For those against Scottish independence, the drop in the oil barrel price since the referendum, now standing at around $45, is seen as proof that they were right, strengthening the case for the Union. When the oil barrel price is high, this is seen as positive for the case for independence, as it clearly boosts revenues.
What is often neglected in this whole debate is that the current state of Scotland’s finances is based on a situation where there is limited access to any of the fiscal levers open to other independent nations.
We cannot cut or increase corporation tax, we have limited control over income tax and no control over excise duties, National Insurance contributions or capital gains tax, to name but a few. Oil and gas revenues are therefore seen through the prism of plugging a budget deficit, rather than looking at the cause of the deficit itself.
The clear issue here is not that of oil and gas revenues, but whether the fundamentals are in place to create a flourishing economy if Scotland was to have control of the full range of fiscal levers open to other countries, the vast majority of whom don’t have access to the “black gold” of North Sea oil.
Oil and gas is a fantastic source of revenue, but it should be looked at as the “icing on the cake”, and in our continual focus on this, we are guilty of clouding the independence debate.
James Duncan (Letters, 29 August) adopts the usual nationalist counterfactual arguments to try to explain away why the continued low price of oil would not be a disaster for an independent Scotland.
The North Sea oil fields are in UK waters. As the UK has around 13 times the population of Norway and a much larger infrastructure to maintain, revenues were more likely to be spent than saved (whether spent wisely is another matter). The Scottish Government/SNP white paper on independence promised an oil fund but made no suggestion of taking any part of oil production back into state ownership. By promising a cut in corporation tax, there was a logical anomaly in how an oil fund could be achieved when revenues from the private sector were going to be reduced. But then the SNP have always put more effort into establishing grievances than sound economic policy.
DR S J CLARK