Gears: SNP finance minister Kate Forbes says record £36bn deficit ‘not an obstacle’ to independence

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Scotland’s finance minister claimed that the country’s record deficit was “not an obstacle” to defending the cause of independence.

Kate Forbes also said the pro-independence argument had been “reinforced” by the pandemic.

Figures released this morning show that the country’s theoretical deficit – the difference between spending and increased taxes – has risen from around £15 billion to more than £36 billion due to increased spending to tackle the coronavirus.

The figure comes to 22.4% of GDP, with per capita public spending of £1,828 above the UK average.

Union supporters believe that the huge financial gap is engulfing the issue of Scotland’s departure from the United Kingdom, while supporters of independence claim it is a reflection of Holyrood’s limited powers.

At a press conference, Forbes said of the massive deficit: “It was inevitable given the scale of the policy response that all countries would emerge from the pandemic with high fiscal deficits.

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“The UK now has the largest deficit in Europe, and every advanced economy is now running a deficit.”

“All of these countries will of course need to manage this deficit, and Scotland could do too, if we get the leverage we’ve been asking for so long,” she added.

Forbes also said the GERS numbers reflected “the current constitutional situation” and said much of the extra spending came from British borrowing.

When asked if she thinks the argument for independence has not been affected by the pandemic and the disability data, she replied:

“I think the arguments for independence are strengthened by the pandemic.”

She continued: “The UK’s deficit now, as a result of an unprecedented shock, is around 14% – the highest in Europe. The fundamental difference is that we are all assuming that the UK government is going to turn this situation down because of the levers it controls, the economy is partly growing, and its own running. Finance in part in a prudent and sustainable manner.

“This is what the countries of the world do.

“So, yes, there is a strong case for us to grow our economy, and my position is that I can only go so far without using the full levers that are under our control.”

On whether the £36 billion deficit is an obstacle to the arguments for independence, she replied:

“It is not an obstacle to defending the cause of independence because worldwide deficits have risen dramatically and having the highest deficit in Europe does not appear to be an obstacle to the independence of the UK government. The same argument would apply to us.”

She also reiterated the SNP government’s support for a second referendum once the pandemic passed and assured that the government’s economic strategy would be updated:

“The Chief Minister is right that the impact of COVID is so great that we will have to update, and certainly put us at the beginning, when it comes to managing the impact on our economy.”

Reckless beyond imagination

Scottish Labor Deputy Leader Jackie Bailey said: “GERS statistics today clearly show how the people of Scotland benefit financially from being part of the UK.

“Nothing illustrates the importance of this relationship more than the response to the pandemic, as this additional funding has been key to protecting the NHS and other public services that have kept Scotland’s people safe.

“The extra £1,828 spent per capita in Scotland compared to the rest of the UK goes to upkeep of schools, transport and the NHS on which we all depend.

“The continuing economic fallout from the pandemic and the unanswered question of decolonization remain the biggest long-term economic threats to Scotland’s prosperity.

“Which is why it is reckless beyond imagination to pursue a divisive and economically disastrous referendum during the recovery period.

“No credible politician can look at these numbers and think that Scotland will be weaker than anything outside the union.”

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