Scottish government cuts North Sea tax receipt projections
The recent publication, Outlook for Scotland’s Public Finances, has described Scotland’s move to an independent country with strong and sustainable public finances. It anticipates the independence could create an additional £5 billion per year by 2029-2030.
Key findings of the paper include:
1. Over 2008-2009, to 2012-2013, Scotland held a strong fiscal position of £8.3 billion, being equivalent to £1,600 per person.
2. On the forecasts by the Scottish Government, Scotland’s finances in 2016-2017 will be at least similar to, if not stronger than both the UK and the G7 industrialized countries.
3. The net fiscal balance for Scotland in 2016-2017, considering all revenues and spending, continues to be within the range set out in Scotland’s Future.
First Minister Alex Salmond said of the paper:
“Scotland is one of the wealthiest countries in the world, more prosperous per head than the UK, France and Japan, but we need the powers of independence to ensure that that wealth properly benefits everyone in our society. That wealth means we will start life as an independent nation with strong finances and huge economic potential.”
“The latest figures show that by using the powers that only independence will bring we can deliver an independence bonus with increased revenues for Scotland. The choice Scotland will make in September is between the opportunity to grow our economy, to boost revenues and to invest in public services or to continue with an economic policy set in Westminster that ignores Scotland’s needs. This analysis shows that on all headline measures of the public finances, Scotland’s fiscal position is forecast to be stronger than or at the very least level with the UK position.”
“This paper gives a very clear picture of what independence could deliver in economic terms for the people of Scotland. By increasing productivity by 0.3 percentage points per annum, boosting the working age population by less than the predicted UK rate, and increasing the employment rate by just over 3 percentage points, bringing Scotland up to the same standard as the top countries in the OECD, we can generate over £5 billion a year of extra revenues within 15 years, without increasing tax by a penny.”
“People in Scotland are getting a raw deal under the current arrangement – paying more into Westminster than we get out. In the five years to 2012-13, Scotland has on average accounted for 9.5% of UK tax receipts with estimates showing we have received 9.3% of UK public spending. Tax receipts in Scotland have averaged £10,000 per head over this period, £1,200 or 14% higher than in the UK as a whole.”
In addition the 3rd bulletin on Oil and Gas has been published. It looks at the projections for the industry over the next five years. The estimates at this stage are that declines in production are starting to be reversed.
Finance Secretary John Swinney said:
“North Sea oil and gas is a fantastic natural asset which has a great future for many decades to come. And it is vital that we make sure future revenues are invested in the future of Scotland, unlike the way they have been squandered by successive Westminster administrations over the last 40 years.”
“Using the industry estimates of production and realistic oil prices it is clear that Scotland’s oil industry will continue to make a valuable contribution to our public finances for many years to come. As the industry recovers from UK tax changes, invests in new fields and extends the life of existing fields, revenues will begin to rise again.”
The forecast for production anticipates an increase of 14% between 2013 and 2018.
Swinney continued:
“The figures published today show that Scotland’s finances in 2016/17 will be in a strong position and future Scottish Governments will have the opportunity to start an oil savings fund from the point of independence.”
“Scotland is rich in natural resources, with estimates showing that we are the largest oil producer and the second largest gas producer in the EU. Up to 24 billion barrels of oil and gas reserves remain under the North Sea – it is vital that Scotland benefits from that wealth to come.”