Scottish First Minister Alex Salmond warned over falling oil revenue

PUBLISHED : Monday, 24 March, 2014, 9:08pm
UPDATED : Monday, 24 March, 2014, 9:08pm

Scottish First Minister Alex Salmond has been warned by economists that an independent Scotland's finances are likely to be significantly worse than the UK's after a slump in North Sea oil production.

Economists at the University of Glasgow said the latest oil tax forecasts from the Office for Budget Responsibility in London suggested Scotland's public spending deficit would probably be about £1,000 (HK$12,800) worse per person each year than the UK's until 2018.

The university's Centre for Public Policy for Regions (CPPR) said the Scottish government needed to publish its own updated forecasts to set out the implications of that decline for future spending - a request the Scottish government did not respond to on Sunday. An ICM opinion poll for the Scotland on Sunday newspaper confirmed that support for independence has increased in recent months, just as the Scottish Labour party ended its three-day spring conference in Perth.

John MacLaren, one of the CPPR report's authors, said Scotland's financial advantage after several years of buoyant oil revenues was beginning to disappear after two successive years of far lower oil tax receipts.

With this year's oil revenues expected to be less than £5 billion - compared with £11 billion two years ago - and due to continue to decline, Scotland's far larger spending and tax deficit from the onshore economy was becoming a more significant issue, MacLaren said.

The Guardian