Scotland reports 97 per cent plunge in oil revenues

A Scottish Saltire (centre) flies between a British Union flag (left) and an EU flag in front of the Scottish Parliament building in Edinburgh, Scotland, on June 27, 2016.
A Scottish Saltire (centre) flies between a British Union flag (left) and an EU flag in front of the Scottish Parliament building in Edinburgh, Scotland, on June 27, 2016.PHOTO: AFP

LONDON (AFP) - North Sea oil revenues for Scotland have plunged, according to official data out on Wednesday (Aug 24) that unionists said undermined the case for independence following Britain's vote to leave the European Union.

Revenues fell to £60 million (S$107 million) in the 2015-2016 financial year from £1.8 billion in the previous 12 months - a 97 per cent drop due to the dip in oil prices, the data showed.

Scotland's public deficit also rose to £14.8 billion, up from £14.3 billion in the 2014-2015 financial year.

"The lower oil price has, of course, reduced offshore revenues, with a corresponding impact on our fiscal position," Scottish First Minister Nicola Sturgeon said.

"However, Scotland's long-term economic success is now being directly threatened by the likely impact of Brexit," she added.

The Scottish government on Tuesday (Aug 23) warned of the heavy financial burden from Britain exiting the European Union, claiming an annual cost to the economy of up to £11.2 billion.

At the same time however, the cost could be much lower at £1.7 billion a year in lost gross domestic product (GDP) by 2030, it added in a statement.

"This paper shows, in the starkest possible terms, the potentially huge cost to Scotland of being taken out of the European Union and the single market," Sturgeon said.

"It is simply unacceptable that Scotland faces the prospect risk being dragged out of the EU against its will," she added.

Following the shock outcome of the June 23 referendum, Sturgeon earlier this month announced plans for increased infrastructure spending to boost the Scottish economy.

The devolved Scottish administration said it would invest an extra £100 million on health and other infrastructure projects in Scotland this year.

Prime Minister Theresa May must now decide when to activate Article 50, which formally triggers the country's departure from the European Union.

Sturgeon campaigned for Britain to stay in the European Union and has said she wants to preserve close EU ties even if Britain leaves, which could include a new bid for independence.

Scotland voted against separating from the rest of the United Kingdom in a 2014 referendum.