FMQs: Alex Salmond under pressure over oil revenue

FIRST Minister Alex Salmond came under pressure from opposition leaders at Holyrood to explain how an independent Scotland would deal with the dramatic fall in oil revenues suffered last year.

First Minister Alex Salmond. Picture: TSPL

Scotland’s deficit - the shortfall between public spending and the taxes raised to pay for them - jumped to £12 billion after North Sea receipts dropped by £4.4 billion in 2012-13, it emerged yesterday.

Mr Salmond told MSPs at First Minister’s Questions today that the UK is in deficit by more than £100 billion, but insisted Scotland is in a “relatively stronger position” over the past five years.

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But Labour leader Johann Lamont said that Scotland’s public finances would be in worse shape than the UK based on the most recent figures.

First Minister Alex Salmond. Picture: TSPL

“Will he now confirm that the rest of the United Kingdom has a relative surplus compared to Scotland’s relative deficit?” she said.

“And can he explain how he would maintain our schools when he has lost the equivalent of an entire school’s budget - would he cut services or raise taxes?”

The SNP leader accepted that Scotland was £283 per head poorer than the wider UK last year.

But he added: “There was a positive £489 difference the year before, £214 the year before that, £75 the year before that and £1,100 in 2008/09.

“That is a total of £1600 per head - over the last five years that is how Scotland would have been relatively better off than the UK a whole.”

Mr Salmond said this means Scotland could have “borrowed less or invested more or had the stabilisation fund to make sure over that period we could use that wealth to benefit the people of Scotland.”

Tory leader Ruth Davidson said being part of the UK helps Scotland to “absorb these shocks” and the Westminster Government is “fast tracking” recommendations in a recent report from North Sea tycoon Sir Ian Wood to get the most from the remaining oil and gas reserves.

“We have the support from the UK Government to keep the North Sea going and we have the support of a nation with broad shoulders to absorb the shocks,” she added.

“The last thing we need right now is to end these advantages.”

Liberal Democrat leader Willie Rennie claimed that “one year of problems” with North Sea oil resulted in £4 billion being wiped off Scotland’s balance sheet.

“Which taxes would go up and which taxes would be cut?” Mr Rennie added.