Tag: Economy

Chancellor delivers Tuesday’s UK Government update

Good evening from Downing Street, where I’m joined by Steve Powis, Medical Director of the NHS and Yvonne Doyle, Medical Director at Public Health England.

Earlier today, the government’s independent fiscal watchdog, the Office for Budget Responsibility, the OBR, published a report into the impact of coronavirus on the economy and public finances.

It’s important to be clear that the OBR’s numbers are not a forecast or prediction.

They simply set out what one possible scenario might look like – and it may not even be the most likely scenario.

But it’s important we are honest with people about what might be happening to our economy.

So before I turn to the health figures, I want to spend a few minutes explaining what the OBR have said – and let me thank them for their continued work.

There are three brief points I want to make.

First, the OBR’s figures suggest the scale of what we are facing will have serious implications for our economy here at home, in common with other countries around the world.

These are tough times – and there will be more to come.

As I’ve said before, we can’t protect every business and every household.

But we came into this crisis with a fundamentally sound economy, powered by the hard work and ingenuity of the British people and British business.

So while those economic impacts are significant – the OBR also expect them to be temporary…

…with a bounce back in growth.

The second point I want to make is that we’re not just going to stand by and watch this happen.

Our planned economic response is protecting millions of jobs, businesses, self-employed people, charities and households.

Our response aims to directly support people and businesses while the restrictions are in place…

…and to make sure as restrictions are changed, we can, as quickly as possible, get people back to work; get businesses moving again; and recover our economy.

The OBR today have been clear that the policies we have set out will do that.

The OBR today have been clear that if we had not taken the actions we have, the situation would be much worse.

In other words, our plan is the right plan.

The third point I want to make is this: right now, the single most important thing we can do for the health of our economy is to protect the health of our people.

It’s not a case of choosing between the economy and public health – common sense tells us that doing so would be self-defeating.

At a time when we are seeing hundreds of people dying every day from this terrible disease, the absolute priority must be to focus all of our resources…

…not just of the state, but of businesses, and of all of you at home as well, in a collective national effort to beat this virus.

The government’s approach is to follow scientific and medical advice through our step-by-step action plan, aiming to slow the spread of the virus, so fewer people need hospital treatment at any one time, protecting the NHS’s ability to cope.

I said in my Budget a month ago that whatever the NHS needs, it will get – and we have honoured that promise:

Yesterday we published an update showing that we’ve given our public services an extra £14.5 billion in recent weeks.

We are taking action to increase NHS capacity, with more beds, more key staff and more equipment on the front-line.

And the Secretary of State for Health and Social Care will be updating on our plans for social care tomorrow.

This is why we are instructing people to stay at home, so that we can protect our NHS and save lives.

I can report that through the government’s ongoing monitoring and testing programme, as of today:

  • 302,599 people in the UK have now been tested for coronavirus, with 93,873 people testing positive
  • 19,706 people in the UK have been admitted to hospital with the virus, down from 20,184 people yesterday;
  • Sadly, of those in hospital, 12,107 people have now died – an increase of 778 fatalities since yesterday.

Our thoughts are with the families and friends of all those who have lost their lives.

These figures are a powerful reminder to us all of the importance of following the government’s guidance:

Stay at home. Protect our NHS. And save lives.

Help for the self-employed … but not until June

Chancellor Rishi Sunak made his long-awaited statement on support for the UK’s five million self-employed workers yesterday. That support will not kick in until June at the earliest, however, and does not cover those workers who have been self-employed for less than three years.

This is what he said:

Good afternoon.

Today I can announce the next step in the economic fight against the Coronavirus pandemic, with new support for the self-employed.

Our step-by-step action plan is aiming to slow the spread of Coronavirus so fewer people need hospital treatment at any one time, protecting the NHS’s ability to cope.

At every point, we have followed expert advice to be controlled in our actions – taking the right measures at the right times.

We are taking unprecedented action to increase NHS capacity by increasing the numbers of beds, key staff and life-saving equipment on the front-line to give people the care they need.

That is why it is absolutely critical that people follow our instructions to stay at home, so we can protect our NHS and save lives.

Our action plan to beat the pandemic is the right thing to do – but we know people are worrying about their jobs and their incomes.

