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Scottish independence: Osborne paints grim picture

Alex Salmond, at a discussion yesterday, with his deputy Nicola Sturgeon. Picture: Phil Wilkinson

Alex Salmond, at a discussion yesterday, with his deputy Nicola Sturgeon. Picture: Phil Wilkinson

  • by DAVID MADDOX AND EDDIE BARNES
 

ALEX Salmond will open a year-long parliamentary battle over the Scottish independence referendum today, as MSPs return from their summer break.

The First Minister will set out plans for 13 bills, including plans to legalise gay marriage, as he unveils his legislative programme for the coming year.

But in a statement released last night reflecting the central focus of the parliament’s agenda, he turned to the coming referendum, insisting that the record thus far of the Scottish Parliament “provided ample evidence” that Scots should now “chart our own course”.

Mr Salmond will address MSPs today as Chancellor George Osborne visits Aberdeen, where he is expected to make the case for the UK, insisting that the oil industry has benefited from being part of a single UK economy.

Mr Osborne will point to the “certainty” provided by the UK over the tax breaks oil firms can expect to receive over the coming years.

But that prompted an angry statement last night from Scottish finance secretary John Swinney, who accused Mr Osborne of “rank hypocrisy”.

In the foreword to the Scottish Government’s legislative programme, Mr Salmond says: “The case for independence is based on a very simple argument. Decisions about Scotland should be taken by the people who care most about Scotland: those who live and work here.

“This is both democratically right and the best way to improve our country. After all, no one has a greater incentive to make the right decisions for Scotland than us, the people who will be directly affected.

“The record of the Scottish Parliament provides ample evidence of the truth of this argument: taking decisions in Scotland works. Individuals, families and communities have gained from the decision-making powers of devolution. But equally, the record of successive Westminster governments – often, like now, governments that have been rejected by Scottish voters – demonstrates the costs to people in Scotland when decisions are still taken in Westminster.

“The eyes of the world will be on Scotland in 2014, as we celebrate the world’s sportspeople in the Commonwealth Games and Ryder Cup, and welcome the world back to Scotland for Homecoming. They will see a country with a growing confidence and sense of itself, and a parliament which continues to demonstrate its purpose and connectedness to the Scottish people and their values.”

Mr Salmond will launch the programme as the Westminster government makes a renewed push to defend the union.

Launching the fifth UK government analysis paper on independence, Mr Osborne will claim that the oil and gas industry is better off and more secure if Scotland remains in the UK.

Government sources have already let it be known that paper on macroeconomics will state that Scots would earn more if they stayed within the UK, but it will also argue that the oil and gas sector could be destabilised through independence.

In his keynote speech in Aberdeen to Oil and Gas UK, Mr Osborne will claim the UK has the “broad shoulders” to maximise volume and value from North Sea oil and gas reserves. He will say Treasury analysis will show an independent Scotland would need to rely on a narrower and more volatile tax base to fund spending on public services.

He will point out that since the beginning of devolution, oil revenues have fluctuated from less than £2.6 billion to almost £12.9bn, while forecasts of oil revenues by the independent Office of Budget Responsibility show Scotland would face a £4bn black hole in its budget by 2016-17.

He will argue that this black hole is equal to a third of Scotland’s health spending or half of its education spending.

He will also argue Scots would have to pay £3,800 a head to pay for the £20bn the UK government is committed to for decommissioning North Sea rigs, while if the costs are shared by the UK population it equates to £300 a head.

Mr Osborne will warn that an independent Scotland would incur more costs and uncertainty for the industry because it would need to have a completely separate tax system to the rest of the UK. He will say the UK government’s case is that Scotland and the UK are better together – maximising benefits and pooling risks.

Mr Osborne will also unveil the final decommissioning deed, a contract that gives companies certainty over the level of tax relief that they will receive for decommissioning opening the way to tens of billions of pounds of investment. It is expected the first deeds will be signed in the coming weeks.

The Chancellor is expected to highlight projects he says have benefited from the Westminster government’s support – £4.3bn invested by Statoil in Mariner, creating 700 jobs; a £1.4bn investment by GDF Suez in the Cygnus gas field, creating 1,200 jobs; and £170 million from EnQuest, the UK’s largest independent oil producer, in its Thistle field, safeguarding 500 jobs and creating 1,000 more.

But Mr Swinney said: “It was Mr Osborne’s decision in 2011 to place a hugely damaging £2bn tax raid on oil companies that put investment on hold.

“His credibility in the North- east is in tatters.”

He went on: “Westminster’s claims do not stand up to scrutiny. Norway, with a population similar to Scotland not only manages its economy perfectly well but has managed to build up a £470bn oil fund, which Westminster sacrificed. The problem for the No campaign is they have to explain why an independent Scotland would be uniquely incapable of doing something similar.”

He also said Scotland had paid more in taxes per person in each of the past 30 years than the UK as a whole, and even excluding North Sea oil, Scotland’s economic performance was worth 99 per cent of the UK’s.

He added: “North Sea oil is a bonus, not the basis for Scotland’s economy, and with up to 24 billion barrels of oil left worth an estimated £1.5 trillion, it will continue to contribute to the wealth of Scotland for a long time to come.”

Housebuilders fear dampening effect of Scots independence

Scottish independence could hit the number of new homes being built, a survey of industry leaders has found.

Property consultancy firm Jones Lang LaSalle spoke to 12 private housebuilders, responsible for 80 per cent of building activity in Scotland.

The survey found there was a “fear of the unknown” over independence, although the housing market was getting back on its feet again.

Housebuilders were “largely downbeat” on the likely impact of independence, the survey says. “Developers expressed various concerns not only about a post-independent nation but also about the run up and immediate aftermath of the vote,” the report adds.

Only one of the 12 builders who responded thought that independence would deliver more housing.

“Over half of respondents thought there would be slightly or considerably less housing development as a direct result of Scottish independence,” the survey added.

But a Scottish Government spokeswoman said: “There is no evidence to substantiate such claims – independence will bring substantial economic benefits and allow us to tailor policies which best suit every sector of the Scottish economy, including the housing sector.”

The industry expects to be building more than 1,000 units a year by 2016, with four planning more than 500 units annually. But they were less confidence about price rises.

Across the whole of Scotland about 13,500 new homes were started in 2012, a marginal increase from the 13,300 units in 2011, and the first annual rise since 2006.

Labour MSP James Kelly said: “The survey shows that Scotland being on pause while awaiting the referendum is having a direct impact on the confidence of businesses who are wishing to invest.

“While the fundamental questions of what a separate Scotland would look like remain unanswered by the SNP, the business community are making their own mind up about what breaking up Britain would do to jobs and investment in Scotland.”

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