Oil outlook ‘roughly right’, says advisor

THE Scottish Government has got it “roughly right” with its higher estimates of oil and gas revenues in the coming years, a former economic adviser to the UK’s Scottish Office has said.

Professor Sir Donald MacKay, who also chaired Scottish Enterprise, said lower North Sea predictions from the UK economic watchdog the Office for Budget Responsibility (OBR) were “hope- lessly at sea.” The value of oil and gas reserves are at the heart of the independence debate and official figures yesterday showed revenues tumbled by £1.5 billion to just £4 billion in 2013/14.

The SNP Government had predicted double this. But Sir Donald today insists in a new analysis that revenues will be worth £31.4 billion in the five years to 2019 - twice the OBR estimate.

“I would

suggest

that

this

sce- nario is likely to pass the Keynesian test of being ‘roughly right’ while the OBR’s forecasts are likely to be ‘precisely wrong’ Sir Donald said in a letter to Alex Salmond.

“The OBR is hopelessly at sea when it comes to forecasting the price of oil.”

Mr Salmond said it shows the UK Treasury under-estimates the value of oil revenues and called on the No campaign to acknowledge ‘‘a bright future’’ for the sector.