Working closely with businesses and trade unions, we have put together a coherent, coordinated and comprehensive economic plan – a plan which is already starting to make a difference:

  • big employers like Brewdog, Timpsons and Pret have already said that our Coronavirus Jobs Retention Scheme means they can furlough thousands of staff, rather than laying them off. And we are publishing this evening detailed guidance on how the scheme will operate so that other businesses can take advantage, too
  • small businesses are already benefiting from Coronavirus Business Interruption Loans of up to £5 million, which are interest free for 12 months – with 30,000 enquiries in just four days
  • local authorities are already informing more than 700,000 retail, hospitality and leisure businesses that they will pay no business rates this year
  • and the new hardship grants scheme, providing cash grants of up to £25,000 for the smallest businesses, is now up and running

So if any business is struggling, and worrying they may need to lose staff, I would urge you to log on to businesssupport.gov.uk, and look very carefully at what support is available before deciding to lay people off.

I’m proud of what we’ve done so far, but I know that many self-employed people are deeply anxious about the support available for them.

Musicians and sound engineers; plumbers and electricians; taxi drivers and driving instructors; hairdressers and childminders and many others, through no fault of their own, risk losing their livelihoods.

To you, I say this: You have not been forgotten. We will not let you behind. We are all in this together.

So, to support those who work for themselves, today I am announcing a new Self-Employed Income Support Scheme.

The government will pay self-employed people, who have been adversely affected by the Coronavirus, a taxable grant worth 80% of their average monthly profits over the last three years, up to £2,500 a month.

This scheme will be open for at least three months – and I will extend it for longer if necessary.

You’ll be able to claim these grants and continue to do business.

And we’re covering the same amount of income for a self-employed person as we are for furloughed employees, who also receive a grant worth 80%.

That’s unlike almost any other country and makes our scheme one of the most generous in the world.

Providing such unprecedented support for self-employed people has been difficult to do in practice.

And the self-employed are a diverse population, with some people earning significant profits.

So I’ve taken steps to make this scheme deliverable, and fair:

  • to make sure that the scheme provides targeted support for those most in need, it will be open to anyone with income up to £50,000.
  • to make sure only the genuinely self-employed benefit, it will be available to people who make the majority of their income from self-employment
  • and to minimise fraud, only those who are already in self-employment, who have a tax return for 2019, will be able to apply

95% of people who are majority self-employed will benefit from this scheme.

HMRC are working on this urgently and expect people to be able to access the scheme no later than the beginning of June.

If you’re eligible, HMRC will contact you directly, ask you to fill out a simple online form, then pay the grant straight into your bank account.

And to make sure no one who needs it misses out on support, we have decided to allow anyone who missed the filing deadline in January, four weeks from today to submit their tax return.

But I know many self-employed people are struggling right now, so we’ve made sure that support is available.

Self-employed people can access the business interruption loans.

Self-assessment income tax payments, that were due in July, can be deferred to the end of January next year.

And we’ve also changed the welfare system so that self-employed people can now access Universal Credit in full.

A self-employed person with a non-working partner and two children, living in the social rented sector, can receive welfare support of up to £1,800 per month.

The scheme I have announced today is fair.

It is targeted at those who need it the most.

Crucially, it is deliverable.

And it provides an unprecedented level of support for self-employed people.

As we’ve developed the scheme, I’m grateful for the conversations I’ve had with the Federation of Small Businesses, the association of Independent Professionals and the Self-Employed, and a range of trade unions, including the Trades Union Congress.

But I must be honest and point out that in devising this scheme – in response to many calls for support – it is now much harder to justify the inconsistent contributions between people of different employment statuses.

If we all want to benefit equally from state support, we must all pay in equally in future.

These last ten days have shaken our country and economy as never before.

In the last two weeks we have put aside ideology and orthodoxy to mobilise the full power and resources of the British state.

We have done so in pursuit of a single goal: to protect people’s health and economic security, by supporting public services like our NHS, backing business, and protecting people’s jobs and incomes.

