This just in from those mamby pamby limp wristed pinkos at the Grauniad.
SNP referendum oil figures ’13 times higher than reality’
New figures published by the Office for Budget Responsibility show the North Sea is only expected to generate £600 million next year, compared to the SNP’s prediction of £7.9 billion
The SNP’s White Paper on independence predicted oil revenues of up to £7.9 billion next year Photo: Getty Images
By Simon Johnson, Scottish Political Editor
6:59PM GMT 18 Mar 2015
The extraordinary extent to which the SNP inflated North Sea oil revenues during the independence referendum has been disclosed by official figures predicting they will be more than 90 per cent lower than the Nationalists claimed.
The impartial Office for Budget Responsibility (OBR) dramatically revised down its predictions for how much oil and gas will generate for the rest of the decade, projecting the sector will only generate £600 million in 2016/17.
But the Scottish Government’s White Paper on independence predicted that between £6.8 billion and £7.9 billion would flow into the public purse in that year, when the SNP said Scotland would become independent, up to 13 times more.
Alex Salmond and Nicola Sturgeon also promised referendum voters that another “oil boom” was on the horizon, but the OBR said revenues are set to fall to 0.05 per cent of national wealth in 2015/16, the lowest figure in 40 years.
Although the sharp drop is partly thanks to the collapse in the oil price, which happened after the referendum, the OBR also pointed to high operating and investment costs and declining production.
The Unionist parties said the projections badly damaged the Scottish Government’s economic credibility and they demonstrated that a Yes vote last September would have meant billions of pounds of public spending cuts.
Annual North Sea revenues are not expected to increase above £800 million for the rest of the decade but oil would need to generate around £8 billion per year – ten times as much – to maintain currently spending levels in a separate Scotland.
The figures were published as George Osborne used his last Budget before the general election to announce a £1.3 billion package of tax breaks and allowances to help sustain the industry.
Sir Ian Wood, the North Sea’s most eminent expert, led industry praise for the announcement and said it would minimise job losses and provide an “essential lifeline” to start rebuilding confidence and investment.
The Chancellor said it “goes without saying” than an independent Scotland could not afforded the support and it was one of the UK’s great strengths that “we share our challenges and find solutions together.”
Murdo Fraser, the Scottish Tory energy spokesman, said: “We knew the SNP’s oil projections were fanciful. But today’s forecasts show even its most pessimistic prediction was out by more than ten times.
“That’s humiliating for a Scottish Government which claims to have economic credibility. Had Scotland voted Yes, we’d be staring down the barrel of a gun.”
Jackie Baillie, Scottish Labour’s finance spokesman, said the figures also demonstrated the “devastating consequences” of the SNP’s general election demand for full fiscal autonomy. This would mean all Scottish spending would be funded from taxes raises north of the Border.
The OBR said oil revenues dropped 44 per cent to £2.6 billion in the current tax year thanks to the sharp drop in the price and continuing increases in operating and investment costs.
But the economics said only £700 million will be generated on 2015/16, £1.5 billion less than they forecast at December’s Autumn Statement. The £600 million estimate for 2016/17 has been revised down by £1.8 billion.
The North Sea is predicted to produce £700 million in 2017/18, £800 million the following year and £700 million in 2019/20, the end of the forecast period.
The OBR predicts the oil price will recover but only to $71.4 per barrel, whereas Ms Sturgeon has continued to insist it will shortly bounce back to $100. Its White Paper projections were based on $110.
Part of the drop in revenues has also been caused by Mr Osborne’s package of tax breaks for the industry, which the OBR said would mean production will be 15 per cent higher in 2109 than it otherwise would have been.
Announcing the package, the Chancellor said it amounted to “bold and immediate action” to tackle a “pressing danger” to the industry’s future.
He said the Petroleum Revenue Tax will be cut from 50 per cent to 35 per cent next year to support continued production in older fields and a new “generous” allowance will be introduced next month to stimulate investment.
Mr Osborne also reversed a 2011 increase in a supplementary charge on corporation tax, cutting it from 30 per cent to 20 per cent with effect from January this year, and announced new seismic surveys for “under-explored” areas of the North Sea.
Sir Ian, who built the Wood Group into one of the world’s leading oil companies, had warned before the Budget that 80,000 jobs were at risk without significant support.
He said there would still be between 5,000 and 10,000 job losses but the package would give operators the confidence to continue during the “serious price downturn” and minimise the number of fields being decommissioned and shut down.
Oil and Gas UK, the industry body, predicted the measures would unlock £4 billion more investment and lead to 500,000 more barrels of oil being extracted.
Malcolm Webb, its chief executive, praised them as “sensible and far-sighted” and said they would lay “the foundations for the regeneration of the UK North Sea.”
John Swinney, the Scottish Finance Minister and Deputy First Minister, said: “Labour and Tories remain joined at the hip in talking Scotland down.
“They are also guilty of massive hypocrisy, as the Scottish Government’s oil price forecasts were in line with international projections – and the UK Government’s own Energy Department was anticipating oil prices reaching around $130 a barrel in 2018.”