Andrew Whitaker | The Scotsman
INDEPENDENCE could leave Scotland facing tougher choices on public spending than the rest of the UK in the longer term, a leading think tank warns today.
• Study suggests choices facing an independent Scotland on spending may be starker than rest of UK on public spending
• Higher public spending may not be sustainable as oil and gas revenues fluctuate, according to fiscal body
A study from the Institute for Fiscal Studies (IFS) concludes that if North Sea oil and gas revenues were allocated on a geographical basis, then in the short term the “outlook for an independent Scotland looks as if it might be no more uncomfortable than that for the UK as a whole”.
But the report highlights the higher spending on public services north of the Border and the volatility of oil and gas revenues, and warns: “In the longer term, the choices may be starker.”
The report also warns that Scotland’s higher spend on frontline public services than the UK as a whole “may not be sustainable” under independence.
Read the full news article at The Scotsman online or read the Institute for Fiscal Studies full report
An independent Scotland could not afford to pay its welfare bill without cutting services or raising taxes, the UK Work and Pensions Secretary has said.
Speaking before an address in Glasgow, Conservative minister Iain Duncan Smith said a break-up of the Union would leave Scotland unable to meet the cost of getting people into employment or adequately supporting those who cannot work.
Mr Duncan Smith is to deliver a speech on the UK Government’s controversial welfare reform plans. He will discuss the impact of the proposed universal credit system and is expected to touch on the independence debate.
Welfare spending is 6% higher north of the border, he said, and warned that North Sea oil and gas revenues would not meet the costs.
“Due to the reliance on the old heavy industries in many parts of the country, it makes perfect sense that we need to spend more money per head of population on welfare support in Scotland. I have no problem with that,” he said.
Read more at The Scotsman online
More referendum news
FIRST Minister Alex Salmond yesterday unveiled a blueprint for the future of Scotland’s oil and gas industry, aimed at driving forward the recovery of an estimated £1.5 trillion in reserves locked in the North Sea.
The move came as the industry received a boost with the announcement that the Kuwait government’s Foreign Petroleum Exploration Company (KUFPEC) is to take a 35 per cent stake in EnQuest’s Alma and Galia oilfield developments in the North Sea in a deal worth £300 million.
Nizar Al-Adsani, chairman, said “In keeping with KUFPEC’s strategic objective to acquire quality production and reserves, we are pleased to re-enter the North Sea through EnQuest’s Alma and Galia project. ”
The news was welcomed by Chief Secretary to the Treasury Danny Alexander, who said: “This is good news for North-east Scotland and the whole of the UK. At the Budget, the government set out ambitious measures to stimulate billions of pounds of new investment in the North Sea, increasing production and creating jobs. Today’s deal between EnQuest and KUFPEC proves that the UK continental shelf remains an attractive prospect.”
Read the full article at The Scotsman website
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Frank Urqhart | The Scotsman
FOUR in ten companies operating in the North Sea are concerned about the potential impact of the independence referendum on their investment plans.
A report by Aberdeen and Grampian Chamber of Commerce included a question on whether the referendum planned for 2014 and its possible consequences was “a factor in future plans and investment proposals”.
A total of 39 per cent of firms surveyed said it was, 56 per cent said no and 5 per cent did not answer. The study said the responses were “inconclusive” and the issue would be explored further.
Read full article here
The Tories have warned that an independent Scotland would be “over-reliant” on oil and gas.
A study by think-tank Centre for Public Policy for Regions (CPPR) found that, excluding the extraction of North Sea oil and gas, in 2011 the Scottish economy grew at 0.5 per cent, half the rate seen for the UK (1 per cent).
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