David Cameron and his Cabinet colleagues are in Aberdeen today explaining that Westminster believes an independent Scotland couldn’t realise the potential of the oil industry unless it stays in the UK.
This proposition is absurd, and most Scots will see why. The idea that a small oil rich nation such as Norway or the United Arab Emirates can run its own oil industry successfully, but that Scotland can’t, is ridiculous. No other government suggests that a major and valuable natural asset is actually a burden on the economy, even in the case of Norway where is represents a much larger size of the economy than Scotland. Yet this is the case being made by the Tory-led No Campaign in Aberdeen as David Cameron suggests that North Sea oil is profitable for Westminster but a problem for Scotland.
Westminster would rather keep Scotland’s resources
North Sea oil – responsible for a quarter of the UK’s total corporation tax – remains of huge value. Since its discovery, it has raised £300 billion to date for the UK Exchequer. No wonder the Cabinet is desperate to keep hold of it. Although Scotland’s oil fields may be past their peak, the rising price of oil means that what is left is worth considerably more than £300 billion in revenue. This figure does not include the oil reserves west of Shetland or the possibility of finding oil in the Clyde basin, where exploration is currently banned by the MOD in case it interferes with the operations of its nuclear submarines.
No business or accountant would consider such a massive long term natural asset a burden. Westminster, however, has to misrepresent the issue in case Scottish voters catch on that an independent Scotland would be in a better financial position than the UK.
Every Norwegian is now a millionaire
Any suggestion that oil is a problem would bring roars of laughter across the dinner tables of Oslo. In 2013 the Norwegian oil wealth fund reached a surplus of $828 billion – helping Norway to become the richest country in the world. This is enough to make every Norwegian a millionaire. Few are complaining.
Oil nations across the world have benefited from establishing similar investment funds. Only 2 nations have failed to do so: Iraq under Saddam Hussein and the United Kingdom.
Westminster has squandered North Sea revenue
The UK’s North Sea legacy was summed up in 3 words by Larry Elliot: “discovered, extracted, squandered”. Former Chancellor Dennis Healey conceded that North Sea wealth has been squandered by Westminster and even Alistair Darling admitted this was an error.
An independent Scotland is best placed to support the North Sea sector
A generation of oil wealth has flowed through Aberdeen – yet despite a booming energy sector, the city needs food-banks to feed its poorest residents. In September 2014 we should ask who is best placed to create economic opportunities and social gains from the second half of the oil revenues? Those who have already failed, or an independent Scotland with an energy headquarters in Aberdeen?
Westminster has caused instability
This failure has been continuous over the long term. There have been 16 fiscal and tax changes in the North Sea by UK Governments in the past 10 years. All the evidence suggests that it has been mismanagement from Westminster which has caused instability in the North Sea sector.
As Malcolm West of Oil and Gas UK said at the time of George Osborne’s tax raid,
“We’ve had three massive tax hits in the last nine years; that just cannot go on, andit’s given this country a terrible reputation for fiscal instability.” (February, 2012)
The future of North Sea oil is strong
The oil remaining in the North Sea is worth over £1 trillion at wholesale value. There are at least 15-24 billion barrels of oil remaining which will continue long into the 21st century. Over 90% of the tax revenue will go to an independent Scotland which can help to establish a national oil fund for future investment.
Business for Scotland explained the potential for a West coast oil boom that is currently blocked by Westminster. Independence could revitalise the economies of Ayrshire and the Strathclyde region as a whole. Most oil price forecasts are upward, with one of the exceptions being the UK Government’s OBR which has a political motivation to underestimate oil revenue. Alastair Darling MP of the No Campaign has described the OBR as an extension of the UK Treasury.
This is an evidence-based wake up call for the independence debate. Scotland has been continuously misled over the value of its natural resources and its economic ability to succeed as an independent country. Today, leading Westminster politicians repeat this claim, suggesting that a source of great wealth is a burden if the tax is collected in Scotland rather than London.
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