Willie Rennie on Newsnight Scotland: You have to be cautious when you predict oil revenues

There’s been a bit of a stooshie over future North Sea oil revenues in the last week or so. First, as the BBC tells us, a leaked draft of a Scottish Government report said that volatility in projecting revenues created uncertainty and could lead to spending cuts. Now, Alex Salmond tells us that it’ll all be fine and there’ll be a great big oil boom just as Scotland becomes independent. The SNP projections for the first year of independence are pretty much double what the OBR predicts.

Scottish Liberal Democrat leader Willie Rennie went on Newsnight Scotland on Monday night to talk about how the SNP were all at sea over this. He said:

What is quite remarkable is that last week John Swinney says there was a high degree of uncertainty because of the volatility of the price of oil. Now Alex Salmond says there’s little doubt there was going to be an oil boom.

How can you go from uncertainty to little doubt in the space of a week? Oil revenues are uncertain and unpredictable and that’s why it’s right to be cautious.

The oil revenues we receive pay for hospitals, schools, universities. If you took the lowest and highest figures in recent years, there’s a difference of £11 billion. That’s the entire health budget in Scotland.

If you look at Norway, often cited by the SNP as a great example to follow, they take a very cautious approach to this.

You can watch his whole interview here.

* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings

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2 Comments

  • This debate of course links to the concept of a ‘natural Resources trap’. As Summarised in the EI Sourcebook (on Good-fit practice activities in the international oil, gas and mining industries) it is

    the paradox that exists in natural resource rich economies. It is well documented that the discovery of natural resources significantly reduces growth

    http://www.eisourcebook.org/561_CollierTheNaturalResourceTrap.html

  • Robin Bennett 14th Mar '13 - 12:22pm

    Willie ‘s responses on issues relevant to the referendum are becoming too two-dimensional. He could, while advancing the case for caution, have acknowledged that other forecasts are more optimistic than the OBR (as indicated by Professor Kemp, whose interview followed), and that, in the end, voters will be entitled to take a view.

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