New analysis of oil income reliance

Nov 25 2012

An independent Scotland would not be over reliant on oil because it makes up less of the country's overall income than that of Norway, according to the SNP.

Oil revenues have contributed up to a fifth of Scotland's annual income (21.3%) in the last decade while in Norway it has reached to over a third (36.5%).

The SNP said this new analysis "has blown a major hole" in unionist claims about Scotland's oil dependency. But anti-independence parties said the analysis proves Scotland is better sticking with the UK, where oil revenues contribute just 2% to the overall economy.

Scotland raised £45 billion from general taxation plus £8 billion from oil revenues in 2010/11, according to analysis by the Scottish Parliament Information Centre (Spice).

Norway, which has a similar population to Scotland, took more than twice as much money than Scotland in general taxation (£94 billion) and nearly five times as much in oil revenues (£39 billion). The SNP said that this proves that Norway is "significantly more reliant" on oil than Scotland, but the Scotland Office said Norway does not rely on its oil to pay for public services.

Norway saves most of its oil revenues in an oil fund, a policy First Minister Alex Salmond has pledged to copy "once fiscal conditions allow". But the Scotland Office said Scotland would not be able to set up its own oil fund without cutting public services.

SNP MSP Maureen Watt said: "Anti-independence politicians have repeatedly tried to make bizarre claims that an independent Scotland having a major natural resource to call on is somehow a bad thing. Well, if that's the case then how do they explain the success of Norway which is significantly more reliant on its oil and gas resources than an independent Scotland would be?"

A Scotland Office spokesman said: "This comparison does nothing to answer how a separate Scotland would deal with the dependence of a very large proportion of its revenues - up to 20% of the annual total in recent years - on what the independent OBR calls 'the most volatile of the main tax streams'. Norway's economic and fiscal framework shields it from this volatility, with Norway saving most revenues and spending only the underlying returns."

A Better Together spokesman said: "Only in the confused world of nationalism could having up to one fifth of your economy reliant on a finite, volatile resource be considered good news."

Patrick Harvie MSP, co-convener of the Scottish Greens, said: "Leaving energy policy in the hands of a UK Government obsessed with nuclear and coal power would make no sense for Scotland, where the future is clearly renewable. But chasing after every last drop of oil would be wildly irresponsible too."