Scots economy bounces back after North Sea recovery

Scotland's economy has surged to its highest growth in four years after a recovery in the North Sea oil and gas industry, official figures have shown.

By The Newsroom Wednesday, 2nd May 2018, 9:06 pm Updated Wednesday, 2nd May 2018, 9:10 pm

The North Oil and gas industry bounced back last year

More than £1 billion in North Sea Oil and Gas revenues were collected in 2017 after revenues turned negative in 2016 as tax breaks outweighed receipts.

The figures differ from the official GDP statistics published last month which showed 0.3 per cent growth in Scotland, and 1.1 per cent over the year, because the latter do not include the offshore figures and are measured in real terms.

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Economy Secretary, Keith Brown said: “It is hugely encouraging to see that GDP grew across 2017, ending the year over 1 per cent higher than the previous year.”

The North Oil and gas industry bounced back last year

But growth over the year remains below the UK rate which was 3.8 per cent, according to the latest Scottish National Accounts.

And there is little prospect of Scotland’s GDP per capita outstripping the rest of the UK in the near future as North Sea output is only a third of the level seen in 1999. The £1 billion raised in revenues compares with £7 billion a year when the North Sea was booming. Read more: North Sea oil and gas outlook remains uncertainEconomist John McLaren of the Scottish Trends website said: “GDP growth has been boosted by a slight recovery in the North Sea contribution, such that overall growth is the fastest seen since 2013.

“However, for the fourth year in a row, growth in Scottish GDP per capita, trails that of the UK. Going back to 2009, the historically low UK annual growth figure of 3 per cent has still been double that seen in Scotland (1.5 per cent).”

Disposable household incomes for Scots families are also stagnating below inflation after a rise of just 1.7 per cent over the year in current prices with a savings ratio was 6.8 per cent in the latest quarter, compared to 7.6 per cent during the past year.

Tory Finance spokesman Murdo Fraser said: “These statistics simply highlight the SNP’s total disregard for the financial pressures of working families.

“Despite sluggish economic growth and repeated warnings from businesses across Scotland, the SNP still raised taxes on hard working Scottish families.

“While Scottish families are paying higher taxes, waiting times are getting longer, police numbers are falling and schools are short of teachers.

“Once again this shows that under the SNP, taxpayers pay more and get less.”

Onshore GDP is estimated at £152.1 billion, or £28,046 per person - rising to £165.4 billion, or £30,482 a head, when offshore activity is included.