We need to do careful sums over oil
There is also no doubt that oil and gas prices will continue to be volatile in the future although oil in particular should continue to maintain its long-term underlying upward trend.
On the other hand, many other countries – including England should Scotland become independent – would certainly welcome the relative boost to their economies that the reserves already estimated to be exploitable in the future would offer an independent Scotland.
The only perceived headache associated with the huge boon of these reserves to Scotland’s economic future would appear to be caused by the economic uncertainty likely to be caused by the volatility of global oil and gas prices.
One relatively simple solution would be conservatively to base future government spending decisions on minimum oil and gas price estimates (I believe the Office for Budget Responsibility figures suggest tax revenues of £31 billion over the next six years) and commit revenues in excess of this amount to a Scottish oil fund.
This fund could be built up (perhaps to as much as £10bn to £20bn over the same six-year period if the formula adopted effectively transferred the bulk of additional revenues) to bolster Scotland’s prosperity for generations that follow long after our oil and gas reserves are eventually exhausted.
Surely even the most ardent unionists can agree that such an essentially straightforward strategy would seem to be a win-win scenario for an independent Scotland before considering other economic issues that will confront us whether Scotland’s economy is run from Holyrood or Westminster.
Once again, we have a choice. Do we believe the First Minister’s wildly optimistic oil revenue figures, conveniently coming to hand out of the blue after the dire economic predictions last week (your report, 12 March)?
Or do we believe the independent and neutral experts of the Office for Budget Responsibility? It is exactly the same as EU entry. We can believe the EU president and his team of lawyers, foreign ministers of European countries with no axe to grind, or we can believe the bland reassurances and assertions of the First and Deputy First Minister of Scotland. Ditto the Bank of England and interest rate setting; same again with defence and a separated Scotland’s influence on UK plans.
Those in the pro-UK camp need do nothing. Every day the SNP digs a deeper and deeper hole for itself and from which there is no escape. The more desperate the SNP leaders become, with polls indicating certain defeat, the more outrageous the assertions. It is all rather sad.
Tuesday’s Scotsman very effectively emphasised the considerable variations possible in our future revenues from our projected mainstay, oil, something long awaited.
Looking at just five years forward is, however, insufficient. It may be increasingly difficult to make reasoned projections beyond 2018, but it is essential to try. Breaking away becomes effective for two of those years. There are lifetimes to follow; what happens for the next ten, 20, 30, 100? There is no convincing evidence that revenues from all sources will completely cover current needs including debt repayments and associated interests, never mind long-term developing public expenditures especially for the elderly.
It would be nice to see reasoned estimates showing how the longer term could be financed, or is a pessimistic view the real one? Just saying we will be better off is not a reassuring answer.
The First Minister tells us of the coming oil boom and how all will be well with independence. Sadly, it all depends on whether you believe anything this man says.
Bo’ness, West Lothian