The UK has been one of the poorest performing economies since the financial crisis. The economic shock of the financial crisis was greater than most other advanced economies and the UK took longer to recover and even before Covid-19 was considerably smaller than it would have been had it matched the recovery achieved by others.
Translating the UK underperformance to the Scottish economy, matching the 2007 to 2019 growth performance of the SAEs, would have added an additional £13 billion to the Scottish economy. In 2019 Scottish GDP (excluding North Sea oil and gas) would have been £181 billion instead of £168 billion[1]. In GDP per capita terms, this translates to £2,400.
This also matters for public services. Given that taxes raised in Scotland in 2019-20 were equivalent to 38.7% of GDP, the additional GDP would also have generated additional taxes, an additional £5 billion, increasing the tax revenues from £65 billion to £70 billion. This is very significant in the context of Scotland’s reported Current Budget Deficit of £11.9 billion in that year, demonstrating that the way to improve Scotland’s public finances is to boost economic growth, as the other SAEs have done.