Nicola Sturgeon is under pressure following lower growth figures than rest of UK
While the rest of the UK has faced years of belt-tightening research carried out by the TaxPayers’ Alliance reveals that the Scottish deficit, at 9.5 per cent of gross domestic product (GDP), is twice that of the rest of the nation.
The Taxpayers’ Alliance said Scotland’s overspending is such a chronic problem that the issue needs tackling irrespective of the independence question, as the country ran up a fiscal deficit of £14.8bn in 2015-16.
And the pressure group said an independent Scotland would have to carry out drastic measures to balance its books including cutting all spending on police, transport, and agriculture, increase basic rate income tax to 39 per cent and double VAT to 40 per cent.
In addition, health spending would also have to be cut by 82 per cent.
Scotland offers its students free university places, free personal care for needy over 65s and free prescriptions.
By contrast, students in England have to pay tuition fees, elderly care is means-tested and prescriptions cost £8.40
John O’Connell, chief executive of the TaxPayers’ Alliance, said, “The Scottish government has been relying on an unsustainable situation, depending on English subsidies to plug an ever-increasing deficit.
“It is crucial that spending is reined in so that taxpayers across the country – current and future – aren’t saddled with high tax bills and crippling debts.”
The group said Scotland’s public spending remains far in excess of England’s with spending per head being 20 per cent higher, heavily subsidised by taxpayers elsewhere.
The report also highlighted that Scotland has run a deficit every year since devolution in 1999 despite sometimes record oil prices.
To become an EU member, an independent Scotland would be forced to tackle its deficit as any deficit over 3 per cent of GDP is deemed excessive by the EU
Mr O’Connell added: Scottish taxpayers face a huge deficit that must be tackled.
“Politicians in Holyrood must do the responsible thing and commit to getting the public finances under control.”
We have to recognise that economic growth of 0.4 per cent simply isn’t good enough
Now the SNP has been urged to tackle its “decade-long failure of Scotland’s economy” with opponents rounding on Scotland’s First Minister Nicola Sturgeon ahead of this week’s SNP conference. after it emerged that the country’s gross domestic product grew by just 0.4 per cent between April and June – compared to 0.7 per cent recorded UK-wide.
Scottish Government figures published on Wednesday showed that the 0.4 per cent increase in Scotland’s onshore economy – not including North Sea oil and gas extraction – was driven by the dominant services sector, which accounts for three quarters of the country’s economy.
It expanded by 0.5 per cent quarter on quarter, while production improved by 0.3 per cent.
However, a contraction in the construction sector deepened with output falling 1.9 per cent in the second quarter, following a 1.5 per cent slump in the first three months of the year.
Scottish Conservative economy spokesman Dean Lockhart welcomed the growth but added: “We have to recognise that economic growth of 0.4 per cent simply isn’t good enough when you compare that to the rest of the UK.
Figures show the Scottish deficit is the highest in the European Union and twice that of the UK
“The Scottish economy continues to massively under-perform in relation to the rest of Britain’s, and that’s entirely on the SNP’s shoulders.”
He added: “As the SNP prepares for its conference, instead of stoking uncertainty with more independence threats, it should be thinking about how to address its decade-long failure of Scotland’s economy.”
Liz Cameron, chief executive of Scottish Chambers of Commerce, said: “These figures underline the fact that Scotland’s economic performance has been significantly lower than that of the UK as a whole for a full year and, whilst we are now seeing welcome growth in our production and service sectors, construction has been contracting at a significant rate for two consecutive quarters.”
Colin Borland, of the Federation of Small Businesses, added: “Scotland needs to strive for growth levels at least as good as the UK average.
“We look forward to the SNP talking business when they meet in Glasgow this week.”
Scottish Conservative economy spokesman Dean Lockhart says 0.4 growth ‘isn’t good enough’
The criticism came as research from the TaxPayers Alliance revealed the Scottish deficit – £14.8bn in 2015-16 – equates to 9.5 per cent of GDP.
As the EU deems any deficit over three per cent of GDP “excessive”, an independent Scotland would have to make massive cuts to meet stringent terms.
Economy Secretary Keith Brown blamed the poor growth in GDP on “challenging circumstances” in the run up to the EU referendum.