Bloomberg News

Scotland to Suffer More Than U.K. on Oil Output Drop, Study Says

December 20, 2012

An independent Scotland would be worse off than the rest of the U.K. by 2015-2016 as a result of North Sea oil and gas production and taxes falling faster than forecast, according to the Centre for Public Policy for Regions.

Scotland was better off than the U.K. in the year ended March 31 based on the country getting 90 percent of oil taxes, the Glasgow-based researcher said in an e-mailed statement. Scotland and the U.K. will have similar fiscal balances for the next three years, the report said.

Independence is the flagship policy of the Scottish National Party, which runs the semi-autonomous government in Edinburgh. Scottish Finance Secretary John Swinney said earlier this year that Scotland’s financial position would enable to it to ease the austerity measures introduced in the U.K.

That claim will only be true for one year, the CPPR said. After then the positions would be similar and the U.K. would be in a better position to ease austerity further ahead, it said.

The estimates are based on the Office for Budget Responsibility’s latest forecasts for oil and gas production and revenues. The U.K. body said it expects hydrocarbon revenue between now and 2016-2017 to decline by 37 percent. Its forecast of 7.3 billion pounds ($11.9 billion) for the current year is 24 percent lower than a March forecast of 9.6 billion pounds.

The CPPR was set up in 2004 at Strathclyde University to provide commentary and research on Scotland’s public policy and financial position.

To contact the reporter on this story: Peter Woodifield in Edinburgh at

To contact the editor responsible for this story: Rodney Jefferson at

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