Scotland's public finances

“Scotland at the moment is a net beneficiary of the fiscal union between England and Scotland. That hasn’t always been the case, but it is at the moment. However, Scotland would be a net contributor to the EU”

Merryn Somerset Webb, 17 November 2016

The gap between what the Scottish government spends and what it collects in taxes is higher than the rest of the UK, according to its official figures. So at the moment, Scotland’s public finances benefit from fiscal union.

This hasn’t always been the case. The benefit varies from year-to-year. If we include Scotland’s geographical share of oil revenue, which goes to the UK government as a whole, then Scotland’s percentage deficit was smaller than the rest of the UK in 2005/6, and for four years from 2007/8 until 2011/12.

And it’s hard to say what Scotland’s public finances would look like after independence. It’s not clear what responsibility an independent Scotland would take for costs like UK government debt - that would have to be negotiated. And the revenues from North Sea oil and gas are also quite uncertain, since the price of oil and gas is relatively changeable.

Whether or not an independent Scotland would be a net contributor to the EU - and whether it would be able to remain a member in the first place - is a task for another day. Although it makes sense that as a comparatively rich country it would pay in more than it gets out. Analysis from both the Scottish and UK governments seems to back that up.