SNP economist admits Alex Salmond was wrong about independence oil 'bonus' claim

Simon Johnson
Alex Salmond claimed North Sea oil would be a 'bonus' rather than the 'basis' of a separate Scotland's economy - Jeff J Mitchell

Alex Salmond has been urged to admit he misled voters during the 2014 independence referendum after the head of an SNP commission rejected his boast that oil revenues would have been a “bonus” rather than a necessity.

Andrew Wilson, a former SNP MSP and RBS economist, said that North Sea revenues had formed part of the “basis” of a separate Scotland’s finances rather than being an additional windfall as Mr Salmond repeatedly claimed.

He said that the commission, which has been charged by Nicola Sturgeon with building a credible economic case for independence, is assuming that the North Sea would produce zero tax revenues if she won a second referendum.

Unionist parties challenged the former First Minister to finally “own up” that he had misled Scots. Mr Salmond and Ms Sturgeon predicted a second oil boom and their White Paper forecast between £6.8 billion and £7.9 billion of revenues in the first year of independence.

The former First Minister claimed that North Sea revenues would be a “bonus” for a separate Scotland because there would be enough money from other sources to fund public spending. He said there would be additional sums that could be diverted into an oil fund.

However, even in 2014, when the oil price was more than $100 per barrel, Scotland had a significant annual deficit. This has since grown to £15 billion, proportionally more than double the UK figure and even higher than Greece’s.

Murdo Fraser, the Scottish Tories’ Shadow Finance Minister, said: “The full scale of Alex Salmond's bluster and evasion in the 2014 referendum campaign is finally being exposed.

“Mr Salmond has never admitted he tried to mislead people on oil during the 2014 referendum. Now that even his own SNP colleagues are owning up, it is time he did so himself.”

He challenged the Nationalists to spell out which taxes they would increase and public services they would cut to close the deficit in a separate Scotland.

Jackie Baillie, Scottish Labour’s economy spokesman, said her party “warned time and again during the 2014 referendum about the SNP’s rose-tinted fantasy of an independent Scotland’s finances.”

She added: “Time and again we were told we were talking Scotland down. But now the SNP’s own economics guru has admitted promises of a land of milk and honey were a figment of Alex Salmond’s imagination.”

Alex Salmond said North Sea oil would be a bonus for a separate Scotland's economy - Credit: PA

Ms Sturgeon appointed Mr Wilson’s commission to examine how the deficit could be reduced if Scotland’s sluggish economic growth rate was increased.

The former RBS economist told the BBC: “I think people – if one was critical of the 2014 campaign – you know, for example, they would argue that oil was a bonus and not the basis, but we did have oil baked into the numbers and it was indeed a basis."

He added: “So I can say with some certainty in terms of our own work that we'll assume for the purposes of our projections that oil is producing zero revenues and therefore treat any revenues that we get from oil as a proper windfall to be used on intergenerational projects rather than spent on spending today."

He said he did not think a second independence campaign would explicitly be arguing that there would be "short-term pain but long-term gain" following a Yes vote.

But he argued that oil was not a “particularly helpful argument” for the Nationalists to make as it suggests there is a “free lunch and that we won't have to work.”

Mr Wilson argued it was “imperative” that a separate Scotland retains full access to both the UK and EU single markets. However, constitutional experts have warned it would have to choose between them after Brexit.

An SNP spokesman said: “Instead of rejoicing in the downturn affecting the North sea oil industry and the jobs affected by it, the Scottish Tories should be lobbying for support for the industry in this week’s UK Budget. 

“The North Sea industry will be an important one for years to come, but the biggest threat to Scotland’s prosperity, jobs and livelihoods comes from a Tory hard Brexit, which threatens to take us off an economic cliff edge.”

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