What we have done will, I believe, stand as one of the most significant economic interventions at any point in the history of the British state, and by any government, anywhere in the world. We have:

  • pledged that whatever resources the NHS needs, it will get
  • promised to pay 80% of the wages of furloughed workers for three months up to £2,500
  • deferred more than £30 billion of tax payments until the end of the year
  • agreed nearly 17,000 Time to Pay arrangements for businesses and individuals
  • made available £330 billion of loans and guarantees
  • introduced cash grants of up to £25,000 for small business properties
  • covered the cost of statutory sick pay for small businesses for up to two weeks
  • lifted the incomes of over four million households with a nearly £7 billion boost to the welfare system
  • agreed three-month mortgage holidays with lenders and nearly £1 billion more support for renters through the Local Housing Allowance
  • and today we’ve announced one of the most generous self-employed support schemes in the world

Despite these extraordinary steps, there will be challenging times ahead. We will not be able to protect every single job or save every single business.

But I am confident that the measures we have put in place will support millions of people, businesses and self-employed people to get through this, get through it together, and emerge on the other side both stronger and more united.

Thank you.

The Federation of Small Businesses (FSB) – who spearheaded calls for additional help for those that work for themselves – warmly welcomed the proposals.

Andrew McRae, FSB’s Scotland policy chair, said: “Thousands of people who work for themselves in Scotland will now breathe a sigh of relief. This scheme will provide lifeline cash to self-employed people, with help targeted at those on low and moderate incomes.

“We need to vanquish the myth that those that work for themselves are universally wealthy. People like the local handyman, cleaner and fitness coach will benefit from this support.

“Like many of these government interventions, it will take a number of weeks for this programme to deliver. Therefore, those who qualify should try their banks for interim finance if required, while doing what they can to manage their outgoings. This will be much easier said than done, but with help on its way many of the self-employed will rest a little easier.”

Official figures show that there are 320,000+ self-employed people in Scotland.

Andrew McRae said: “Throughout this crisis, we’ve found Ministers in Edinburgh and London sympathetic and approachable. These governments deserve credit for delivering support to business who face difficult circumstances that are neither under their control nor their fault.”

TUC General Secretary Frances O’Grady said: “With so many of the self-employed facing a collapse in their earnings the Chancellor is right to act.

“This is a welcome step forward for self-employed and freelance workers across the economy, from construction to the creative industries.

“It’s vital that support reaches workers as soon as possible. Many are already dealing with severe hardship.

“Unions look forward to being consulted on how this scheme is rolled out.”

£1 billion Business Support Fund opens

Grants to help businesses with COVID-19 impact

Businesses can now apply for grants to help them deal with the impact of the coronavirus (COVID-19) outbreak.

The one-off grants are designed to help protect jobs, prevent business closures and promote economic recovery, and more than 90,000 ratepayers across Scotland will be able to benefit.

The grant support is additional to separate tax relief measures and is part of a package of measures worth £2.2 billion.

Small businesses in receipt of the small business bonus scheme or rural relief, as well as hospitality, leisure and retail business can benefit.

Two types of grant are now available to ratepayers:

• a one-off £10,000 grant to ratepayers of small businesses

• a one-off grant of £25,000 available to retail, hospitality and leisure business ratepayers with a rateable value between £18,001 and £50,999

The list is not exhaustive and if businesses think they may be eligible for one of these grants, they should contact their local authority, which are administering the scheme on behalf of the Scottish Government.

Cabinet Secretary for Finance Kate Forbes said: “While our primary concern is for people’s health, it is clear that the Coronavirus (Covid-19) outbreak will have severe economic consequences, and we are treating it as an economic emergency.

“We are determined to help keep companies in business and support them and their staff during this difficult time.

“Local authorities are the most efficient way to deliver this and we have worked closely with them to deliver these measures – and eligible businesses can apply now.

“Local authorities will aim to make payments within 10 working days, and I’d like to thank them for their help in ensuring this support is delivered as quickly as possible.

“The COVID-19 situation, however, is both severe and fast-moving and requires a coordinated UK response: I will continue to work closely with the UK Government and the other devolved administrations.”

More information on how to apply can be found at:
https://www.mygov.scot/non-domestic-rates-coronavirus/

Chancellor announces worker support package

The Chancellor has outlined an unprecedented package of measures to protect millions of people’s jobs and incomes as part of the national effort in response to coronavirus.

The support comes as the UK Government instructs entertainment and hospitality premises, like bars and restaurants, to close to limit spread of coronavirus.

A new Coronavirus Job Retention Scheme will be set up to help pay people’s wages. Employers will be able to contact HMRC for a grant to cover most of the wages of their workforce who remain on payroll but are temporarily not working during the coronavirus outbreak.

