised in Scotland from taxes and the amount spent on behalf of Scotland by both the UK and Scottish Governments.
The release of the report is often accompanied by controversy as supporters and detractors of Scottish independence try to use the latest figures to bolster their arguments.
In recent years, the figures have shown that less tax has been raised in Scotland than has been spent on providing public services for people that live in Scotland. This difference is sometimes called “the fiscal deficit.”
In the year 2020-21 this deficit was more than £36bn, meaning that spending outpaced taxes by 22 per cent.
In May 2018, The SNP published another report from its Sustainable Growth Commission. This report proposes that, were Scotland to become independent, the government should seek to keep the deficit to a maximum of 3 per cent.
To arrive at the claim that Scottish independence would see a reduction of £5758 in public spending, Scottish Labour have compared the public spending that took place in 2020-21 and calculated how much lower it would have been, had public spending been limited to a 3 per cent deficit instead of a 22 per cent deficit.
The Ferret Fact Service contacted Scottish Labour to find out how they arrived at this figure and the party supplied a spreadsheet with detailed figures.
Do the figures add up?
The calculation that Scottish Labour officials have undertaken is accurate.
However, the methodology misses important context.
Firstly, the figures in the GERS report provide a snapshot of public spending under the current constitutional arrangements in the last financial year.
Were Scotland to become independent in the future many aspects of the wider Scottish economy could change significantly, and the Holyrood government would have other options to control and vary taxes and spending.
The Fraser of Allander Institute says the report “presents a useful starting point for a discussion regarding the challenges and opportunities that Scotland would face”, but stresses that it is based on current constitution arrangements and previous statistics.
It is therefore misleading to suggest that the numbers in the GERS report can reliably give an indication of public spending in a notionally independent Scotland of the future.
Secondly, whilst current SNP government politicians still cite the Sustainable Growth Commission report, there is no guarantee that, were Scotland to become independent, that a future Scottish Government would stick to the 3 per cent deficit spending proposal set out by the Sustainable Growth Commission.
And lastly, 2020-21 was an exceptional year for public spending in the UK as a whole because of the Covid-19 pandemic, as the chart from the Office of National Statistics shows below.
It is not yet clear how Scottish public spending and tax revenue will be affected by Covid-19 in the future.
Given that there are so many unknowns, any claim that attempts to place a specific figure on the cost or benefit to the Scottish people of independence at some point in the future should be treated with caution.
Ferret Fact Service verdict: Unsupported
Neither the GERS report, nor the Sustainable Growth Commission report, can act as a basis for making specific predictions about what public spending might be like in a notionally independent Scotland several years in the future. The figure provided by Scottish Labour should therefore be treated with a great deal of caution.
Ferret Fact Service has made this point about similar claims in previous years.
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