Salmond is ‘ducking from painful choices’

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Scotland’s First Minister is being unfair to voters in the independence referendum by “promising milk and honey” when he should be spelling out the “painful choices a separate Scotland would have to make”, a leading UK Government Minister has claimed.

Danny Alexander, Chief Secretary to the Treasury, said with voting in the crucial ballot now only weeks away that Alex Salmond is “still making plans based on untold oil wealth beyond anything independent forecasters consider plausible”.

He was speaking after the UK Office for Budget Responsibility (OBR) revised down the amount of cash it expects to be raised from North Sea oil and gas revenues.

Chairman Robert Chote revealed the independent body is now forecasting revenues of £61.6 bn will be raised between 2013/14 and 2040/41 – down from £82.2 bn.

The First Minister has already dismissed the OBR’s figures as ‘’stuff and nonsense’’.

But in a letter to the SNP leader, Mr Alexander said: “This stage in the referendum campaign should be about presenting the people of Scotland with the facts about what separation would mean. Instead you persist in offering a fantastical picture of a separate Scotland’s public finances.”

The Scottish government argues the OBR forecasts are based on a ‘’very low estimate of future total production’’.

It has already published higher forecasts for oil and gas income, saying this could be between £2.9bn and £7.8bn in 2016/17 – the first year of an independent Scotland if there is a Yes vote in September.

It further predicts revenues could then amount to £34.3bn over the next five years – equal to almost £7bn a year.

But Mr Alexander insisted the revisions by the OBR made Scottish Government forecasts “look even more incredible”.

He said: “It is clear to every independent expert that there is no boom in oil revenues on the way, and because extraction is expected to become more expensive, we have to be realistic about tax revenue projections.

“Your unrealistic oil forecasts lead to implausible expectations of a separate Scotland’s fiscal position.”

He added: “This is unfair to the electorate. It is incredible that so close to the referendum you are still promising milk and honey when you should be laying out the real facts about the painful choices a separate Scotland would have to make.”

Professor Sir Donald MacKay, a founding director of an oil operating company who is also a former economic adviser to the Secretary of State for Scotland, insisted, though that the OBR forecasts “stand in stark contrast to the views of those who have lived with the oil industry over many years”.

“Unless the oil price falls out of bed in the next two years, the tax revenue accruing will be much higher than that estimated by the OBR.”

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