Any employer in the country- small or large, charitable or non-profit will be eligible for the scheme.

Universal Credit and tax credits will also be increased as part of an almost £7 billion welfare boost, as he outlined one of the most generous business and welfare packages by any government so far in response to Covid-19.

To ease cash flow pressures for UK VAT registered businesses, VAT bills from now until the end of June, will be deferred until the end of the tax year.

The Chancellor’s workers’ support package means:

  • UK workers of any employer who is placed on the Coronavirus Job Retention Scheme can keep their job, with the government paying up to 80% of a worker’s wages, up to a total of £2,500 per worker each month. These will be backdated to 1st March and will be initially open for 3 months, to be extended if necessary.
  • VAT payments due between now and the end of June will be deferred. No VAT registered business will have to make a VAT payment normally due with their VAT return to HMRC in that period. Income tax payments due in July 2020 under the Self Assessment system will be deferred to January 2021, benefitting up to 5.7m self-employed businesses.
  • Additionally, the Coronavirus Business Interruption Loan Scheme, launched at Budget, will now be interest free for twelve months.
  • The standard rate in Universal credit and Tax Credits will be increased by £20 a week for one year from April 6th, meaning claimants will be up to £1040 better off.
  • Nearly £1bn of additional support for renters, through increases in the generosity of housing benefit and Universal Credit. From April, Local Housing Allowance rates will pay for at least 30% of market rents in each area.

HMRC are working “night and day” to get the unprecedented Coronavirus Job Retention Scheme up and running and we expect the first grants to be paid within weeks.

Chancellor of the Exchequer Rishi Sunak said: “We continue to do everything possible to protect the public from coronavirus. We have been working round the clock so that we can today confirm an unprecedented package of support to protect people’s jobs and wages. And we’re strengthening our safety net at the same time.

“I said we would help individuals, businesses and the most vulnerable through this outbreak and I meant it. We will do whatever it takes in the weeks and months ahead.”

Work and Pensions Secretary Therese Coffey said: “We will do whatever it takes to protect the most vulnerable and get them through these unprecedented times, and the changes we are making to Universal Credit will help millions of people in most need.

“We are standing by those who rely on the welfare safety net as we work towards turning the tide on this disease and moving on together.”

Business Secretary, Alok Sharma, said: “We have committed to doing whatever it takes to support businesses and households through these unprecedented times, and today shows just how far we are willing to go.

“This intervention is unheard of in peacetime, but it is crucial we stand behind our businesses and those that rely on them for work and income.”

All measures announced yesterday across the business and welfare package are UK-wide.

In order to help delay the spread of Coronavirus, the Government instructed entertainment and hospitality businesses including pubs, bars and restaurants to close from last night.

This follows expert advice that more needs to be done in order tackle the spread of infection – following the call to action to isolate or socially distance. The measure, set to be reviewed on a monthly basis, will not affect supermarkets or retailers that supply fuel, medicines and other vital goods, which will continue to be open as normal for the public.

The following businesses have been asked to close:

  • Food and drink venues for consumption on-site, such as restaurants and cafes.
  • Drinking establishments, including pubs, bars, nightclubs.
  • Entertainment venues, including cinemas, theatres, concert halls, and bingo halls.
  • Museums and galleries.
  • Spas, wellness centres and massage parlours.
  • Casinos and betting shops.
  • All indoor leisure and sports facilities, including gyms.

This measure will not impact the relaxation of planning rules announced earlier this week which will allow pubs and restaurants to operate as hot food takeaways during the coronavirus outbreak.

The decision on closures will be reviewed on a monthly basis, and are being implemented across the whole of the UK in agreement with the devolved administrations. If needed, the government will enforce these measures by law.

Communities Secretary Rt Hon Robert Jenrick MP said: ”We will do whatever it takes to protect people across this country as we tackle the coronavirus outbreak. 

“While people have responded well to calls for social distancing and self-isolation, we must go further if we are to be able to stop the spread of the virus and protect the most vulnerable people in our society, and our NHS.

“That is why we are now telling entertainment and hospitality premises to close temporarily, and people to only travel if absolutely essential, to help protect each other from the further spread of the virus.

“We stand behind businesses and their employees and are offering an unprecedented range of support as we tackle this huge challenge together.”

More information about the measures announced for businesses by the Chancellor can be found here.

