12 Jul 2012
A report released today has estimated that the projected revenue generated by North Sea oil and gas by 2040 will be only half the amount of previous estimates.
The figures contained in the Office of Budget Responsibility’s Fiscal Sustainability Report also show oil production fell by five per cent last year, and has dropped 60 per cent since the 1999 peak.
Alex Salmond has long stated North Sea oil and gas would underpin the economy of a separate Scotland, but today’s report concluded that oil and gas revenue is “the most volatile of the main tax streams” in the UK.
In addition, it was found that oil and gas revenues accounted for only 0.7 per cent of UK GDP this year, compared to a far more significant 17.7 per cent of Scottish GDP in 2010/11.
Scottish Conservative finance spokesman Gavin Brown said:
“The SNP’s strategy of a separate Scotland being so reliant on oil and gas is a risky and ill-judged approach.
“This report has dramatically downgraded its projections for oil and gas revenue over the next 30 years.
“As part of the UK this uncertainty can be endured, but a separate Scotland dependent on oil money would find it far more difficult.
“The result of this would see either an increase in taxes or spending cuts to account for the shortfall.
“We need the oil and gas sector to be as successful as possible, and everything should be done by both the UK and Scottish Governments to ensure this is the case.
“Today’s report once again highlights the immense benefits of Scotland being part of one of the most successful economic unions in the world.”
The information on the future of oil and gas revenue is on p96 of the below report: