Banner

  By Martin Kelly

Scotland will be able to contribute to an oil fund from the first day of independence, the Scottish Government has said.

This week will see the publication of figures showing the relative strength of Scotland's public finances over the past five years, and an updated forecast of an independent Scotland's public finances in 2016/17 extending these projections forward.

On Wednesday, a new paper will set out the scale of what the Scottish Government will argue is the economic bonus that could be achieved by using powers that are only available with independence.  The forecasts will show that under any scenario an independent Scotland will start life with strong public finances and that an independent Scottish government will have the option of starting to invest in an oil fund from 2016.

Over the past five years, when North Sea oil revenues are included, Scotland has on average accounted for 9.5 per cent of UK tax receipts – higher than our 8.4 per cent of the UK population.

On a per capita basis, annual tax receipts in Scotland have averaged £10,000 over the past five years, £1,200 per person higher than the UK as a whole.

In cash terms Scotland's relatively better fiscal position compared to the UK is estimated to have been worth £1,600 per person better off over the last 5 years.  Scotland is estimated to have paid more in tax per person to the UK in each of the last 33 years than the UK as a whole.

Speaking ahead of the publication, Finance Secretary John Swinney said:

"Scotland is one of the wealthiest countries in the world, more prosperous per head than the UK, France and Japan, but we need the powers of independence to ensure that wealth properly benefits everyone in our society.

"This week we will publish figures showing the strength of Scotland's public finances at the point of independence and the huge economic opportunity that a vote for independence will open up.

"The debate over Scotland's future is now firmly between those who choose to talk down Scotland's potential and those of us who know that with the wealth creating powers of independence we can take our natural resources and our human talent and build an even stronger nation."

The briefing will set out this relative strength and will also update the forecast of Scotland's finances in 2016/17, comparing this with the position in the UK, both under the current Westminster government's spending plans and those of the Westminster opposition. It will also set Scotland's public finances in an international context.

The paper, due to be published on Wednesday 28th May, will also set out the potential for the Scottish economy with access to the full powers of independence and quantify the 'independence bonus' that will be available to Scotland if those powers are used to grow our economy, improve productivity and achieve population growth.

First Minister Alex Salmond will also set out key steps to grow Scotland's economy with independence as part of the Scottish Government's public cabinet discussion which takes place in Rutherglen later this week.

Mr Swinney added: "There is no doubt Scotland can be independent. Over the last five years our financial position has been stronger than the rest of the UK by £1,600 per person and we are one of the wealthiest countries in the OECD.

"And there is no doubt that as part of the UK we have lost out on the very real benefits that an independent country could have secured. Westminster's decision to deprive Scotland of an oil fund has cost us £17,000 - £23,000.

"If we pursue the policies that only an independent Scotland will be able to pursue then we can deliver an oil fund from the point of independence and secure an economic bonus that can only be delivered by independence.

"The Norwegian Oil Fund began in the mid-1990s with only modest payments and is now the world's largest sovereign wealth fund, worth more than £500 billion – while Scotland's oil fund stands at zero, as a result of Westminster mismanagement of our resources.

"By taking decisions for ourselves we can give Scotland's economy the boost that is needed and that will never be delivered by Westminster.

"With independence we can use our new powers to grow productivity, to boost the numbers of people in work and the population of working age – particularly among women – to increase exports and to re-industrialise Scotland.

"Only with the choice of independence can we secure the benefits of Scotland's wealth for the people of Scotland."

Comments  

 
# NkosiEcosse 2014-05-25 04:40
This will send the heads spinning in Westminster, expect the ridiculous counter claims within a couple of days.
 
 
# Breeks 2014-05-25 06:15
Cue Better Together arguing the absurdity that we'd have to borrow in order to save.

Not true. A wealth fund holds the capital value of the original investment and pays out both a dividend and any appreciation (and depreciation) in the value of the asset. The faster you set up an oil and renewables fund, the faster you can offset its revenue against your borrowing. You then have an asset capable of sustaining itself and renewing its inherent value, thus sharing the burden of debt which your economy would have to bear alone.
Without a capital fund, all your 'investment' goes straight into someone else's business - typically some house of finance which contributes nothing to your economic vitality, whereas an oil fund could/would become a source of investment for progressive Scottish industry.