Responding to the Chancellor’s further economic announcements, John McDonnell MP, Labour’s Shadow Chancellor, said: “The Chancellor has shifted direction but unfortunately not far enough or fast enough.

“The Government must give people the economic security to stay at home by lifting the level of Statutory Sick Pay, but it appears that the Government hasn’t done that today. Sick pay is being left at a level that the Health Secretary said he could not live on, yet this is what the self-employed are being asked to get by on.

“The Chancellor’s wage protection plan sets out no obligation for employers to keep staff on, and no commitment to full wages being paid, with the cap on incomes meaning that many people will take a significant pay cut.

“This will also take some weeks to roll out at a time when wages need to be guaranteed more urgently.

“Other benefits, including for carers, are not being lifted adequately.

“The Chancellor said he would do whatever it takes, but he can and should go further – and we will keep working constructively with Government to ensure the best possible response to the Coronavirus crisis.”

A spokesperson for the Scottish Licensed Trade Association said: “These extra unprecedented measures are very much welcomed and are a life saver for Scotland’s pubs and bars and the hospitality industry in general. 

“Without all the measures introduced to help our industry, many business would have been forced to close and staff would have lost their jobs and for many these actions would have been permanent.

“Considering our industry was on the edge of a precipice only a week or so ago, the future, for both businesses and staff is now more secure than anyone could have ever foreseen.”

The initiative has also been welcomed by the country’s biggest trade union.

Unite general secretary Len McCluskey said: “This is the package of measures that trade unions like Unite have been pressing for as the most effective way to stave off mass hardship and the conditions for a depression.  

“We recognise that these are huge decisions for any government, and especially for a Conservative government, but they have listened to the calls for action and have acted appropriately. Rishi Sunak’s wage support measures are a historic first for this country, but are bold and very much necessary.

“The key to any wage support programme is that it needs to be simple, straightforward and above all fast. This is the only way to put money into the pockets of the millions who see their livelihoods hanging by a thread.

“This will definitely be some relief amid all the fear in households across the UK this evening. Never before has the country faced a crisis of this nature. People who were only days ago in secure work are now worried sick about putting food on the table in light of the coronavirus pandemic.

“The chancellor has done the right thing and we look forward to working further with him in the coming days to get this money into the hands of those most in need.”

 

Chancellor: “Whatever it takes”

Chancellor announces additional £300 BILLION to keep UK afloat

The Chancellor Rishi Sunak has announced unprecedented support for business and workers to protect against the economic emergency caused by the coronavirus.

This includes unlimited loans and guarantees to support firms and help them manage cashflows through this period. The Chancellor will make available an initial £330 billion of guarantees – equivalent to 15% of UK GDP – and there could be more to come.

At last week’s Budget, the Chancellor provided £30 billion of support to the economy to deal with the crisis by investing in public services, increasing support for vulnerable people and providing business with tax reliefs and loans.

He said he would take further action as the situation evolved and today outlines further measures, including:

To ensure that businesses have access to the funds they need, \the UK Government will provide:

  • support for liquidity amongst large firms, with a major new scheme being launched by the Bank of England to help them bridge Coronavirus disruption to their cash flows through loans
  • increasing the amount businesses can borrow through the Coronavirus Business Interruption Loan Scheme from £1.2 million to £5 million, and ensuring businesses can access the first 6 months of that finance interest free, as Government will cover the first 6 months of interest payments
  • including new legal powers in the Covid Bill enabling us to offer whatever further financial support we think necessary to businesses

Providing £20 billion of business rates support and grant funding to help the most-affected firms manage their cashflow through this period by:

  • giving all retail, hospitality and leisure businesses in England a 100% business rates holiday for the next 12 months
  • increasing grants to small businesses eligible for Small Business Rate Relief from £3,000 to £10,000
  • providing further £25,000 grants to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value over £15,000 and below £51,000

Mortgage lenders have agreed they will support customers that are experiencing issues with their finances as a result of Covid-19, including through payment holidays of up to 3 months. This will give people the necessary time to recover and ensure they do not have to pay a penny towards their mortgage in the interim.

Confirmation that government advice to avoid pubs, clubs and theatres etc. is sufficient for businesses to claim on their insurance where they have appropriate business interruption cover for pandemics in place.

