News story

Welfare spending in Scotland three times greater than oil revenues in 2010

Scotland Office analysis shows there was a record gap between the UK Government's welfare spend in Scotland and oil and gas revenues in 2010

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

In 2010 there was record £8.5 billion gap between UK Government spending on welfare and pensions in Scotland and all the revenue raised from North Sea oil and gas.

Scottish Secretary Michael Moore said it was a great strength of the UK that we provided the same level of help to those who needed it regardless of which part of the UK they live in. He also said it highlighted the fact that the Scottish Government’s numbers “don’t stack up” when they propose that oil and gas revenues will pay for the costs of separating Scotland from the rest of the UK.

Figures from the Scottish Government show that identifiable spending on welfare and pensions by the UK Government in Scotland was just over £15bn in 2010 while oil revenues totalled £6.4bn. In fact, the figures show that pensions spending alone in Scotland in 2010 of £7.2bn could not be covered by oil and gas revenue.

Scotland Office analysis of the spending and revenue figures from the Scottish Government show that, since records began in 2002, defined UK spending on pensions and welfare in Scotland exceeds the total revenue from oil and gas over that period by more than £38bn.

The UK Government has spent £98.1bn on pensions and welfare since 2002 while the total revenue from oil and gas was £59.7bn. The analysis shows that in no year has oil revenue covered the welfare bill - even in 2009 when North Sea revenue reached almost £13bn.

The Scottish Secretary Michael Moore said:

“Oil and gas is a vital sector for the Scottish economy but these numbers put things in some perspective.

“Pensions and welfare spending is crucially important to people in Scotland and the UK.

“The great strength for us within the UK is that we get a common level of provision for welfare and pensions. It doesn’t matter whether you’re in Cornwall or the far North of Scotland, you are given the same support.

“The scale of the UK means we can better withstand economic shocks in certain parts of the country and look after those who need help.

“If revenues from oil and gas revenue decline significantly - as they can - we have got the bigger resources of the UK to keep welfare and pensions payments going.

“This highlights yet again the fundamental questions the Scottish Government must answer about how you deal with the costs of separating Scotland from the rest of the UK. Oil and gas revenues are offered up as the solution but the number don’t stack up.”

Table (£millions)

2002-03                        9,992                       5,097

2003-04                      10,975                      4,284

2004-05                      11,456                      5,183

2005-06                      11,908                      9,384

2006-07                      12,199                      8,924

2007-08                      12,701                      7,464

2008-09                      13,842                    12,925

2009-10                      15,039                     6,491


Published 13 November 2011