Scotland politics

Nicola Sturgeon acknowledges Scotland's economy faces challenges

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Media captionNicola Sturgeon was interviewed by Andrew Neil

Scotland's First Minister Nicola Sturgeon said she did not deny the country faced economic challenges.

She was speaking to the BBC's Andrew Neil days after Scotland's deficit was shown to be almost 10% of its output - nearly double the UK as a whole.

Ms Sturgeon said that despite difficulties particularly relating to North Sea oil revenues, Scotland's economy was "fundamentally strong".

The SNP leader has been attending her party's two-day conference in Glasgow.

In an interview on the BBC's Sunday Politics, Ms Sturgeon was asked what she would do to reduce Scotland's deficit.

She said: "In the year that we had figures published for just this past week, we have had a very challenging and difficult set of figures. I am not denying that for a second."

'Economy fundamentally strong'

However, Ms Sturgeon believed it was important not to focus on just one year's figures.

She said: "Over the past 10 years our fiscal position has been broadly similar to the UK and in some of those years it has been significantly better."

Ms Sturgeon acknowledged particular difficulties in the North Sea oil and gas sector.

"Those are difficult principally for the people who work in the North Sea and for the north east of Scotland, but it doesn't take away from the fact that the economy of Scotland is fundamentally strong," she added.

The MSP went on to say that she did not oppose getting the deficit down, but she opposed the UK government approach for "both the speed at which it is happening and the way it is happening".

Ms Sturgeon said she wanted to look to the future and focus on "the real strengths of the Scottish economy".

Projections for onshore revenues - excluding offshore gas and oil - are expected to grow by £14bn in the next five years, the politician pointed out.

What are the figures per head?

The annual GERS figures, which are produced by Scottish government economists, independently of ministers, came out four days ago, also showed;

  • income from tax was £10,000 per person - that included a geographic share of oil revenue from around the Scottish coast. It represented 8.2% of revenue - slightly below the UK figure
  • and expenditure was £12,800 per person, or 9.3%. That was £1,400 per person more than the UK average.

The GERS figures are widely used to inform the debate about Scotland's potential for independence or for the full range of tax-raising powers.

They looked much more positive when oil and gas tax revenue was in the billions.

But with the fall in the price of oil and gas, as well as high levels of investment, producer profits have plummeted, and taxes with them.

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