On the day that the IMF has downgraded the expected growth prospects for the UK this year from 0.2% to -0.4%, Norway’s oil fund has allowed it to boost spending on infrastructure in its draft budget yesterday.
The economic figures that show the UK economy is expected to shrink by 0.4% stand in stark contrast to the most recent figures for Norway, where growth this year expected to be a healthy 3.7% thanks in part to its oil fund which enables investment in infrastructure.
Spending in the Norwegian budget presented yesterday includes infrastructure projects to boost transport, schools and electronic communications and increased funding for hospitals and nursing homes.
Originally intended to last 30 years, Norway’s oil fund is now expected to last for a century or more and was recently reported as owning one percent of all equities across the globe. In 2010, Nobel Prize winning economist Josef Stiglitz said that it was “imperative” that an oil fund was established after the UK had “squandered” North Sea oil resources.
Commenting, SNP MSP Bruce Crawford who sits on the Finance Committee said:
“While Conservatives gather in Birmingham to pat themselves on the back for implementing Tory cuts across the board, out in the real world, the UK economy is going from bad to worse.
“This latest downgrade by the IMF is a damning indictment of the stubborn inaction that is the hallmark of George Osborne’s Treasury, in the face of overwhelming evidence and expert opinion.
“Even many of the economists who publicly backed his plans before the Tories took power have now openly called on him to invest in infrastructure, yet still George Osborne does nothing.
“Having a stubborn streak is no substitute for having a chancellor who actually understands the damage he is doing to the economy and to households the length and breadth of the country.
“While in the UK growth is anaemic as George Osborne refuses to invest in capital projects to get the economy moving, in Norway that capital investment is taking place thanks to their oil fund and growth is robust to say the least.
“I cannot think of a clearer demonstration of just how valuable and important it is to manage oil resources for the long-term rather than treating the sector as a cash-cow, in the way that successive Westminster governments have done.
“Instead of being dragged down by George Osborne, we need the powers of an independent Scotland so that our hands are no longer tied by a Tory chancellor who is determined to put his personal pride before the needs of people in Scotland.”