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How the economic case for Scottish Independence was weakened in the last week

June 30th, 2015

Oil figures

Picture credit: Twitter

How opponents of Scottish independence may have struck metaphorical oil in the last week.

The top table (table 5) is taken from the Scottish Government’s white paper on independence published in late 2013, whilst the bottom table (table 1) is from the Scottish Government’s Oil & Gas bulletin published last week. As the Guardian notes

The Scottish government has been accused of trying to bury a report that predicts North Sea oil revenues could be £40bn less than the SNP’s most optimistic forecasts by releasing it the day before Holyrood’s summer recess – and after the deadline for emergency questions.

The oil and gas bulletin published by John Swinney, Scotland’s finance minister, reveals that revenues are expected to plummet to well under a quarter of recent forecasts, falling to as low as £2.4bn in total over the next four years.

The bulletin shows a vast gulf between the most optimistic figures given to Scottish voters before last year’s independence referendum by Alex Salmond – then the Scottish National party leader and first minister – who said a future oil boom would underpin a surge in productivity and national wealth after a yes vote.

It will be difficult for supporters of Scottish independence to attack these figures, as they were produced by their own side, no wonder the Scottish government released them on the last day before Holyrood’s summer recess.

I’ve always proceeded on the premise that the Scots will never vote for independence if it leads to them becoming poorer nor will they vote for independence if it leads to economic uncertainty.

Coupled with the Scottish independence movement’s lack of definitive answers on a currency union or the currency an independent Scotland would use, as Greece may well provide a real life example of a country with debt/deficit problems and issues over the currency they may use, might prove to be alarming and illuminating to Scots contemplating Scottish independence.

In any future independence referendum, with the substantial role the oil industry has in the Scottish economy, you can be sure opponents of independence will be reminding the advocates of Scottish independence of their terrible forecasts on oil in the past.

TSE