To support the food industry and help provide meals for people who need to self-isolate, the UK government will relax planning regulations to allow pubs and restaurants to start providing takeaways without a planning application.

The Chancellor of the Exchequer Rishi Sunak said: “We will do whatever it takes to protect our people and businesses from the effects of this global economic emergency brought on by the Coronavirus pandemic.

“The interventions I am setting out today will help support businesses of all sizes – so they can continue operating during these unprecedented times.”

The action announced yesterday means that over £3.5 billion in additional funding will be provided to the devolved administrations for support to businesses in Scotland, Wales and Northern Ireland.

The Chancellor will expand on his plans to keep the economy afloat later today and an announcement of support for people who live in rented accommodation is expected this week.

Labour’s John McDonnell MP, Shadow Chancellor, responding to Chancellor Rishi Sunak’s coronavirus update, said: “People are being laid off today and losing their incomes. We are disappointed that this package does not address their concerns.

“The further announcements laid out by the Chancellor lack the certainty required amidst growing public anxiety and still do not go far enough in protecting workers, renters and those who are losing their jobs, or in fully supporting businesses at the scale necessary.

“In particular, the Chancellor’s claim that new forms of employment support will be developed does not appreciate the urgency and gravity of the situation. Workers and businesses need to know now that they will be supported, not in a few days’ time.

“Labour will continue to engage with the Government to ensure we have the proper scale of interventions required to secure proper funding of public services at the time of crisis, public control and oversight of those key services, a strong safety net, and the wellbeing of all.”

Gareth Shaw, Head of Money at Which?, said: “The measures announced by the chancellor, such as a three-month mortgage holiday scheme, are an important first step to helping millions of consumers who may face financial hardship during the coronavirus crisis.

“The government must move swiftly to ensure those in need of assistance get clear information about how these schemes will work in practice – and that the process for doing so is straightforward, ensuring consumers can easily access the support they need in the challenging months ahead.”

Responding to chancellor Rishi Sunak’s package of support for businesses and the prime minister’s pledge to do `whatever it takes’ to support people and jobs through the corona virus crisis, the head of the UK’s leading union, Unite, has said that his union stands ready to play their part throughout this time of crisis.

Len McCluskey, Unite’s general secretary said: “It is abundantly clear that we need a package of measures equal to the public health and economic emergencies now upon us.

“Urgent and considerable action is needed by government to avert personal and industrial catastrophe.

“Unite is pleased to have heard the prime minister and chancellor say very clearly that they `will do whatever it takes’ to protect public health and the economy’s health.  We will hold them to that.

“However, we remain extremely concerned that workers’ and individuals’ own capacity to act on the public health advice will remain seriously compromised because the direct economic support has not yet been provided by government. This must change and urgently.  Providing wage support and covering rents must be a priority.

“It is welcome that those hit by the virus will have a three month mortgage holiday should they need it, but what about the vast majority of people who rent? They need to know that they can put food on the table and keep a roof over their families’ heads. Only then will they feel able to play their part in tackling this public health emergency.

“We urgently need for the government to introduce now the sort of measures that we have seen implemented in our competitor nations, including paying workers 75 per cent plus of their salary while they are forced to be at home as has been introduced in Denmark and Holland.  UK workers deserve the same efforts and assistance.”

 

Join the Clubs!

Edinburgh businesses urged to help each other improve productivity

The Scottish Government and one of Scotland’s leading independent economic development networks have urged Edinburgh SMEs to register for new resources and events to help them drive innovation, productivity, sustainable development and economic growth. Continue reading Join the Clubs!

A huge day for democracy as Johnson ups the ante

  • Tory MPs threatened with deselection if they oppose the government
  • October general election looking increasingly likely

Prime Minister Boris Johnson faces a showdown in Westminster today after officials warned he would call for a snap general election on 14 October if MPs succeed in seizing control of Commons business. Continue reading A huge day for democracy as Johnson ups the ante

Scotland’s revenues grow by £3 billion

DEFECIT CONTINUES TO FALL 

Scotland’s notional deficit is falling faster than the UK’s, with onshore revenues increasing by 5.1% to reach £61.3 billion in 2018-19 as a result of continued economic growth.

According to the Government Expenditure and Revenue Scotland (GERS) figures published yesterday, Scotland benefitted from a £3 billion increase in onshore revenues in the last year – the fastest growth since 2010-11 as the overall notional deficit fell by £1.1 billion to 7.0% of GDP, down from 8%, in 2018-19.

