Bill Jamieson: Oil on SNP’s untroubled waters

The North Sea has earned billions but is unlikely to be a secure financial basis for an independent Scotland. Picture: PA

Plunging prices and falling revenues fail to derail Nationalists’ confidence in the North Sea, writes Bill Jamieson

BY ALMOST every reckoning the plunge in the price of oil and the mounting cutbacks in revenues, jobs and investment should by now have done for the SNP.

For 40 years North Sea oil and its gushing fortunes fuelled the renaissance of Scottish confidence and aspiration. But all that stood to be dealt a killer blow this time last year – not with the independence referendum defeat but with the onset of a steep decline in the price of oil.

The price of Brent crude has plunged from $115 a barrel last spring, to just $49, having grazed $42 ten days ago, defying expert opinion of a “stabilisation” at $80, then a “floor” at $60.

The repercussions are already inflicting pain. Oil & Gas UK, the industry lobby group, reports this week that the decline has already cost more than 5,500 jobs directly and stripped out 65,000 jobs across the wider services and supply sector.

Yet to this collapse in fortunes Scottish voters have reacted with insouciance. Support for the SNP is stronger than ever. Polls consistently point to another stunning advance for the party in the Holyrood election next May.

Yesterday brought a new poll, hailed by the SNP as “sensational”, showing the party’s support standing at 58 per cent after eight years in government – and showing a majority support for independence when Don’t Knows are removed.

The TNS poll shows SNP support on the constituency ballot for next year’s Scottish Parliament election stands at 58 per cent – 35 points ahead of Labour. On the regional ballot, SNP support stands at 51 per cent – with Labour 27 points behind.

For a political movement that drew support from the battle cry “It’s Oor Oil”, this dramatic collapse in North Sea fortunes seems to have made no difference whatever to its electoral appeal or the confidence of Scots in their economic future.

The grisly figures of retrenchment and decline pass unnoticed. Output has halved since 2007. This year is set to see an estimated £800 million (8 per cent) of cost slashing, with a further £1.3 billion planned for 2016.

Capital expenditure, which peaked at £14.8bn in 2014, is expected to fall to £11bn this year, much of that large projects which had already begun. After that, it could fall by between £2bn and £4bn in the next three years, with a stark warning that spending on fixed assets could fall to almost nothing by the end of 2017.