Oil fund possible from independence Day-One, Scottish Government says


  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.”