Moore – Oil figures must be based on facts, not fantasy
This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
Scottish Secretary Michael Moore has called for “clear and accurate” use of numbers in the debate over Scotland’s fiscal future.
Speaking before his visit to Porto Alegre in Brazil’s Rio Grande do Sul, an area with considerable off-shore oil potential, the Secretary of State praised the contribution that the UK Continental Shelf makes to Scotland’s economy.
Michael Moore said:
“North Sea oil production provides jobs and supports communities in the North East of Scotland, but the skills it brings and the revenue it raises benefit citizens across the country, just as the oil and gas sector here in Brazil adds a vital aspect to the national economy.
“Prudent economic planning relies of course on an honest and robust assessment of the numbers, and spending projections that which allows a country to live within its means.
“The UK government is committed to promoting a successful North Sea sector. Because of the size and scale of the UK economy, we were able to use the last budget to announce new tax reliefs and guaranteed support for decommissioning costs. The certainty created by these measures is stimulating multi-billion pound investment in the North Sea’s future and jobs in Scotland now.
“These measures are ensuring that we get the most from the North Sea in the long term, even at a cost to the exchequer in short-term revenues.
Stressing the importance of clarity in the use of the revenue numbers, Moore added:
“But we need to be equally clear what this does not mean.
“It does not mean increased revenues now. It does not eradicate the economic challenge for smaller countries relying on volatile oil prices. It does not change the long-term fiscal outlook for Scotland.
“Both the Scottish and UK governments acknowledge the independent and robust figures produced by the OBR.
“Those figures show oil revenues falling so that from 2016-17 Scotland will run a deficit higher than the rest of the UK. That fact remains – and it is the very year that the Scottish Government wants independence.
“On the independence question, it is in everyone’s interests to debate the future on the basis of fact, not fantasy.
“Scotland could of course be independent, but the challenges that would come with leaving the UK family cannot be ducked.
“Scottish Government Ministers are right to acknowledge that the volatility of oil prices creates uncertainty in economic planning for smaller countries. They are right to acknowledge that falling oil revenues and an ageing population mean that an independent Scotland would face tough choices on tax, borrowing and funding for hospitals, pensions and defence at exactly the time they want Scotland to leave the UK.
“But they would also be right to acknowledge that by remaining within the UK family, Scotland has a government whose size allows it to absorb the volatility, create the conditions for investment offshore, and ensure that the industry continues to benefit Scotland in the years ahead. This is just one of the many ways in which Scotland and the whole UK family are stronger together.
“We need a clear and accurate understanding about the choices an independent Scotland would face, not a debate obscured by bluster and diversion. People in Scotland deserve no less.”