ONE of Scotland's most respected economists has questioned the UK Treasury's oil and gas forecasts, arguing that Westminster's calculations are ill-informed and "wide of the mark".

The extent of Scotland's future energy revenues has become a key battleground in the independence debate.

Professor Sir Donald Mackay, a former chairman of Scottish Enterprise who advises Reform Scotland, a think-tank, said voters have been left confused by a welter of conflicting claims.

He says there is no hole in the Scottish government's oil predictions, as Danny Alexander, chief secretary to the Treasury, has claimed.

In a column written for this weekend's Sunday Times online, Mackay says there is evidence of a recovery in output over the next few years. This will be fuelled by North Sea investors enjoying 100% first year capital allowances against present business revenues. "Both rising output and a falling tax rate will result in rising tax revenues, provided
"Mackay says there is evidence of a recovery in output over the next few years. This will be fuelled by North Sea investors enjoying 100% first year capital allowances against present business revenues.

'Both rising output and a falling tax rate will result in rising tax revenues, provided of course that the oil price does not fall out of bed.'

Mackay points to official forecasts by Oil & Gas UK which suggest an independent Scotland's revenues in 2017-19 would be almost £32bn, double the £15.8bn forecast by the Office for Budget Responsibility.

The OBR forecast implies that an independent Scotland, on a geographical share (90%) of UK oil and gas revenue in 2016-17 and 2018-19, would receive £15.8bn in tax revenues.

'Assuming DECC [Department of Energy and Climate Change] prices this would rise to £28.1bn,' says Mackay. 'Inserting the Oil & Gas UK production forecast raises this to £31.8bn.

If Danny [Alexander] looks at this he might conclude there is no hole in the Scottish government's oil predictions but there is a mountain of black gold missing from his.'"