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  1. ITV Report

Oil and gas prices help Scottish deficit fall to £13.3bn

Sturgeon: Scottish economy is growing fast Credit: PA

Scotland's deficit fell to £13.3 billion for 2016/17 amid an increase in oil and gas revenues, according to new figures.

The Government Expenditure and Revenue Scotland (GERS) statistics show a deficit of £13.3 billion when a geographic share of North Sea revenues is allocated to Scotland.

That amounts to 8.3 per cent of Scottish GDP, compared with the overall UK deficit of £46.2 billion - 2.4m per cent of UK GDP.

North Sea revenue rose from £56 million in 2015/16 to £208 million, reflecting an increase in total UK oil and gas revenues.

First Minister Nicola Sturgeon said the Scottish economy 'remained strong'.

Scotland's economy remains strong. In the last quarter, our economy grew nearly four times faster than the UK and the number of people in employment is at a record high. These figures reflect Scotland's finances under current constitutional arrangements. However, they show that our investment in key industries, such as the life-science sector, is providing a real boost to our onshore economy. The lower oil price had an impact on North Sea revenues and the wider economy last year. However, it is encouraging to see an improvement in the overall fiscal balance and that onshore revenues grew at their fastest rate in nearly twenty years.

However, our long-term economic success is now threatened by Brexit, which risks reducing household incomes, employment and funding for public services. That is why we continue to press for the Scottish Government to have a direct role in Brexit negotiations.

– First Minister Nicola Sturgeon

But Scottish Secretary David Mundell said the figures were 'a cause for concern'.

They also highlight the value of pooling and sharing resources around the UK. Being part of a strong UK has protected our living standards, and that's one reason the people of Scotland clearly rejected Nicola Sturgeon's plan for a second independence referendum at the election. Scotland's deficit is falling at a slower rate than the UK as a whole and economic growth is lagging behind. It is vital we grow the economy and we want to work with the Scottish Government to achieve that.

– Scottish Secretary David Mundell

Read Peter MacMahon's Blog on this story: Scotland's £13 billion deficit: facts, chiels, and GERS