Oil of little value in independent Scotland

Sir, – Nick Decker and others have been making preposterous claims about the potential benefit of oil to an independent Scotland.

Their claims are as overblown as those of Alex Salmond and Nicola Sturgeon in 2014 when they predicted that oil prices would remain over $100 a barrel.

They also claimed we were “on the cusp of a second North Sea oil boom”.

Both predictions were nonsense and, as a result, actual oil revenues between 2014 and 2018 were £30 billion less than they predicted.

No apologies were ever given for the fantasy.

Oil extracted from the North Sea is owned by private companies and its value to the Scottish economy lies only in the tax it produces.

In 2018/2019 that was £1.43 billion which is only 2.28% of the Scottish Government’s total income.

As Sturgeon couldn’t get away with such whoppers twice, she appointed a so-called Growth Commission to come up with a new blueprint for independence.

Its author, Andrew Wilson, has said “...we’ll assume for the purposes of our projections that oil is producing zero revenues and therefore treat any revenues that we get from oil as a proper windfall to be used on intergenerational projects rather than spent on spending today.”

In plain words, that means Scotland’s oil revenues are so unreliable that we will put whatever we get into a piggy bank for some long term use.

Your “oil-will-makeus-rich” correspondents also fail to understand that the discovery of new reserves is of no benefit unless they can be profitably extracted.

Shale-to-oil operations in the USA have driven down the market price and a stagnant world economy will have the same effect.

To ignore these facts and get excited by reported “finds” is to be as reckless as Salmond and Sturgeon were in 2014.

Meantime, Sturgeon’s government spends £12.6 billion more than it receives in income giving us a 7% fiscal deficit – which is the highest in Europe.

So high, in fact, that the Growth Commission expects that it will take 5 to 10 years to get down to the 3% necessary for admission to the EU.

A more sober assessment of the prospects for an independent Scotland was given in 2017 by Moody’s, one of the world’s three main credit rating agencies.

They said that our credit would have “junk” status – in the same group as Guatemala and Azerbaijan.

Denis Munro. Beaumont House, Perth.