Cold Water Poured Over Alex Salmond's oil boom claim

Lesley Brennan

26 March 2013

The distinguished Centre for Public Policy for the Regions at Glasgow University has examined new economic figures produced by both the UK and Scottish Governments and their conclusion is at odds with Alex Salmond’s claim that Scotland is on its way to another oil boom.

The CPPR have estimated that even the most promising scenario for North Sea oil revenues still sees Scotland running a deficit for each of the next 5 years.

In December of last year, the CPPR had commented on John Swinney’s statement on the Office for Budget Responsibility ‘s figures for oil revenues, in which Mr. Swinney claimed,

The latest figures, with oil revenues for 2011-12 at near record levels, confirm that an independent Scotland would yet again be in a stronger financial position than the UK as a whole.

"A position that could enable us to ease the austerity and invest in growing our economy.”

They said of Mr. Swinney’s claim, “This is likely to be true,  but only for 2011-12.

“Post 2014- 15 the reverse is likely to be true, implying a position that would lead to greater tightening of austerity.”

The CPPR noted as well :

“ It seems inevitable that future North Sea tax revenues will remain difficult to predict.

"Not only do oil prices remain highly erratic and unpredictable but production from the North Sea also appears to be getting more erratic and difficult to predict.”

Andrew Goudie is an academic calling for a higher quality of evidence in the debate on the constitution. 

He is the former Chief Economic Adviser to the Scottish Government , whose new book “Scotland’s Future” is published by Dundee University Press. (link) 

 In today’s  Scotsman he asks,

“While the debate on constitutional change has entailed considerable discussion of the specific economic powers that might be transferred to Scotland, there has generally been far less emphasis placed on accurately identifying the potential value of those powers, particularly in the sense of the achievability of the critical outcomes that motivate government.

“Would the transfer of greater economic powers provide significant new economic opportunities that would substantively facilitate the achievement of any targeted outcomes? Or would extended powers carry greater risks and uncertainties that would overwhelm the opportunities ?

And he observes,

“Where these questions have been addressed, the responses have typically suffered from a paucity of evidence to support specific propositions and, instead, have sadly often lapsed into cavalier assertions with little or no foundation.”

Such comments from academics are not good news for the case for Scottish independence.

Their work cannot be dismissed in the same way that the comments of opponents of independence are dismissed when these opponents spell out the risks of an over-dependence of oil revenues a major source of national income.

The basis of their work is factual, dealing with the economy, and not on appeals to nationalist spirit  or Scottish “uniqueness” .

The Referendum will be decided on an economic case, not on a patriotic case.

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