SNP anger at ‘dodgy dossier’ on oil income

By Keith Findlay

Published: 25/01/2010

The row over income from North Sea oil and gas reignited last night after the Scottish Government claimed tax on the industry was the only thing keeping the UK Treasury afloat.

Finance Secretary John Swinney said the vital sector would pump £50billion into the exchequer at Westminster over the next six years – the equivalent of £20,000 for every family in Scotland.

The SNP administration at Holyrood accused the Scotland Office of producing its own “dodgy dossier” after it claimed public spending consistently outstripped revenue from north of the border.

But the comments were dismissed as “schoolboy insults” by Labour in London.

The Scottish nationalists said official figures showed Scotland had outperformed the UK in recent decades in terms of balancing the books on public finances and was “significantly subsidising” the rest of Britain.

A spokesman for Mr Swinney said: “Our oil and gas industry is the only thing keeping the London Treasury afloat. Over the next six years, £50billion worth of North Sea revenues will flow to the London exchequer.

“That alone represents over £20,000 for every household in Scotland.”

Industry body Oil and Gas UK estimates output from the UK Continental Shelf could be worth up to £1.25trillion over the next couple of decades “with the right regulatory climate” – meaning continued significant tax income for the Treasury.

The offshore sector has long fought for tax breaks to help encourage new exploration and maximise reserves in hard-to-develop fields, and Aberdeen-based oil tycoon Sir Ian Wood has said the North Sea could “haul the UK out of debt”.

Mr Swinney’s spokesman claimed the Scotland Office’s analysis of the situation was “fundamentally flawed” in a number of areas.

And he added: “The document claims there is a deficit between Scottish tax receipts and UK Government expenditure of £2,700 per household.

“It is Britain that is bust, not Scotland – and these figures prove it. This is another ludicrous attack on Scotland by a Labour government whose woeful mismanagement of the economy has put the UK into a £180billion deficit this year.

“The Scotland Office should change its name to the ministry of anti-Scottish propaganda, given that its sole purpose these days seems to be issuing fantasy figures that do the country down.

“Government Expenditure and Revenue Scotland (GERS) is the official report and it contains the real figures, not this inaccurate dross from Jim Murphy.”

According to the SNP, Scotland outperformed the rest of the UK in fiscal terms over the period from 1980-81 to 2007-08.

It is the second time in a month that the government in Edinburgh has clashed with the Scotland Office – led by Scottish Secretary Jim Murphy – over interpretation of official figures.

In December, First Minister Alex Salmond insisted Scotland was running a budget surplus and accused Labour of launching a “grotesque attack” on the country by saying otherwise.

A Scotland Office spokesman said: “On this evidence, the Scottish Government is either unwilling or unable to add anything beyond schoolboy insults to the debate on Scotland’s economy.

“The very first page of the GERS report, on which the Scottish ministers’ argument relies, makes it absolutely clear Scotland had a fiscal deficit to the tune of £11.1billion in 2007-8. It is simply wrong to claim an analysis of the figures which does not produce the answer they want is anti-Scottish.”

deficit

The spokesman insisted the £50billion of North Sea revenue highlighted by the SNP would not even cover welfare payments to Scottish claimants from the UK Government.

The Scotland Office said last month that Scottish finances were in surplus in only nine out of the last 28 years, 1988 was the last year the country’s finances were in the black and the annual deficit had deepened by £3.5billion in 2007-08 alone.

The SNP claimed Scotland had budget surpluses in each of the three years to 2007-08 however, and the UK was in the black for just six out of the 28 years.