The publication of the latest 2012 economic report from Oil & Gas UK has been hailed as clearly demonstrating the value to the rest of the UK that a currency union with an independent Scotland would hold.
The report makes clear that the oil & gas industry boosted the UK’s balance of payments by £40 billion, with the supply chain adding a further £6 billion in exports of goods and services.
The loss of the industry would have doubled the UK’s balance of payments deficit. Additionally, the industry was responsible for £17 billion in tax and national insurance revenues which went to the UK Treasury this year.
With the bulk of the UK’s offshore industry sited in waters off Scotland’s coast, the UK would face a substantial reduction to its balance of payments if it failed to agree upon the creation of a sterling-zone with an independent Scotland.
Commenting on the report, SNP MSP Maureen Watt said:
“As this report makes clear, the oil industry is a massive part of both Scotland and the UK’s economy, contributing almost 25 percent of corporation tax receipts in the last financial year.
“It employs almost half a million people across the UK, with a significant number in my own constituency.
“Therefore, it is important that the UK and Scottish Governments work to support the sector, not treat it as a short term cash cow as the Tory-Lib Dem coalition did with their disastrous cash raid in last year’s Budget which saw production plummet by a fifth.
“The report makes clear the importance of certainty and predictability in the tax regime faced by the industry. That is something that Danny Alexander and the UK Treasury have simply failed to provide.”
On the impact of an independent Scotland on a sterling zone’s balance of payments, SNP MSP Mark McDonald added:
“These figures should put to bed once and for all the ludicrous idea that creating a sterling-zone after independence would not be desirable to the remaining parts of the UK.
“If the UK failed to reach an agreement on creating a currency union, it would be staring down the consequences of a massive hit to its balance of payments.
“Failing to reach agreement or putting obstacles in place is in nobody’s interests, which is what makes the development of a currency union after Scotland becomes independent a sensible and desirable course of action for everyone.”
The report also contained criticisms of the UK Government’s tax policy and called for a change to the current regime.
Oil and Gus UK’s Chief Executive Malcolm Webb said the Treasury would gain from changes with new jobs and an extra £5 billion investment in the sector.
He said: “The problem is, there are a number of other, what we call, fiscally tax stranded investments out there at the moment that won’t go ahead unless they get those sanctions.
“The numbers are quite impressive, if we get the right incentives in place, we can have £5bn in extra investment.”