Scotland politics

Scottish independence: MSPs urge SNP government to give oil fund detail

Opposition parties have called on the Scottish government to give greater detail about its plans for an oil fund in the event of independence.

The plea came in a Holyrood debate about the oil and gas industry.

The SNP would like to see the fund set up to provide a revenue stream for future generations of Scots.

During the debate, Labour's Rhoda Grant questioned whether a new tax would be levied on the industry post-independence.

She said it was important to provide greater clarity in order to allow companies to make plans in the run up to the independence referendum in autumn 2014.

Ms Grant wanted to know if the fund would be financed by top-slicing existing taxation or levying more taxes on the oil industry.

She told the chamber: "It is really unclear whether or not this will be top-sliced from existing taxation, and if indeed the levels of taxation will remain comparable to the rest of the UK, or whether this will be a new tax levied on industry.

"It is, therefore, important that the Scottish government is clear about what their regime for oil and gas will be should Scotland leave the UK.

"While they pursue their goal of independence, they have to ensure that during this campaign and the period of uncertainty that the industry has clarity to enable them to continue to develop.

"What might the fiscal regime for decommissioning be in an independent Scotland?"

Ms Grant also wanted to know if decommissioning contracts entered into by the UK government would be honoured in Scotland if it were no longer part of the UK.

She believed that failure to answer the questions would cause instability and hinder development.

Energy minister Fergus Ewing said Scotland would honour its responsibilities in respect of decommissioning.

He added: "As far as taxation is concerned, we recognise that stability and predictability are absolutely key.

"The worst possible thing is to see any repetition of the tax hike that the industry faced, without any warning, in 2011 of an additional 12% supplementary petroleum tax."

The chamber also heard Conservative MSP Mary Scanlon accuse ministers of "misinformation" by inflating the value of future oil reserves.

Ms Scanlon said: "So, the amount of oil in the North Sea still to be extracted remains the same, the price of oil falls by 10 dollars a barrel over the 11-month period, yet the first minister claims that last year's trillion worth of oil is now worth one and a half trillion."

Alex Salmond said last year that there were 24 billion barrels of oil left in the North Sea worth more than £1tn.

This month the value was described as £1.5tn based on the same number of barrels.

A spokesperson for the first minister later said that estimates of future oil revenues varied widely and that the government's projections were updated to reflect the latest figures.

The spokesperson defended the £1.5tn figure as a reasonable and moderate estimate."

Meanwhile, in his contribution to the debate, Liberal Democrat MSP Tavish Scott expressed concerns about the future of maintenance in the industry.

He added that there was the need for "constant engineering, the constant re-investment and the constant attention" to oil and gas platforms which are now up to 40 years old.

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