Error strewn Chancellor can't be trusted
George Osborne has come under fire as once again claims made by the Chancellor during a trip to Scotland quickly began to unravel.
A report published by the Chancellor today claimed that estimates that there remains £1.5 trillion worth of oil & gas revenues by wholesale value in Scotland’s waters is an ‘overestimate’ by the Scottish Government. In fact, the figure is based on estimates by industry body UK Oil & Gas which are also used in the UK Government’s own oil & gas strategy document and indeed are more conservative than the DECC’s estimates. The report also incorrectly claims the figure is based on applying oil prices to both oil & gas revenues, something that is simply not true.
In an interview this morning Mr Osborne claimed that oil revenues went from £2 billion to £12 billion in the space of a ‘couple’ of years. In fact, this increase in revenues took place over a thirteen year period.
On a previous visit to Scotland, George Osborne had claimed that investment in Scotland was being damaged by the referendum. In fact, even the UK Government’s own statistics showed that inward investment in Scotland has increased at a higher rate than the UK as a whole, to one of the highest levels on record.
And after basing earlier press releases this week on claims of a “border effect” the Treasury’s own report accepts that these are over stated.
Commenting, SNP MSP Mark McDonald said:
“Just like his budget it seems claims made by George Osborne have unravelled just hours after they were made.
“The Chancellor does nothing for his credibility when he comes to Scotland and attacks figures used by his own Government and makes claims that simply do not stand up to any kind of scrutiny.
“This isn’t the first time that George Osborne has gotten his facts embarrassingly wrong in Scotland and it clearly shows he cannot be trusted.
“He previously told us foreign investment was being put off by the independence referendum – then it turned out that inward investment is at one of the highest levels on record.
“But nobody knows better the reality of George Osborne’s economic mismanagement than the oil & gas industry, who have not forgotten the hugely damaging tax raid that George Osborne launched on the sector with no warning whatsoever.
“The Chancellor can try all he likes to make a virtue out of the embarrassing U-turn he was forced into, but people working in the industry know that it is absolute hypocrisy on his part.
“With Westminster having shown such an appalling track record of managing the oil & gas sector, it takes a huge amount of brass neck for George Osborne to tell people in the sector that he knows best when it comes to managing the industry.
“The fact of the matter is that the mismanagement of successive Westminster Governments has shown why Scotland needs to be able to make our own decisions when it comes to oil & gas, so that the industry is managed on a sustainable, long-term basis for the benefit of people in Scotland.”
P118 of today’s Treasury paper reads:
C4. The difference between the two numbers is unlikely to be solely due to the effect of a border, with other unobservable characteristics creating the discrepancy (see below). Furthermore, it is likely to overestimate the effect of the creation of a border between Scotland and the rest of the UK especially in the short term. This is a result of the fact that the historical ties create hysteresis effects within the trade flows. As such, any estimates presented in this paper should be considered long term estimates of the potential effect on the flow of goods and labour.