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| Version 2 | Version 3 |
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| Scottish independence: Questions raised over oil fund | Scottish independence: Questions raised over oil fund |
| (35 minutes later) | |
| Scottish ministers were warned by their own economic advisers that plans for an oil fund under independence may require tax rises or spending cuts. | Scottish ministers were warned by their own economic advisers that plans for an oil fund under independence may require tax rises or spending cuts. |
| The advice, written for the government in March last year, has now been published under freedom of information laws by the Daily Mail newspaper. | The advice, written for the government in March last year, has now been published under freedom of information laws by the Daily Mail newspaper. |
| Pro-Union campaigners said it showed there was a "deception" of the public. | Pro-Union campaigners said it showed there was a "deception" of the public. |
| But the Scottish government said the advice had been overtaken by events. | But the Scottish government said the advice had been overtaken by events. |
| The published advice said an independent Scotland would have to raise taxes, cut services or borrow to create the fund. | The published advice said an independent Scotland would have to raise taxes, cut services or borrow to create the fund. |
| It also said Scotland could have paid off its debts 30 years ago if it been independent and with oil revenues. | It also said Scotland could have paid off its debts 30 years ago if it been independent and with oil revenues. |
| It calculated the tax surpluses of the 1980s could have been set aside to create a Norwegian-style of oil fund which would have been worth £117bn by 2011. | It calculated the tax surpluses of the 1980s could have been set aside to create a Norwegian-style of oil fund which would have been worth £117bn by 2011. |
| The emergence of the report led to stormy exchanges during first minister's questions at the Scottish Parliament, where Labour leader Johann Lamont accused Alex Salmond of trying to hide the full truth of the issue. | The emergence of the report led to stormy exchanges during first minister's questions at the Scottish Parliament, where Labour leader Johann Lamont accused Alex Salmond of trying to hide the full truth of the issue. |
| But Mr Salmond said recommendations published last week by the Scottish government's fiscal commission working group set out a scenario where, under independence, money could be put into two separate oil funds without spending and taxation changes. | But Mr Salmond said recommendations published last week by the Scottish government's fiscal commission working group set out a scenario where, under independence, money could be put into two separate oil funds without spending and taxation changes. |
| One fund would help stabilise finances as revenue fluctuates, while the other would be a long term investment fund, similar to the large one built up with oil funds in Norway. | One fund would help stabilise finances as revenue fluctuates, while the other would be a long term investment fund, similar to the large one built up with oil funds in Norway. |
| Finance Secretary John Swinney highlighted the option of starting up the fund as soon as independence is achieved. | Finance Secretary John Swinney highlighted the option of starting up the fund as soon as independence is achieved. |
| He cited advice from the Scottish government's fiscal commission that it could start paying into it from 2017-18. | |
| But the advice prepared by the office of the Scottish government's chief economic adviser which emerged from the freedom of information request said that might be a costly option. | But the advice prepared by the office of the Scottish government's chief economic adviser which emerged from the freedom of information request said that might be a costly option. |
| It warned Scotland's public finances have been in surplus only one year between 1990 and 2011. That was 2000-01. | It warned Scotland's public finances have been in surplus only one year between 1990 and 2011. That was 2000-01. |
| In the paper, signed off by Simon Fuller, it stated: "This suggests that over this period North Sea receipts would have been required to fund public services in Scotland. | In the paper, signed off by Simon Fuller, it stated: "This suggests that over this period North Sea receipts would have been required to fund public services in Scotland. |
| "Therefore if the Scottish government had wished to establish an oil fund, it would have had to reduce public spending, increase taxation or increase public sector borrowing." | "Therefore if the Scottish government had wished to establish an oil fund, it would have had to reduce public spending, increase taxation or increase public sector borrowing." |
| The economists calculated that was likely to lose money. Their reckoning was based on a comparison of Britain's borrowing costs, averaging 4.4% between 2000 and 2011, with the returns achieved by Norway's oil fund, which were an average 4.1%. | The economists calculated that was likely to lose money. Their reckoning was based on a comparison of Britain's borrowing costs, averaging 4.4% between 2000 and 2011, with the returns achieved by Norway's oil fund, which were an average 4.1%. |
| The advisers also warned ministers that any future surpluses would face political pressure for a boost to spending rather than putting them into an oil fund, and that it would be politically difficult to take the longer term option. | The advisers also warned ministers that any future surpluses would face political pressure for a boost to spending rather than putting them into an oil fund, and that it would be politically difficult to take the longer term option. |
| The advice stated: "This is not straight-forward. Current needs and demands on the public finances are typically more clearly defined than future needs". | The advice stated: "This is not straight-forward. Current needs and demands on the public finances are typically more clearly defined than future needs". |
| Alistair Darling, of the Better Together campaign, said ministers' public claims were not backed by their private advice. | Alistair Darling, of the Better Together campaign, said ministers' public claims were not backed by their private advice. |
| "Last week they said they could set up an oil fund at no cost," he said. "It is now clear that their own private advice says there would need to be tax rises, spending cuts or more borrowing - or all three. The SNP have quite deliberately set out to deceive the Scottish public. | "Last week they said they could set up an oil fund at no cost," he said. "It is now clear that their own private advice says there would need to be tax rises, spending cuts or more borrowing - or all three. The SNP have quite deliberately set out to deceive the Scottish public. |
| "This internal SNP paper also confirms that, in all but one of the last 20 years, all the oil money has been spent on public services in Scotland, yet SNP ministers tell us it's just a bonus and not the basis of our economy". | "This internal SNP paper also confirms that, in all but one of the last 20 years, all the oil money has been spent on public services in Scotland, yet SNP ministers tell us it's just a bonus and not the basis of our economy". |
| A Scottish government spokesman, said: "These papers confirm exactly what we have said on this issue. As the Finance Secretary has said, the assumption that Scotland would have to run an absolute surplus before investing in an oil savings fund 'has been reflected in the Scottish Government's early thinking on the subject'. | |
| "A key question which the Fiscal Commission's report addresses is the point at which Scotland could start investing into a savings fund. | "A key question which the Fiscal Commission's report addresses is the point at which Scotland could start investing into a savings fund. |
| "The Commission is clear that there is a compelling case for starting to make early investments into an oil fund whilst in deficit so long as it is manageable and debt is on a downward path." | "The Commission is clear that there is a compelling case for starting to make early investments into an oil fund whilst in deficit so long as it is manageable and debt is on a downward path." |