UK's international credit rating would be under pressure without
Scotland's oil and gas

Scottish independence: UK depends on Scotland to cut deficit

A new report has shown that Scotland's oil and gas sector boosted the UK balance of payments by £40bn. When the £6bn proceeds from the industry's supply chain are included the total would have doubled the UK's balance of payments' deficit.

The SNP has welcomed the publication of the latest 2012 economic report from Oil & Gas UK presenting it as evidence that there is considerable attraction for the rest of the UK if an independent Scotland were to form a new 'sterling zone' with the other nations.

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The Nationalists cited the news that Scotland's oil and gas sector was responsible for £17 billion in tax and national insurance revenues which went to the UK Treasury this year as underlining their case.

Retaining Sterling as Scotland's currency is SNP policy, and so are keen to emphasise the value a currency union with an independent Scotland would hold for the other member nations.

However, with the UK deficit rocketing and with the Libor scandal enveloping the Westminister-City axis of bankers, politicians and regulators the SNP is coming under pressure to explain why they are not arguing for an independent currency and regulatory framework.

The oil figures show that with the bulk of the UK’s offshore industry sited in waters off Scotland’s coast, the UK would face a substantial reduction to its balance of payments.

This surplus would make an independent Scotland's currency stronger against a weakening sterling which raises the question of what benefit is there for an independent Scotland subsidising a currency which today will be diluted by another £50bn of quantitative easing from a central bank (Bank of England) currently implicated in the Libor scandal?

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