By Bob Duncan
A new analysis of the role that oil & gas revenues have played in the Norwegian Government’s budget has blown a major hole in claims that an independent Scotland would be over-reliant on the oil & gas sector.
The figures – which were compiled by the Scottish Parliament’s Information Centre (SPICe) – show that in each of the last twelve years, the Norwegian Government has been significantly more reliant upon oil & gas revenues than an independent Scotland would have been.
Over the past 12 years, the oil and gas sector has made an average annual contribution to the Norwegian economy of 30.0%. The highest annual contribution over the period was 36.5% in 2005/6, while the lowest was 25.1% in 2001/2.
Conversely, over the same period, the oil and gas sector has made an average annual contribution to the Scottish economy of just 13.6%.
The highest annual contribution over the period was 21.3% in 2008/9, while the lowest was 9.7% in 2003/4.
This shows that the oil industry makes up from a quarter to over a third of the Norwegian tax revenues, while it contributed between 1 and 2 tenths of the total Scottish tax take.
Over the last 12 years, Norway was more than twice (2.2 times) as reliant on oil revenues as was Scotland.
Anti-independence politicians have repeatedly claimed that the size of the contribution made by oil & gas revenues to an independent Scotland’s budget would make Scotland over-reliant on the sector.
However, as can be seen from above, Norway has built an exceptionally robust economy while having a far greater reliance on the oil & gas sector than an independent Scotland would. The Norwegians have also managed to build up a $660 billion oil wealth fund which last quarter netted the nation $29 billion from stock market investments – which is around two thirds of Scotland’s annual block grant.
The analysis counters Unionist arguments that Scotland’s huge natural resources might cause long term problems due to fluctuation in oil prices. Currently Scotland is fiscally more wealthy than the rest of the UK and, if independent, would have a lower debt burden than if remaining in the Union.
The Scottish government has argued that the current cash surplus of £2.5 billion could be used to lower the debt and invest in key areas of the Scottish economy.
Commenting, SNP MSP Maureen Watt said:
“Anti-independence politicians have repeatedly tried to make bizarre claims that an independent Scotland having a major natural resource to call on is somehow a bad thing.
“Well if that’s the case then how do they explain the success of Norway which is significantly more reliant on its oil & gas resources than an independent Scotland would be?
“Norway benefits from their oil & gas revenues to a far greater degree than an independent Scotland would, and you would struggle to find anyone prepared to criticise the strength of their economy and society.
“The simple fact is that – as the recent Institute for Fiscal Studies report showed – with responsibility for managing our own resources, Scotland would be in a stronger financial position than the rest of the UK.
“There are up to 24 billion recoverable barrels of oil equivalent remaining in the North Sea with a wholesale value of over £1.5 trillion. That is more oil and gas tax revenue still to come out of the North Sea than has already been generated.
“That gives us a fantastic starting point from which to pursue the kind of policies that will grow Scotland’s economy, and build upon the progress that has been made by the Scottish Parliament.
“Only a Yes vote in 2014 will secure that opportunity for Scotland, and ensure that Scotland’s resources are used to build a lasting legacy that benefits all the people.”