The SNP’s dreams of a booming independent Scotland based on North Sea oil have been dealt a hammer blow.
The SNP’s dreams of a booming independent Scotland based on North Sea oil have been dealt a hammer blow with further revelations that revenues from the black stuff are once again dwindling.
According to the new Fiscal Sustainability Report published by the Independent Office for Budget Responsibility, it’s central projection has downgraded projected North Sea oil revenues since last year’s report by ‘around a quarter’.
The report explains:
“In our detailed analysis this year, we have returned to the issue of North Sea revenues. We find again that receipts are likely to fall to below 0.1 per cent of GDP over the coming decades.
“Our central projection suggests around £40 billion will be raised in North Sea revenues in total between 2019-20 and 2040-41, down by around a quarter relative to last year’s report. The majority of this change is explained by lower production in our latest medium-term forecast, which knocks through to our long-term projection.
“We have considered a wide range of alternative oil price and production scenarios, all of which imply that oil and gas receipts are on a declining trend as total production from the UK continental shelf moves towards its ultimately recoverable capacity.”
Whilst Scotland’s first minister, Alex Salmond has sought, fairly predictably, to dismiss the analysis as the ‘stuff and nonsense’, the reality is that the economic and financial basis of the SNP’s proposals for independence are fast falling apart, not least given the concerns raised in May by the Institute for Fiscal Studies on the same issue.
One thing is for sure, however – the issue will rear its head on the 4 August, following news that Alex Salmond and Alistair Darling will debate head to head on that day on STV following two weeks of wrangling.
The debate will be a humiliation and blow to Salmond who had insisted that he should have been debating with the prime minister in an effort to turn the debate into a party political confrontation with the Conservative leader rather than a serious assessment of Scotland’s future.
Having recently challenged Salmond to a debate during an interview with the New Statesman, Alistair Darling and the Better Together will be feeling pleased as punch right now.Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.