Danny Alexander
Danny Alexander said the SNP's estimates on future revenues from North Sea oil extraction are 'fantastical' and 'unrealistic'Reuters

The Treasury has attacked what it says are "fantastical" estimates for North Sea oil and gas production made by the Scottish National Party in its campaign for an independent Scotland.

It follows a report by the Office for Budget Responsibility (OBR) which slashed its forecasts for UK tax receipts from the North Sea energy resources by a quarter, to £40bn between 2019/20 and 2040/41.

Scotland faces a referendum on independence in September 2014. The SNP claims that Scotland would be better off out of the UK and cites North Sea production as a significant source of wealth for the country.

But Danny Alexander, chief secretary of the UK Treasury, said in a letter to SNP leader Alex Salmond that on the eve of the referendum "you are still making plans based on untold oil wealth beyond anything independent forecasters consider plausible".

"This stage in the referendum campaign should be about presenting the people of Scotland with the facts about what separation would mean," Alexander wrote

"Instead, you persist in offering a fantastical picture of a separate Scotland's public finances."

Alexander said the SNP had over-estimated revenues from the North Sea by £5bn in the 2012/13 and 2013/14 years.

And off the back of the OBR's latest forecasts, Alexander said the SNP's North Sea revenue predictions were £12bn higher than they would be in the first three years of an independent Scotland.

"It is clear to every independent expert that there is no boom in oil revenues on the way, and because extraction is expected to become more expensive, we have to be realistic about tax revenue projections," wrote Alexander.

"Your unrealistic oil forecasts lead to implausible expectations of a separate Scotland's fiscal position. All the independent forecasts show that a separate Scotland's deficit will be more than double the UK's, yet you proposed to saddle people in Scotland with even more borrowing and debt.

"This is unfair to the electorate – it is incredible that so close to the referendum you are still promising milk and honey when you should be laying out the real facts about the painful choices a separate Scotland would have to make."

Responding to the OBR forecasts, which the independent fiscal watchdog acknowledged are "are highly uncertain", the SNP said they rely on production estimates well below industry projections.

The SNP also highlighted comments from Professor Sir Donald MacKay, a former chairman of Scottish Enterprise, former economic adviser to the secretary of state for Scotland and chairman of the Scottish Mortgage Trust.

Mackay wrote reports on North Sea oil during the 1970s. He said that "if Danny 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".