Surge in price of oil fuels SNP claims of £5bn revenue loss

True Scotsman

Scotland's oil is subsidising the rest of of the UK claims Alex Salmond.

http://thescotsman.scotsman.com/politics.cfm?id=1152472006

Surge in price of oil fuels SNP claims of £5bn revenue loss

PETER MACMAHON

HIGH oil prices mean Scotland is "subsidising" the rest of the UK to record levels the leader of the Scottish National Party claimed yesterday.

Alex Salmond said a reworking of earlier SNP calculations revealed that, with oil prices spiralling ever upward, Scotland would this year contribute £5 billion, or £1,000 per person, more to the UK economy than it received.

The figures were rejected by Labour, which said it was "reckless" to base national budgets on something as "volatile" as oil prices.

But Mr Salmond insisted the recent rise in the price of crude oil would force revenues to a 20-year high of £12.7 billion this year, all of which he claimed should come to Scotland.

According to the SNP figures - hotly disputed by the party's opponents - that meant Scotland's surplus would be £5.3 billion this financial year, or £1,039 for every man, woman and child north of the Border. The Nationalists claim that Scotland provided a surplus of £3.55 billion last year.

The latest estimates follow an SNP report published last month which predicted a surplus of £4.3 billion, based on a world oil price of $65 a barrel. But since April the average price of Brent Crude oil has been $70 a barrel.

Mr Salmond said: "As predicted in papers the UK government tried to keep secret from the people of Scotland 30 years ago, our nation has a chronic surplus of 10 per cent of our total government budget.

"That means we are missing out on more than £5 billion a year that could be used to transform Scotland.

"It is a Scottish resource that could kick-start a new era of low- tax economic growth, with Scotland matching the success of our small independent neighbours - Norway to our east, Ireland to our west and Iceland to our north - who are among the top half-dozen richest nations in the world."

Last night Labour hit back at the SNP leader. A spokesman said: "Alex Salmond might like a flutter on the horses, but gambling the Scottish economy on something as volatile as the price of a barrel of oil is, frankly, reckless."

In an attempt to make the point that Mr Salmond's oil revenue figures were only the product of the current crisis in Lebanon, one Labour source went further.

The source said: "The Middle East conflict has had a huge effect on pushing up the international oil price, so it is astonishing that, as the international community is looking for a resolution to the conflict, the SNP is only looking to produce a press release."

Labour sources also pointed out that the price of oil had been driven up further by the discovery of a pipeline leak in one of the United States' largest oil fields.

Oil prices steadied yesterday after scorching to a new record following news BP was halting production at the biggest oilfield in the US, possibly for months.

On Sunday, BP began shutting down its 400,000 barrel-per-day Prudhoe Bay facility in Alaska after discovering a corroded pipeline, and said it could be weeks or months before production resumed.

The West's dispute with Iran over its nuclear programme has also raised concern of possible disruption of supplies from there

Also on the Herald

http://www.theherald.co.uk/politics/67469.html

IF Convenor

Labour doesn't actually dispute the figures, just tries to claim they are unsustainable.

Who cares if they are not going to hold up for long (I work in the business and I see no signs of prices dropping in the near to medium term) the fact is prices are high now and the UK is benefitting from those prices. If Scotland were independent, Scotland would reap the benefits.

azzuri

Yes, the price of oil is extremely volatile - but there is only one way the price is headed long-term, UP!

A finite resource which is currently nearing 'peak' production - the crap that comes from Labour over this issue is pathetic.

Economist

It only confirms what we've known for years. It makes me angry that the majority of Scots, have let themselves be taken for a ride on this issue Evil or Very Mad

, be lied to and meekly accept that. And it's doubly worse when you get ignorant toads, like the Daily Mail, complaining with one hand how much they "subsidise" the Scots, with the other hand outstretched so that their economy and mortgages are stabilised by Scotland's natural resources and public services are financed by them!

Although Scotland does not need oil to survive as an independent country, lots of other places manage without and are richer than Scotland (Denmark). Would be nice if we had been truly able to reap the rewards from our natural resources and perhaps use that to the long term benefit of Scotland.

IF Convenor

Bad example (Denmark). It's a lot smaller than ours, but Denmark has its own North Sea oil industry.

A better example would be Switzerland; no natural resources to speak of but one of the world's richest economies. Oil is just the icing on the cake for Scotland, not the be-all and end-all.

Economist

I didn't know Denmark had an oil industry (of any form), but good for them if they have, at least they're able to control it without interference.

Switzerland, Ireland, Finland, Singapore...even New Zealand. There's lots of places that have managed to fairly prosperous without large scale production of oil. It is certainly the icing on the cake, but Scotland really needs to move onto alternative revenue sources from the future, and not get too caught up with the oil arguments. We've won that argument, but we need to consider the future, is all I'm saying. Embarassed

Reluctant Hero

Oil prices aren't volatile anymore. As has already been said it is only going to go up. This is because of (amongst other things) the emerging economies in India and China, the possibility of Iran halting exports and the probability we have reached Hubbert's Peak - Peak Oil.

I think this is a great site for keeping up to date with everything to do with Peak Oil, especially the Breaking News section which is regularly kept up to date with news regarding everything effecting oil. There are a number of eye opening articles about the US Goverment as well.
http://www.lifeaftertheoilcrash.net/

Blackadder

Thank goodness for nuclear power!!! Smile

SLG

IF Convenor

Where's your sense of adventure?