Independent think-tank says Brit-Govt ‘squandered’ £500m N. Sea oil revenues on tax cuts instead of setting up UK sovereign wealth fund

Gillian Martin, MSP
Gillian Martin, MSP

A new report published today by an independent London-based think-tank has supported the SNP’s longstanding criticism of the Brit-Govt  ‘squandering’ North Sea oil revenues over decades and its failure to create a sovereign wealth fund for future generations.
 
The IPPR report draws comparisons with Alaska, Australia and Norway, which invested revenues from 1990 in a fund now worth over $1 trillion and states that “had the revenues from North Sea oil been invested in a <British> sovereign wealth fund in the 1980s, as happened in Norway, such a fund would have been worth over £500 billion today”.

Aberdeenshire East MSP Gillian Martin (SNP) who sits on Holyrood’s Economy Committee said: “This study is damning indictment of poor policymaking by successive Tory and Labour governments.

“While North Sea oil has raised significant revenues for the Treasury over 50 years, the Brit-Govt established “no mechanism . . . to ensure future generations could share in that windfall”, with their approach driving further inequality across the UK.
 
“It’s no great secret that oil and gas revenues have been mismanaged by successive UK government’s over decades – treating Scotland oil industry as a cash cow through the good years, but barely lifting a finger to help during the recent downturn.
 
“To put it in context, the Treasury has siphoned off some £600,000 per head of population here in the North East of Scotland while we’ve seen precious little in return.
 
“This report points to a £500 billion missed opportunity, but it’s also a stark warning that the UK government must not make the same mistakes again.
 
“With a steady oil price, the oil and gas sector is once again set on an upward trajectory. The revenues from such a valuable national resource cannot be put towards covering the cost of Tory tax cuts for the very richest in our society – they should be invested wisely for future generations.
 
“The best way to ensure that happens it to take these powers out of the hands of Westminster altogether – devolve them to Holyrood and let us properly steward, rather than squander, Scotland’s natural resources.”

The Institute for Public Policy Research (IPPR) is an independent charitable organisation with offices in London, Manchester and Edinburgh. Its full report can be viewed here:  https://www.ippr.org/files/2018-04/cej-our-common-wealth-march-2018.pdf 

5 Apr 2018

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