Clarke attacks SNP on oil forecast

Mar 21 2013

Former chancellor Ken Clarke has warned of the dangers of an economy based on oil revenues, as he attacked the SNP's predictions of a post-independence referendum North Sea boom.

Speaking in Edinburgh, the Conservative politician issued advice to the First Minister and the Scottish Finance Secretary not to "bet the ranch" on figures "pulled from the air".

His comments followed the publication of revised figures on North Sea oil and gas tax revenues by an independent economic forecaster.

Revenue will drop from £34 billion to £33 billion between 2012-13 and 2017-18, according to the independent Office for Budget Responsibility (OBR).

The change appears to leave an £8.5 billion gap between the OBR's revised figure and the Scottish Government's least optimistic estimate.

Commenting on the Scottish Government figures, Mr Clarke, the UK Minister without Portfolio, said: "I don't find them very convincing. Nobody believes that (oil) is an answer to our economic problems. If we were to have an independent Scotland, it is not the case that it would not somehow have to face up to the consequences of economic crisis."

Mr Clarke is also UK trade envoy for oil and gas, and is working to promote links between the UK and Brazil.

The North Sea is attracting a "very strong flow of investment" but revenues are hard to predict due to the volatility of the sector, he said.

The OBR figures are the best expert independent opinion, in his view. "My advice to Alex (Salmond) or (John) Swinney - if he agrees with (Mr Salmond) which I am not sure he does - is don't bet the ranch on a flow of oil revenues on figures which you seem to have pulled from the air," he said.

Mr Clarke went on to criticise other aspects of the SNP's vision for an independent Scotland. He said the Nationalists' plans to keep the pound and the Bank of England as Scotland's central bank requires "quite a lot of discussion and negotiation".