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.”
Posted on: Thu, 18 Jul 2013 07:03:14 +0000
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