Oil slump hits Scots finances
● North sea revenues in the red ● Further slump in the trade deficit
Scotland’s share of North Sea oil revenue went into the red for the first year ever in 2016, new figures show.
The latest quarterly national accounts reveal the amount received in tax receipts fell to minus £338 million over the 12-month period.
Economy secretary keith Brown said the latest statistics “highlight the challenges facing the Scottish economy” in the wake of Brexit and the oil slump.
The full extent of the oil price crash on Scotland’s economy has been revealed in new figures which show the North Sea tax receipts were negative for the first full year on record in 2016.
Scotland effectively fell into the red to the tune of £338 million as the cost of commitments like decommissioning and fresh investment in new fields outweighed the take in taxes from energy giants operating in the North Sea.
This compares with £11.5 billion in taxes when the North Sea was thriving in the 2008/9 financial year or £5.5bn in 2012/13 just before the current slump.
It meant that Scotland’s economy grew at just 1.7 per cent, less than half the 3.6 per cent rate of the rest of the UK, according to the latest Quarterly National Accounts for Scotland.
In a gloomy picture for the nation’s finances, there was a further slump in the trade deficit, as exports fell by £16bn in relation to goods imported to the country.
Economist John Mclaren said the figures paint a worrying outlook for future growth, as Holyrood’s new fiscal powers means the country is increasingly reliant on the economy to ensure public spending levels hold up.
He added: “It shows that 2016 was a disappointing year for the Scottish economy. Much of this was connected to a further decline in the contribution of the North Sea. Furthermore, the Scottish Trade balance for 2016 has worsened by £1.6bn from 2015 and the sav- ings ratio is at a record low. As a result, worries persist over the economy’s future growth potential and over the self financed element of the Scottish budget.”
Economy Secretary Keith Brown said the latest statistics “highlight the challenges facing the Scottish economy”.