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New economic figures show danger of relying on volatile oil prices

March 6, 2013 10:43 AM
Originally published by Scottish Liberal Democrats

Commenting on the Scottish Government's latest GERs figures, whichWillie RennieWillie Rennie were released today, Scottish Liberal Democrat leader Willie Rennie MSP said:

"Even in the good years we're running a deficit of £7.6 billion, what would it be when the oil revenues drop?

"In a paper leaked this morning the SNP's own Finance Secretary admitted that an independent Scotland would face a growing deficit, threats to public spending and downplayed the prospect of an oil fund.

"These latest figures underline the folly of relying on such a volatile source of income. As part of the UK, Scotland shares the risks and rewards."

Secretary of State for Scotland, Michael Moore MP, added:

"The rise in oil revenues is welcome and shows that the UK's regulatory and tax regime is supporting the industry to get the most out of North Sea oil and gas. In the last Budget we announced a package of measures which will secure billions of pounds of extra investment in the UK Continental Shelf.

"While the sector is valuable to our country the past decade has shown that the price of oil can be extremely volatile from year to year. This underlying volatility can be much better managed inside the larger UK where oil and gas revenues represent a smaller percentage of overall tax revenues. Being part of a broader UK provides the stability and support that allows the industry to flourish.

"The GERs figures are also a reminder of just how important UK Government spending is in Scotland. In this year the UK Government spent more than £25 billion paying the pensions of our elderly, supporting those looking for work and protecting our national security."