Gap between SNP's 2014 plans and North Sea revenue reaches £30bn

The SNP should apologise for the growing black hole in the economic prospectus for independence as the shortfall in oil revenues reaches £30 billion, Labour has demanded.

Projections in the Scottish Government’s White Paper on independence were more than ten times bigger than estimated revenue from taxes on North Sea oil and gas production in each of the past three years.

It means the shortfall in revenue is expected to reach £29.9bn by the end of this year.

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On the eve of the fourth anniversary of the 2014 referendum, Scottish Labour’s economy spokeswoman Jackie Baillie MSP claimed the figures confirm that the economic case for independence was “nothing more than snake oil” and “a lie”.

Alex Salmond and now First Minister Nicola Sturgeon hold copies of the White Paper on independence.Alex Salmond and now First Minister Nicola Sturgeon hold copies of the White Paper on independence.
Alex Salmond and now First Minister Nicola Sturgeon hold copies of the White Paper on independence.

Economic projections in the 2013 White Paper were based on Scottish Government models that predicted oil prices would be broadly stable for at least two years.

However, the price of crude oil plunged in the second half of 2014, as the independence referendum reached its climax, nearly halving from $112 per barrel in June to $58 in December.

Oil prices hit a low of $28 in 2016 before steadily rebounding to their current level of around $75.

This summer saw the publication of the SNP’s Growth Commission report, which the party hopes will convince voters that it has a more realistic economic vision of independence.

Its author, Andrew Wilson, admitted that the White Paper had a robust oil price “baked into the numbers” in 2014 but promised that a future referendum would be fought with North Sea revenues treated “as a proper windfall”.

“I can say with some certainty in terms of our own work that we’ll assume for the purposes of our projections that oil is producing zero revenues and therefore treat any revenues that we get from oil as a proper windfall to be used on intergenerational projects rather than spent on spending today,” Mr Wilson said last year.

Ms Baillie said: “The SNP told voters that Scotland was on the cusp of a second oil boom, and that oil was simply a bonus when it came to the costs of independence. That was simply a lie.

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“Instead, the figures that Nicola Sturgeon campaigned on have a £30bn black hole in them.

“That would have led to turbo-charged austerity on an unprecedented scale, with huge cuts to schools, hospitals and social welfare programmes.

“These figures were baked into the promises the SNP made to some of the poorest communities in our country. It was nothing more than snake oil.”

Ms Baillie added: “Nicola Sturgeon should be apologising to the people of Scotland for misleading them on an industrial scale. Rather than attempt to divide the people of Scotland again with a referendum the country does not want, it is time the SNP focused on jobs, schools and hospitals.”

The SNP’s Westminster economy spokeswoman Kirsty Blackman hit back, claiming that “Labour’s only contribution as ever is to do Scotland down”.

“The people of Scotland deserve an apology from Labour – who shamelessly told us voting against independence would protect our EU membership but are now working hand-in-hand with the Tories to drag us off the Brexit cliff edge against our will,” Ms Blackman said.

She added: “Tory and Labour plans for a hard Brexit are by far the biggest threat to Scotland’s economy and long-term prosperity – with the potential to cut Scottish GDP by up to 9 per cent, costing £12.7bn a year and putting around 80,000 jobs on the line.”