Watchdog predicts a fall in oil revenue

THE UK’s projected oil and gas revenue for the next 30 years have been significantly lowered, according to a new report from the public finance watchdog.

The Office for Budget Responsibility projects oil and gas receipts to be 0.05 per cent of GDP by 2040/41 - half the level it projected in last year’s report.

It said the main driver for this was lower projected prices for the commodities, describing oil and gas as the “most volatile of the main tax streams”.

This year the Treasury will benefit from £11.2 billion in taxes from oil and gas - expected to fall to £2.9 billion in 2040.

Scottish Secretary Michael Moore said projections could not be ignored by the Scottish Government and provided further evidence of the long-term consequences of independence.

However, a government spokesman highlighted the fact that more than half of North Sea oil and gas are reserves yet to be extracted.