The SNP’s standard response to the request to explain how it would have balanced its post-referendum budget projections now that oil revenues have collapsed is the rather hackneyed sidestep that Westminster governments should have built up an oil fund.
I am not suggesting that such a fund might not have been prudent but the income put aside would have reduced the amount available to spend during these years and Scotland would have had to bear its share.
Thus, perhaps as an alternative the SNP could identify what expenditure, at least in the past seven years under its control, would have been reduced in order to balance the books, perhaps prescription charges, free care for the elderly, the NHS etc?
However, I am sure that request, like all others, would simply be sidestepped but looking forward there is one issue they cannot sidestep.
The SNP (in particular John Swinney) are now stating they want all fiscal levers devolved. This is in effect Home Rule and Alex Salmond says there is overwhelming evidence of support for it in Scotland.
That appears to be one of the platforms on which the SNP will contest the general election. However, if successful, Scotland would then be in control of both income and expenditure, excluding items like defence.
If the Scottish people are to understand the impact when deciding how to vote, it is incumbent on the SNP to produce financial projections to show how the budget under Home Rule would be balanced in the next few year and that would have to include realistic estimates of the income from oil.
Without such projections how can anyone in Scotland understand the implications that a vote for the SNP in May would entail?
Braid Farm Road
Fergus Ewing, the Holyrood energy minister, was on television on Friday lunchtime, prevaricating his way through the whole interview, on the effects of the oil price fall. As a Scotsman editorial said the other day, the SNP is going to have to come to terms with this; it seems psychologically unable to come to face the facts.
Bo’ness, West Lothian
Paul de Leeuw (Analysis, 16 January) seemingly has faith in a classical supply and demand model of oil economics. Mistakenly, he concentrates on the supply side and how North Sea oil companies can reduce costs.
Also, recommending a more competitive tax regime is yet another strategy of supply-side economics.
What about the demand side of oil economics? Didn’t Paul Samuelson say “the consumer is sovereign”?
From the demand side an economic case can be made for a competitive tax regime overall.
Demand from consumers of oil could be considerably increased if overall taxes on fuel were cut. Removing VAT and substantially cutting fuel duty would stimulate demand from all consumers, not only motorists.
Objections from the green lobby are expected but taxation isn’t the way to tackle global warming.
Arguably, measures to reduce costs and increase supply through investment incentives are counterproductive without boosting demand.
Old Chapel Walk
I find this hypothetical oil crisis a complete farce.
What other country would endeavour to provide financial support from taxpayers’ money to an organisation that makes billions of pounds in profit each year?
The answer is clear: only a Conservative-led coalition government whose friends are all major shareholders in these companies.
The oil companies for years have robbed us blind alongside all the British governments since Thatcher, which have imposed high tariffs on these organisations. Yet despite these high tariffs, they are all making substantial profits for their shareholders.
Sadly, this is a sign of the times in a capitalist society where the poorer working classes pay tax to maintain the lifestyle of the elite.
Amazingly, the coalition government has been unable to reduce poverty in the UK or implement a basic living wage, yet when their friends are losing “a few bob” the coffers of the Exchequer suddenly spring open and a tidal wave of funding is available for North Sea investors.
Is it not time that the rich took responsibility for their own mistakes, particularly the ones that led to the age of austerity and the oil crisis?
Instead of using the taxation from the workers, increase taxation on the rich or just get them to pay what they owe and use this to fund their own investments.
Sadly, if the government’s revenue from North Sea oil continues to fall, where will the taxation come to fund our welfare state and NHS? Watch out for benefit cuts.
Seriously, I believe this so-called crisis is a ploy to bring Putin to his knees.
Alexander McKay (Letters, 16 January) says that a “separated Scotland would have been living in an economy in great part based on oil”. This is inaccurate on two counts.
In the first place, while no-one should attempt to diminish the seriousness of the situation, particularly for people whose jobs are at risk, revenues from oil represent under 15 per cent of the Scottish economy.
Secondly, if we had voted Yes, whatever issues and problems this situation has thrown up would have remained the responsibility of the UK Government until March 2016 at the earliest and it’s the price of oil at that time which will be most relevant.
However, for now the UK’s broad shoulders have shrugged and its pockets have been too deep for the short arms of the Chancellor of the Exchequer to reach into to assist.