The big question: Oil

THE question of “Scotland’s Oil” has been a hot political potato for decades.

The pro-independence camp points to how Whitehall has squandered the revenue for years – Alex Salmond even denounced successive UK Governments as “thieves” - and looks enviously across the North Sea to Norway whose oil fund now stands at more than £500 billion, the world’s largest sovereign wealth fund.

The SNP Government insists there is still plenty of the black gold under the sea to help fuel an independent Scotland’s future prosperity. But the antiindependence camp points out the revenue from the North Sea has been dwindling since its peak in 1999 with production falling around eight per cent a year and, most significantly, it will continue to do so. Plus, it is getting harder and costlier to extract.

The No camp claims the Nationalists are hopelessly optimistic about future revenue and warn that they would be foolish to base so much of an independent Scotland’s economic policy on a notoriously volatile commodity.

Q How important is the North Sea oil and gas industry?

A Hugely. The industry employs 450,000 people across the UK and in 2012/13 paid £6.5bn in taxes to the Exchequer.

Q If Scotland became independent, whose oil and gas would it be?

A Using the so-called “median line principle”, used to slice up ownership of the North Sea 50 years ago, Scotland would get a 90 per cent geographic share as opposed to a mere eight per cent share based on population. But, as we know, “everything would be on the negotiating table”; technically, the revenue comes from the UK Continental Shelf.

Q Would an independent Scotland need the North Sea windfall?

A The Nationalists point out that without the oil and gas, Scotland’s economy would be relatively the same as the UK’s as a whole; with it, it would be 20 per cent better off. Alex Salmond has stressed it is a “bonus not the basis” of an independent Scotland’s future economy. But the respected IFS think-tank also noted over recent years the extra revenue would have slightly more than paid for the higher public spending in Scotland relative to the UK as a whole.

Q So a breakaway Scotland faces an economic bonanza then?

A Hold on. This whole subject is based on whose numbers you believe. John Swinney, the Scottish Finance Secretary,