The reduction in the notional deficit is the result of revenues growing at a faster rate than expenditure.

Commenting on the latest figures during a visit to manufacturing company Armadilla Ltd in Bonnyrigg, Finance Secretary Derek Mackay said: “With record tax revenues, strong economic growth and near record low unemployment, Scotland’s economy and public finances are strong. Today’s figures show overall revenue in Scotland reached £62.7 billion – exceeding £60 billion for the first time – reflecting the strength of our economy.

“Our notional deficit has fallen while public spending has increased thanks to our efforts to grow the onshore economy and the strong performance of taxes in Scotland. The Scottish Government’s choices on taxation are helping to create a more progressive tax system.

“This strong performance from Scotland’s economy is at risk as a result of the UK Government’s EU exit plans, and in particular a ‘no deal’ Brexit, which poses a severe threat to jobs, investment and living standards

“A ‘no deal’ Brexit could reduce revenues in Scotland by around £2.5 billion a year, holding Scotland back and demonstrating why people in Scotland increasingly recognise the importance of making our own decisions.

“These figures reflect Scotland’s position as part of the UK. The Scottish Government believes we could unlock our full potential with independence, allowing us to take the best decisions for Scotland.

“As we have always said, Scotland has a strong, and growing, economy and our future will be far brighter as an independent member of the EU.”

Westminster puts a different slant on the latest figures, of course. Commenting on the Scottish Government’s GERS figures for 2018-19, Scottish Secretary Alister Jack said: “Today’s GERS figures show clearly how Scotland benefits from being part of a strong UK with every man, woman and child in Scotland receiving a ‘Union dividend’ of nearly £2,000 a year.

“These Scottish Government figures also show there would be a £12.6 billion black hole at the centre of an independent Scotland’s finances. Real questions need to be asked about the First Minister’s stewardship of the country’s economy.

“With Scotland’s deficit now more than six times greater than the UK average, the Scottish Government needs to take action.

“Scotland remains the highest taxed part of the UK. This is harming our economy and should be a huge concern to us all.

“The UK Government is investing in Scotland to deliver jobs, opportunities and sustainable growth, including £1.4 billion for city and growth deals. We are working hard to support businesses and bring further opportunities as we leave the EU on 31 October.”

The UK Government notes:

  1. Using the Scottish Government’s own data, public spending in Scotland was nearly £1,661 per head higher than that of the UK average. In other words, in 2018-19 it was 13.6% higher than the UK average. Over the last five years, this gap has been on an upward trend from £1,182 or 10.2% in 2014-15 and £1,661 or 13.6% in the latest full financial year.
  2. Scotland’s tax contributions, at £11,531, continue to be around £307 per head less than the UK average, at £11,838.
  3. Scotland’s deficit [or borrowing] was nearly £1,968 per person larger than the UK average in 2018-19.
  4. Scotland contributed 8.0% of UK tax and received 9.3% of UK spending in 2018-19 (Scotland’s population share was 8.2% in 2018-19), demonstrating how Scotland receives secure and stable levels of spending irrespective of the volatile tax revenues from the North Sea.
  5. Whilst Scotland’s share of UK total revenue has marginally increased over the last year, it is generally on a downward trend. Since its peak at 9.7% in 2008-09, Scotland’s contribution to UK revenues has been on a downward trend in subsequent years and is currently at 8.0% of the UK total. This is marginally up from 7.9% the year before.
  6. Total North Sea revenues fell slightly from £1.30 billion in 2017-18 to £1.24 billion in 2018/19. This is up from a low of minus £85 million in 2015-16 and down from a peak in 2008-09 of £10.6 billion.
  7. Scotland’s net fiscal balance as a share of GDP was –7.0%, compared to –1.1% for the UK overall. This decreased from –8.1% in 2017-18, compared to the UK overall, which came down from –2.0%. In absolute terms, Scotland’s deficit was £12.6 billion in 2018-19, down from £13.8 billion in 2017-18 (incl. North Sea revenues).
  8. While Scotland’s overall fiscal position improved in 2018-19, Scotland’s deficit as a share of its economy is over 6 times higher than that of the UK.

You pays your money, you takes your choice. Make your own mind up:

The full statistical publication is available at http://www.gov.scot/gers