It is CRIMINAL incompetence that this has not been done, and billions upon billions of potential wealth squandered.
 
 
# Macart 2014-05-25 07:46
Not just criminal incompetence Breeks, but calculated premeditated theft and political betrayal.

The actions of government brought to light by both the release of Mr McCrone's original report and confirmed by Mr Healey in his Holyrood Magazine interview, more than adequately underline how successive governments viewed this resource and its political impact. There is no excuse, no mitigating circumstance which excuses the actions of successive UK governments. They lied to and stole from the electorate of their union partner. They did so with the aid of representatives we supplied ourselves and proceeded to squander billions.

There's nothing they could now say I would believe on pretty much any subject. It would presuppose I had trust in the veracity and intent of the source. Trust is earned and that's another precious resource they squandered.

holyrood.com/.../...
 
 
# hiorta 2014-05-25 06:47
It is CRIMINAL incompetence that this has not been done, and billions upon billions of potential wealth squandered" ..Breeks.

Spot on. But will they bring themselves to admit their culpability?

We simply MUST take full control of our own affairs.

If not, this will happen again and again.

As with all 'fair-weather friends', they will enthusiasticall y 'help us to spend' hoping we don't notice our wealth that they pocket, and will then rapidly vanish from view - especially if we might be in need.
 
 
# Nivy 2014-05-25 09:33
Now, when we have a YES Vote, we will be able to go for our Oil Fields in the Clyde, just south of Arran, which the Department of Defence has not allowed us to drill for, as it would interfer with there shipping I.e. there secret submarines !!!!
 
 
# bringiton 2014-05-25 12:37
Accordintg to that great expert on matters economic,Mr Al Darling,it is not possible to save and borrow at the same time.
Despite his difficulty with sums,if you pay less for borrowing than you are getting in return from savings then it makes sense.
Saving is an alien concept to anyone involved with the British state so I suppose we can excuse his ignorance.
The point about oil is that if you invest the money obtained (or some of it) wisely,then the actual value will increase over time (so long as you don't put it into a British bank that is).
Investment in renewable energy for example would bring a handsome divident in due course.
The point is that Scottish oil reserves are far more valuable to Scots when managed by Scots for Scots than when left to Westminster to squander on secret projects.
 
 
# hetty 2014-05-25 13:24
"And there is no doubt that as part of the UK we have lost out on the very real benefits that an independent country could have secured. Westminster's decision to deprive Scotland of an oil fund has cost us £17,000 - £23,000.

Is that per person? Hope so!
The thing is, many people still believe that the oil is nearly all gone and of course the industry has suffered at the hands of westminster more recently, regarding tax and the mishandling of the oil and gas industry as discussed in an article here on 28th April. I bet if it is a no vote, god forbid, the oil and gas industry would suddenly be handed huge concessions and be flowing like water for many years to come to line the pockets of the rich in London and the SE. We cannot let that happen. Friends do say 'ah but oil is dirty', I say to them, well yes, but would you rather use it as ethically as possible and invest, or have westminster continue to use and exploit the wealth, while the people of Scotland starve?
 
 
# gopher3 2014-05-25 15:05
If we vote NO, wait and see all the drilling licences issued to drill off the west coast of Scotland. All of a sudden the MOD will allow the exploration.
 
 
# UpSpake 2014-05-26 08:43
The BBC in Scotland, gurgling with delight at the thought of the establishment of 'new' institutions in Scotland post the independence vote likely to cost over 1 Billion - so what ?.
The prospect of starting an oil fund has to be set against a host of one-off non-recurring costs which a future Scots government will have to endure on our way to nationhood.
1 Billion is small beer and a price well worth paying to provide Scots with modern, efficient, well resourced departments of state that can and should push democracy to the lowest eschelons of governance in this country and allow communities a much bigger say in how they are governed.
Such an opportunity ought not to be overlaid by Commissions/Quango's/Une-elected bodies as is proposed in the White Paper. That prospect is frightening and will cost us all dear.
 

You must be logged-in in order to post a comment.

Banner

Donate to Newsnet Scotland

Banner

Latest Comments