Westminster Government says no to oil fund

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  By Anne-Marie O’Donnell
 
Energy secretary Ed Davey has given the strongest hint yet that the UK government has no plans to set up an oil fund after saying he didn’t think “it would be such a good idea” – despite previous senior political figures in recent months publicly lamenting a lost opportunity for Scotland’s oil revenues.
 
Mr Davey made the comments on the BBC’s Good Morning Scotland programme, prompting the SNP to warn that Westminster was on the brink of squandering 40 years’ worth of oil revenues should the UK Government policy continue.

SNP MSP Maureen Watt, who used to work in the oil and gas sector, pointed towards Norway’s oil fund – which is now worth around £470bn – as an example of what Scotland could be missing.

“As the Fiscal Commission has pointed out, of the 20 largest oil producing nations in the world, the vast majority have established savings funds,” said Ms Watt.  “It is only the UK and Iraq that have not. And Westminster has absolutely no intention of changing its ways, with UK Energy Secretary Ed Davey shamelessly telling BBC GMS this morning that he doesn’t think setting up an oil fund is ‘such a good idea’.  This is despite the fact more than half the value of the North Sea – with a wholesale value of up to £1.5 trillion – still remains.

“The Scottish Government is committed to making the most of these energy resources, with the First Minister today announcing £10.6m funding for a new Oil and Gas Innovation Centre based in Aberdeen.  This welcome investment will help support pioneering work in the industry.”

She continued: “In contrast, Westminster has downplayed the value of oil and squandered the revenues for more than 40 years. We cannot allow them to waste the next 40.”

Mr Davey’s comments came despite senior political figures admitting that a major opportunity was lost upon the discovery of North Sea oil in the 1970s.  In May last year, former Labour Chancellor of the Exchequer Denis Healy admitted that the Labour government “underplayed” the value of the oil because of the “threat of nationalism”.

In a candid interview with Holyrood magazine, Healy said the current UK government was “worried stiff” that the independence referendum this autumn would return a Yes vote, adding that Scotland could “survive perfectly well economically” as an independent country.

Just a month later, in an interview with the same magazine, former Liberal Party leader David Steel said that Westminster made a “major strategic error” in failing to set up an oil fund in the 1970s.  Then, in November last year, former Labour leader Lord Kinnock spoke of his regret that Labour had not set up a Norway-style oil fund and blasted a “prodigious waste of oil revenues” by Margaret Thatcher’s Conservative government.

Mr Davey expressed his oil fund views as both the Scottish and Westminster governments held separate meetings in the north-east of Scotland on Monday.

Ms Watt added:  “As the two cabinets meet in the North East, we only have to look across the water to Norway to see how our oil revenue could – and should – have been used.  Oil was discovered in the waters of both countries around about the same time, but while Norway now has an oil fund worth £470bn, Scotland has been left with nothing as a result of successive years of Westminster squander and mismanagement.

“The UK Government does not deserve another chance – only a Yes vote in September can allow us to establish an oil fund and reap the rewards we have so long missed out on.”