North Sea Revenue Stats Rekindle Brexit Passions

Scotland’s geographical share of UK North Sea petroleum revenues increased to £208mn in the tax year 2016/17 (ending 5 April 2017), from £56mn in the preceding year, the UK government said August 23.

Importantly, oil and gas revenues (taxes and licence fees) from both Scottish and English waters in the North Sea are paid to the UK-wide government.

The latter added that UK-wide revenues were only £84mn in 2016/17, adding that the reason for Scottish revenues being higher than UK-wide ones was due to the allocation of tax relief on petroleum relief tax-paying fields, 40% of which are based in English waters.

The data were highlighted in a UK government release highlighting that, at -8.3% of Gross Domestic Product (£13.3bn), Scotland’s deficit is more than three times higher than that of the UK (-2.4%).

Scottish Secretary David Mundell said: "These figures from the Scottish Government are a cause for concern, and show clearly there is still much to be done to improve Scotland’s economy. They also highlight the value of pooling and sharing resources around the UK. ...that’s one reason the people of Scotland clearly rejected Nicola Sturgeon’s plan for a second independence referendum at the [June 2017 UK national] election."

Acknowledging the lower oil price dented North Sea revenues in 2015-16, Scotland's first minister Nicola Sturgeon however said: “Scotland’s economy remains strong. In the last quarter, our economy grew nearly four times faster than the UK and the number of people in employment is at a record high."

Scottish finance secretary Derek Mackay added: "Our long-term economic success is now threatened by Brexit, which risks reducing household incomes, employment and funding for public services. That is why we continue to press for the Scottish government to have a direct role in Brexit negotiations.”

Scots voted by 55% in favour, with 45% against, of staying in the UK in a referendum held in September 2014; a majority of Scots voted to remain in the European Union in mid-2016 but were bound by that UK-wide referendum result which was 52% for leaving the European Union, with 48% against.

Westminster politicians have argued that, had Scotland voted for independence in 2014, the oil price crash would have crippled its economy in 2016. However, had Scotland voted for independence on March 1 1979, many there believe its economy would be more like Norway's today -- with a substantial sovereign wealth fund built up over decades from petroleum revenues.

Mark Smedley