Independence case sunk by weak oil and growth forecasts

Ailing industry set to raise 80 times less than Nats predicted

THE SNP’s economic case for independence was yesterday branded a lie after it was disclosed that the North Sea industry will raise 80 times less than Alex Salmond and Nicola Sturgeon predicted.

The Office for Budget Responsibility (OBR), which provides independent estimates to the Treasury and Scottish Government, said oil and gas tax receipts will raise only £100million this year.

In the Scotland’s Future White Paper, unveiled by Mr Salmond and Miss Sturgeon in the runup to the 2014 independence referendum, it was claimed the North Sea would raise up to £7.9billion in 2016-17. However, the latest OBR tax revenue forecasts show the SNP estimate was nearly 80 times higher than reality.

Earlier this week, SNP economist Andrew Wilson said oil was the ‘basis’ of the SNP’s ecofill nomic case for independence in 2014 but can no longer be relied on for any future referendum.

Yesterday, Scottish Labour economy spokesman Jackie Baillie said: ‘The SNP’s economic case for independence lies in tatters. The official projections for oil and gas revenues have been revised downwards yet again.

‘With a £15billion deficit, the cost of independence to our valued public services would be even more brutal.’

The OBR’s latest estimates for tax revenue predict the Treasury will receive £100million from the oil and gas industry in the year to the end of this month, rising to £900million next year and £800million in 2018-19.

In its White Paper, the SNP predicted Scotland would raise between £6.8billion and £7.9billion from North Sea taxes in 2016-17, its first year as an independent country if there had been a Yes vote.

The Government has previously predicted oil and gas revenues would bring in up to £11.8billion in 2017-18.

Scottish Conservative finance spokesman Murdo Fraser said: ‘These troubling figures throw the SNP’s deception on oil prior to the independence referendum into stark relief. The SNP knew their oil forecasts were based on fantasy figures but they tried to fool people anyway. Their oil con has now been exposed for the tissue of lies it was.

‘Nicola Sturgeon and John Swinney have gone into hiding over this scandal. They must now admit they were wrong and spell out how they would Scotland’s £15billion deficit in the event we voted for independence.’

In his Budget, Chancellor Philip Hammond said he will consider tax cuts to aid the North Sea industry.

He said the UK Government will publish a paper on how to support the industry, hit hard by the slump in oil prices. The panel will look at how the tax system can help oil and gas fields to stay productive.

Deirdre Michie, chief executive of industry body Oil and Gas UK, said: ‘We welcome the Chancellor’ s response to our call to resolve tax issues slowing down asset transfers and his recognition of the need to maximise recovery of remaining UK oil and gas reserves.’

Finance Secretary Derek Mackay said: ‘We have repeatedly called on the UK Government to take steps to incentivise investment and maximise economic recovery.

‘It is encouraging that the UK Government has finally listened to the Scottish Government about the failings of the decommissioning tax regime. This is an area where we have repeatedly called for reform.’

‘SNP knew forecasts were based on fantasy figures’