Government finances and spending

Today, the Scottish Government published the latest version of its annual Government Expenditure and Revenues Scotland (GERS) publication. For the first time in 5 years GERS suggests that Scotland's net fiscal balance, or budget deficit, was worse than that of the UK as a whole even when allocating North Sea revenues to Scotland on an illustrative geographic basis. Until now these revenues have been enough to more than outweigh the higher public spending per head in Scotland than in the rest of the UK. But not in 2012–13.

This presentation was given at Central European University, Budapest, on 7th March 2014.

The latest public finance forecasts published by the Office for Budget Responsibility (OBR) in December presented a better outlook for the UK than had been suggested by their March forecast. This is good news for the UK and Scotland in the short-term but much of the improved short-term outlook comes at the expense of reduced scope for economic recovery after 2018–19. Also the one area of greater weakness in the OBR’s latest forecast – revenues from oil and gas production – has substantially more adverse consequences for Scotland’s fiscal position than for the UK as a whole. In short, the new forecasts do little to diminish the tough choices that will face Scotland (and, to a lesser extent, the UK) if it is to achieve long-run fiscal sustainability.

The deep cuts to the public sectors mean that unprotected departments will have budgets slashed.

Ed Balls and Ed Milliband have cited recent HMRC statistics which show those paying the 50% income tax rate are estimated to have paid some £10 billion more in tax over the three years 2010-11 to 2012-13 than was projected to be the case back in 2012 when HMRC analysed how much the tax was raising. Is that an indication that the 50p rate was more successful in raising revenue than HMRC concluded in their analysis?

This presentation was delivered at the conference 'Intergenerational Mobility' at the Centre for Economic Performance on 23 January 2014

There needs to be serious political debate about how much of a squeeze, the balance between taxes and spending, and the choices within spending should be over the next 18 months. None of the choices will be easy.

James Browne gave his analysis of the Autumn Statement at an IFS briefing on 6th December 2013

Two short analysis pieces on tax and welfare. This analysis is published by the BBC, who asked several experts to give a viewpoint on aspects of the Scottish government White Paper 'Scotland's Future'.

This paper was given at the IFS event 'The fiscal implications of an independent Scotland' on 18 November 2013

This paper was given at the IFS event 'The fiscal implications of an independent Scotland' on 18 November 2013