Gordon Brown is the man who once promised us an end to boom and bust and then presided over the biggest bust in living memory. He made a promise to the Scottish people on a timetable for new powers for Scotland if there was a No vote, and then championed a petition saying that Westminster hadn’t delivered to his own timetable. Brown, who as UK Chancellor and then Prime Minister refused steadfastly to invest in a sovereign oil fund to help deal with volatility in oil prices, has today called for an oil fund to be set up to deal with the current volatility in oil prices.
The second thing that jumps out from the reporting is that all the channels are still wording the price drop in a way that makes it sound as if the oil price is still below $50.00 a barrel. Its not. Today it hit $62.58. Ok, so that’s not a great price nor is it long term sustainable for deep sea oil wells under the current tax regime, but it does represent +25% over the low and surely any appropriate reporting would mention that, just as they would if it had dropped a further 25%.
There absolutely should be an oil fund set up, a Scottish oil fund, and the fund’s main goal should be to invest in renewables and innovative energy solutions that will replace oil and gas as a driver for the North East and for Scotland’s economy over the next 40 years as the oil reserves do start to run out. The price will come back, so it’s short term help that is needed, but we also need to think longer term and a new policy approach based on stewardship rather than just seeing the North Sea as a cash cow is needed. Starting an oil fund now will look very clever in hindsight, indeed so would co-investing in oil fields going forward.
Gordon Brown isn’t a late convert to the idea of an oil fund, he simply wants to score some half credible soundbites and as always seems completely unaware that so many of his stated positions are completely contradictory.
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