Costs clouded

The SNP gave detailed information on how well off Scotland would be using UK government figures if Scotland were independent.

Scottish Secretary Michael Moore then counters this using similar figures but specifically covering a period during which the whole of the UK was in significant deficit, saying that Scotland would have a deficit of £41 billion.

Your article (25 October) also states that without any share of oil and gas revenues, it would be much much worse.

The problem with the coverage is twofold.

First, the vast bulk of North Sea oil revenue comes from Scottish waters so any mention of how well off Scotland would be without it is like discussing how wealthy Saudi Arabia would be without oil revenue or how rich Japan would be without counting car sales – pointless.

Second, why have a massive front-page headline, a two-page spread and a cartoon, which all suggest the figures the SNP gave are wrong?

The figures produced by Mr Moore actually show our share of the deficit is much smaller per capita than the UK as a whole so the article and coverage should have been further support of the SNP case rather than countering it.

Jonathan Gordon

Gylemuir Road

Edinburgh

Professor John McLaren (Analysis 25 October) points out the potentially volatile nature of future Scottish Government revenues under any system that devolves North Sea oil taxes to Scotland.

However, he fails to include the effect of declining oil volumes on this revenue base.

The announcement of the further exploitation of the Clair field is to be welcomed but the additional volume from this field (around 60,000 net barrels per day) once on-stream in 2016 will not change the overall shape of the decline in North Sea oil production, as production from other fields falls away at a faster rate.

The comments of Bob Dudley, the chief executive of BP, that we could still produce some 250,000 barrels of oil a day from the North Sea in 2030, has been seized upon by some SNP commentators as an indication of high future oil volumes.

However, current production is some 1.2 million barrels of oil per day (less than half of the peak production levels of 1999).

On Mr Dudley’s estimate that volume will fall by half this decade and then half again between 2020 and 2030.

Therefore the short to medium-term viability of Scotland’s economy under the SNP’s proposals is based on a bet not just that the oil price will remain at its current historically high level, but rather that real-term oil prices will double this decade and then double again the next.

In the longer term, Clair and other fields may well still produce some oil into the 2040s.

However, the volumes will only be a small fraction of current production levels and insufficient to support Scotland’s current high level of government spending, regardless of the price of oil.

Even under the SNP’s most ambitious timetable, major fiscal change will not occur until towards the end of this decade.

Therefore, at best, even if the long-shot bet on oil prices pays off, and ignoring other effects such as the need to pay down very high levels of national debt, Scotland would be able to support about a further decade of current spending before either having to slash government programmes or see an ever widening hole emerge in its public finances.

Peter Muirhead

Duncrag

Kilmacolm