Scottish finances in a trough as North Sea oil revenues dry up

Scotland’s share of North Sea oil tax revenues slumped steeply from £1.8bn to just £60m amid falling oil prices [Image: Murdo Macleod for the Guardian].

Scotland’s share of North Sea oil tax revenues slumped steeply from £1.8bn to just £60m amid falling oil prices [Image: Murdo Macleod for the Guardian].

If I recall correctly, the plan for Scottish independence prior to the 2014 referendum relied heavily on North Sea oil revenues.

It seems that, by voting against independence, Scotland has had a very lucky escape, in financial terms.

Of course I could be wrong. Would anybody who supports Scottish nationalism like to explain how Alex Salmond (SNP leader at the time) and his party could have made it work?

The gap between Scotland’s public spending and tax revenues have worsened after the crash in global oil prices led to a deficit last year of nearly £15bn.

The latest official data showed Scotland’s structural deficit was more than twice that of the UK’s last year, after its share of North Sea oil tax revenues slumped steeply from £1.8bn in the previous year to just £60m.

The Government Expenditure and Revenue Scotland (Gers) figures showed that during 2015-16 the country’s tax receipts were £400 less than the UK average at £10,000, after several decades during which oil had pushed Scottish tax receipts above the UK level.

The gap between Scottish tax revenues and spending had also grown sharply, Gers revealed.

Source: Scottish finances worsen as fall in oil revenues leads to £15bn deficit | Society | The Guardian


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18 thoughts on “Scottish finances in a trough as North Sea oil revenues dry up

  1. Joan Edington

    I’m not going to get sucked into a could they or couldn’t they make it alone argument since I am not an economist. I will only point out a couple of things.

    GERS is a system based mainly on unknown forecasts and was brought in by the Tories with its main purpose being to throw fairly random figures at the Scots before the referendum, in order to instil doubt.

    “after its [Scotland’s] share of North Sea oil tax revenues slumped steeply from £1.8bn in the previous year to just £60m”. An independent Scotland would receive the vast majority of tax revenues on oil/gas, not just “its share”. Obviously the UK would retain revenues from that part of Scotish waters that Dewer and Blair stole at the time of devolution.

    These would not fill the entire hole, even with Trident savings, but then the UK isn’t looking too hot financially these days either.

  2. Gavin Proctor

    Scottish finances are up a creek and will be until oil prices (and the revenues connected to them) return to relatively normal market levels. However you don’t view a nations finances on one or two years but over a longer period, if you take UK finances in 2009 or 2010 you have similar levels of deficit to Scotland today.

    We all know that over a 20-30 year period a few years of even very extreme deficit aren’t the death knell of an economy, especially when the costs of borrowing are relatively low due to interest rates.

    Now the question is will oil recover, how long will it take and what damage that will do to jobs and employment in the North East, what steps will be taken to help employers and workers survive the downturn. During the referendum one of the many positives to remaining in the UK was promises of protections and assistance for workers in the industry and this hasn’t materialised. The Scottish executive has scraped a few squid into a retraining fund for young people made redundant during an apprenticeship which is some help but Westminster has done nothing.

    The economies of Scotland, North England and Wales are relatively weak and this has been the status quo for decades and our continued membership of a political union with insanely centralised spending policies hasn’t done anything to fix it, so I have to ask what good is staying in a union that has no political will or motivation to solve this problem?

    Scotlands economic problems can be argued as a good reason to stay within Union, but they could also be the reason we need to leave the Union.

  3. Adrian D.

    I’d usually check out WingsoverScotland, or Business For Scotland for a (usually well source-supported) take on such things.

    It’s worth noting that the ‘Scottish’ deficit hasn’t changed that markedly despite the loss of the oil revenue and that this seemingly poor performance comes from a Scotland as part of the UK – which frankly says very little good about the Union.

    1. Mike Sivier Post author

      I wouldn’t use Wings over Scotland as a fact check unless it had markedly improved its factual impartiality, and I don’t think that’s likely.

      1. Adrian D.

        I know wings has definitely got an agenda (the Rev is completely upfront about it), but I’d be interested to see your evidence for your concerns about the sites fact checking problems.

      2. Mike Sivier Post author

        My experience with that site in the run-up to the Scottish referendum suggests it leaned heavily towards whatever supported its editorial position. Has that changed?

      3. Joan Edington

        I totally agree with you about WoS being biased since it is a recognised pro-independence web site that never claims to be impartial. However, to say you would never use it is showing your own bias against it. Although most of the articles are heavily laden towards its audience, there have been several that have been researched well and it does a good job of showing up the bias of the MSM.

      4. Mike Sivier Post author

        Why would I not be opposed to using a biased site?
        VP is a comment site but the facts need to be accurate.

      5. Joan Edington

        There is a difference between understood editorial bias because of a leaning and the bias of lies used by the MSM. WoS does not intentionally tell lies to sway opinion.

      6. Joan Edington

        Maybe not but, with your history of hating all things SNP-related, I would respectfully suggest that you are probably more prone to look for articles you can disagree with than those that might uphold facts you perceive to be false.

      7. Mike Sivier Post author

        Maybe. SNP does have trouble with objectivity but we’re also seeing that a lot of information – that should have been factual – was skewed.

  4. pj21516

    Hi Mike, Joan from Edington has given you an excellent reply she also makes good sense and I believe this must be the first time you have sided with a bulls**t invented piece of legislation dreamed up in la la land by some obscure Tory civil servant, before I answer your query regarding my Nation standing on Her own two feet I am an old guy now who went to school in the 50s and 60s when teachers were more interested in battering you with a piece of leather with a snake tongue end than teaching you the most rudimentary knowledge of Arithmatic,Grammar and Science, so any of you Grammar Police out there break a leg, now In answer to your query Yes My Nation Scotland could without any question Stand on Her Own has anyone ever seen Oil per Barrel stay low priced for ever No one has, we the British people have been dragged into poverty landed with the worst Government in living memory suffered Hate Filled Propaganda been Lied to about Austerity and two Democratically won Referendums are under attack from unscrupulous Politicians wishing to enhance their own agenda, I voted Yes for Indipendance I voted out for the EU question in no way shape or form should these two Referendums be re-run for the reason the majority of British People voted OUT, and the Majority of the People of Scotland Voted STAY it is time these whinging Politicians Shut It accept the Will of the Majority and get on with attempting to sort out the Bloody Mess the Conservative Government has made, Slanje to my Brothers and Sisters South of the Border and Here’s tae Ye my Brothers and Sisters in Scotland and Ireland

    1. Mike Sivier Post author

      To be honest, I thought the information was on the level and did not expect the response I’ve had about GERS.
      It goes to show there’s a lot more going on under the surface than most of us ever see, I suppose.

      1. Joan Edington

        Don’t feel bad about it Mike. You’re no different to most non-Scots in your knowledge of such things that we have to deal with up here. Too many folk down south are all too ready to jump in with the “whinging Scots again”, without ever researching the issues, irrelevant to them, and realising that often we have reason to whinge.

      2. Mike Sivier Post author

        I’m not going to feel bad about it when a realisation that the government is misleading us all is met with a patronising comment suggesting I am ignorant.

      3. Joan Edington

        With this awful (non-)format I can’t reply to the post I want to. You ought to know me better than to suggest I consider you to be ignorant. I was merely pointing out that not everyone researches topics that are not as relevant to themselves as they are to the people they affect. In the same way, although I am entirely sympathetic with the plight of the disabled and mentally-ill under this government, I am not as likely to research it in the same detail as you do yourself.

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