The UK Labour Party’s finance spokesman Ed Balls has claimed that the slump in the price of world oil prices has shown it was right for Scotland to have voted ‘No’ in the Independence referendum.
Oil prices – including that of the benchmark North Sea Brent crude – began sliding in summer 2014 and continued to slump before, and after, the referendum vote, trading yesterday at around $55-barrel compared to around twice that last year.
Balls said the falling oil price underlines the ‘importance of Scotland rejecting independence’, as he fights to prevent forecast losses to the SNP at this year’s UK election.
But Balls, who is bidding to replace the Conservative Party’s George Osborne as chancellor of the exchequer after May’s vote, backs plans to transfer more powers to the Scottish Parliament. He also reiterated the importance of what he called a “pooling and sharing of risk.”
He said: “It’s very important that we as politicians make the argument that we can devolve power in Scotland, and also make the case that what we’re seeing with the oil price, and its impact shared across the UK is a really good example of why we need the union,”
The key economic pillar of the Scottish National Party’s campaign for independence ahead of last year’s referendum on leaving the 307-year-old Union with England was North Sea oil revenue, with 15% of tax receipts coming from the industry. Since then vote, the price of Brent crude has fallen by a quarter.
The main UK parties were accused of scaremongering by the SNP over the currency, economy and pensions. In the month of the vote, Cameron, Labour leader Ed Miliband and Liberal Democrat Nick Clegg headed to Scotland after polls showed the outcome was too close to call.
With 1.6 million voters embracing independence, they scrambled to shore up support for the union, promising Scotland further devolution, including full powers over income tax, to keep the nation in the UK.
But – despite most Scots supporting devolution of oil and gas taxation to Holyrood – this power is being retained in Westminster.
Independence would have resulted in higher cuts to public services in Scotland and tax increases, Balls said. Nevertheless he also said Scotland’s referendum showed the need for positive campaigning.
Balls added: “The lesson I draw from Scotland in last few months is you need a positive argument as well as a negative argument. I think we can win the positive case for the future as well as the negative.”
For the SNP, MSP Mike Mackenzie – who is also a member of the Scottish Parliament’s Energy Committee – commented: “Oil is a bonus, not the basis of Scotland’s economy, and will be a fantastic asset for Scotland for decades to come, with as much in value still to come as has already be extracted.
“Politicians of all sides should be coming together to support the industry which has too often been subject to wildly fluctuating taxation from successive Westminster governments – who have been more interested in using the North Sea as a cash cow than in supporting it.”