“The case for independence has been swallowed up by a £14bn North Sea black hole.”

This quote from unionists in 2016 was based on a fall of 97% in tax revenues from North Sea Oil from £1.8bn in 2015 to £60m in 201. This dismissive attitude toward what contribution the North Sea could ever make to the finances of an independent Scotland has been repeated and compounded by increased deficits due to measures to cope with Covid. Budget balances over the last five years is shown in the table.

Clearly, Scotland runs a larger budget deficit proportionally than does the the UK. The is unionist case that oil makes little difference to this holds true for the years up to 2019-20. And GERS figures for 2021-22, to be released in August will be similar.

Companies operating in the North Sea pay three profit-related taxes on oil and gas: ring fence corporation tax, supplementary charge, and petroleum revenue tax (PRT).

Russia’s war on Ukraine has hit Western economies in unanticipated ways. From a level around $40 a barrel in 2016, Brent crude has ben selling around $100 a barrel since April and boosting BP profits to $8bn for the quarter. Other than slapping a windfall tax on this in July, Westminster has been coy about its own windfall, not least because it would transform Scotland’s balance into healthy positive territory. This transformation is shown on the chart:

UK Treasury was set to collect £12bn this year before windfall tax added £5bn more. Only 90% of this £17bn lies in Scottish waters, But this still wipes out the deficit, leaving a £2-3bn surplus. Which explodes the myth North Sea is finished.

#1035—341 words