29 May 2008
The Crewe and Nantwich Bye Election delivered a timely blow to New Labour south of the Border. One paper put it down to the three Fs…finance, fuel and food. Readers of the Ross-shire Journal know how our pay packets strain to pay for fuel at the pumps, the weekly shopping and the VAT you pay on top of the petroleum taxes for your car or public transport.
The SNP at Holyrood and in London and Brussels care deeply. That’s why the Scottish Government has published new figures which show that the UK Treasury would now get at least £4 billion in extra revenues from oil and gas this year, given the rise in oil price since the Budget.
In Budget 2008, HM Treasury forecast that North Sea revenues would contribute £9.9 billion to the UK Exchequer in 2008/09. These figures were based on an oil price of $83.8 per barrel. The current oil price is over $130 per barrel for North Sea Brent crude. Based on average oil and gas prices in 2008/09 to date, the Scottish Government estimate that North Sea revenue are set to be over £4 billion higher than the Treasury forecast.
Since the start of April 2008, Brent Crude has averaged $114/barrel whilst Natural Gas has averaged 60p/therm. If prices remained at this level for the whole of 2008/09 this is estimated to yield an additional £4.3 billion in revenue for the UK Exchequer compared to the forecasts made at Budget 2008.
The forecast £14 billion - £15 billion in oil revenues this year comes on top of revenues between 1976/77 and 2007/08 of £249 billion in real terms. Thanks to a report by Grant Thornton last week we know that at current oil prices Scotland would have a budget surplus of between £4.4 billion and £6.2 billion.
That’s why the Scottish Government and Parliament must have access to revenues from North Sea oil and gas, including the £4 billion windfall, to enable the Scottish Government to provide much needed relief from high fuel prices for motorists, especially in rural Scotland, hauliers and industries including the fishing and farming sectors.
The SNP has urged the UK government to introduce a road fuel regulator that would use windfall VAT revenues on petrol and diesel to moderate price increases at the pump. This call has been rejected by the UK government, and their failure adds weight to the argument that the Scottish Government should now be given the ability to act in the interests of the people of Scotland.
I have been speaking in Holyrood on issues vital to Ross-shire this week. Firstly on climate change, which plays its part in making food prices dearer and in many parts of the world unusually severe drought is already killing millions while we’ve welcomed a few dry weeks in the Highland. We must consciously use less of the world’s scarce resources. Don’t waste so much food, use the car for more essential journeys, don’t forget that moderating our behaviour now will cost less later.
Secondly, the Common Agriculture Policy has supported farming and crofting here for decades. By 2013 it could be ended. So the future of beef and sheep production which has such fine traditions here needs continued support in this Less Favoured Area. We have to demand Scottish meat in the supermarkets. Labelling Scottish meat is improving, but how many of us go for the cheapest without a thought for home producers and food security? Serious thoughts, but we are elected by you to deal with the big issues.