UK: Scottish oil-revenue fall dints independence calls

LONDON

Scotland’s offshore oil revenues collapsed by 97 percent in 2015/16, prompting opposition lawmakers to question the devolved government’s recent calls for independence from the U.K.

Government figures released on Wednesday revealed revenues from North Sea oil facilities plummeted from £1.8 billion ($2.4 billion) to just £60 million ($79.5 million), creating a deficit amounting to nearly one-tenth of Scotland’s GDP.

The pro-independence Scottish National Party (SNP) had argued before the country’s 2014 independence referendum that oil revenues from the North Sea would be a solid guarantee of the country’s economic future.

First Minister Nicola Sturgeon insisted the Scottish economy’s foundations “remain strong”.

“The lower oil price has, of course, reduced offshore revenues, with a corresponding impact on our fiscal position -- this underlines the fact that Scotland's challenge is to continue to grow our onshore economy,” Sturgeon said, according to the Daily Mail newspaper.

“However, Scotland's long-term economic success is now being directly threatened by the likely impact of Brexit.”

Sturgeon has said the U.K.’s vote for Brexit – rejected by Scotland, which voted to stay inside the EU – could trigger a second independence campaign.

But opposition Labour leader Kezia Dugdale said the figures should “act as a reality check for those calling for another independence referendum”.

Before the 2014 referendum, the SNP had estimated production in Scottish waters would generate £48 billion [$63.6] in tax revenues between 2012 and 2018, based on an average price of $113 per barrel of oil.

The price of oil has dropped dramatically since then. Brent crude was trading at $97.70 a barrel the day after the referendum on Sep. 19 2014.

This week it was hovering around the $49 mark, having reached lows of $27 a barrel at the beginning of 2016.