Scottish independence: Oil forecasts down £11bn

Picture: AFP/Getty
Picture: AFP/Getty
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THE predictions for Scotland’s future oil wealth until 2041 have been downgraded by £11 billion by the independent Office for Budget Responsibility (OBR), a fall of more than 15 per cent on previous estimates.

The OBR report predicted tax revenues between 2017-18 and 2040-41 would be £56bn, compared to its previous estimate of £67bn. The figures mean that oil will account for 0.03 per cent of UK GDP compared to the hoped for 0.05 per cent.

The OBR has already questioned claims by First Minister Alex Salmond that there would be more than £40bn revenue from oil in 2018, suggesting the total would be £7.5bn less.

The latest report by the OBR appears to confirm a private admission by SNP finance secretary John Swinney in a leaked memo that oil revenues will not be enough to prevent spending cuts and tax rises in an independent Scotland. Liberal Democrat Chief Treasury Secretary Danny Alexander said: “Scotland has a thriving oil industry that plays a key role in the UK economy. But independent forecasts like the OBR’s consistently show oil revenues are set to decline in the long term – a fact confirmed by John Swinney’s secret internal analysis.

“This would leave a massive gap in an independent Scotland’s finances. Scotland is better off dealing with a volatile resource like oil in the UK.”

Former Labour Chancellor Alistair Darling, who heads the Better Together campaign to keep Scotland in the UK, said: “It is absolute madness for the SNP to base their case for separation around a commodity that is declining and volatile.

“The SNP promise the earth on public services, welfare, pensions and an oil fund off the back of oil and gas revenues. Yet, the OBR’s figures make clear that revenue from the North Sea is declining now and over the long term.”

But last night the SNP hit back, pointing out that even without oil and gas the Scottish GDP is the same as the UK average. SNP Aberdeen MSP Mark McDonald said: “The No campaign’s Project Fear is fast becoming a laughing stock – it pretends that it would be really bad for Scotland to have access to our own oil and gas tax revenues, but really good for Westminster to grab them all.

“The reality is that an independent Scotland would be less reliant on North Sea revenues than highly-successful Norway, and more than half the value from Scotland’s oil and gas resources is still to come.

“Even without oil, Scotland’s GDP is the same as the UK average – it is an enormous bonus for Scotland, and we need a Yes vote next year to ensure that these resources work for Scotland.”

Marr: Independence will affect rest of UK more than Scotland

BBC broadcaster Andrew Marr has said independence would have a greater impact on the UK than Scotland and that the result of next year’s referendum will be close.

In an introduction to his book The Battle for Scotland, which is being reissued, the journalist and author, who is recovering from a stroke he suffered last year, said that the remaining UK would lose authority and possibly face ejection from the United Nations Security Council.

He writes: “Should the Scots vote for independence, happen they will shake the rest of Britain rather more than we are generally told. The remaining UK will have less punch inside Europe and in international terms, quite possibly lose their seat on the UN Security Council.”

He also said that the nationalist case had changed considerably: “No more Braveheart dissing of the English, but instead an optimistic and inclusive vision of a more self-confident Scotland”. However he also added: “You don’t have to scratch very deeply to find darker, entwined resentment of the English.”