HMMM...THAT'S A HARD ONE IAIN

I can see, of course, where the confusion arises. 

A Christmas fund is set up so that one can buy things for Christmas; a holiday fund is set up with the express aim of paying for a holiday; a pension fund for the provision of a pension. So it may have been a wee bit difficult for the Subway man to get his head around the idea that the purpose of an oil fund was not, in fact, set up with the express intention of one day purchasing oil.

You see, Iain, we already have oil. We've no need to buy it.

Bless him, his spell out of the front line hasn't really improved him any. Still Nicola is always ready to explain this sort of thing to slow pupils. 

Norway's that long thin country up there, on the right hand side...

THIS, YOU SEE, IS THE KIND OF MESS YOU GET WHEN A COUNTRY THAT IS TOO WEE, TOO POOR AND TOO STUPID, TAKES CONTROL OF ITS OWN AFFAIRS

(Apologies. I have no idea what happened to the formatting.) 

I've just been reading a post at WOS which points out the difference in the economic situations between Scotland and Norway.

As Stuart points out, Norway has a slightly smaller population, a more northerly aspect, a more challenging climate and topography, but it discovered oil in approximately the same quantities as we did, at the same time. Now, 40 years or so later, it has an embarrassment of wealth, while our standard of living is dropping like a stone. 

They are independent but the sun still shines

The Norwegian Ministry of Finance forecasts that the global (petroleum) fund will reach NOK 4.3 trillion or £458,616,144,000 by the end of 2014 and NOK 6 trillion (£639,632,000,000) by the end of 2019.  In a parliamentary white paper in April 2011 the Norwegian Ministry of Finance forecast that the 2030 value of the fund would be NOK 7.4 trillion (£831,521,600,000). Eight hundred and thirty one and a half billion pounds.

 

Roads without potholes

As I understand it, the Scottish or British fund stands at £0.0.

 

They have churches too

Additionally, the Government Pension Fund in Norway manages the state social security money, a fund to pay pensions and benefits. This fund is managed by a separate board and separate government entity from the petroleum fund. The Government Pension Fund – Norway had a value of NOK 106.9 billion at the end of 2006 (the latest figures I can find). That is for a population of 4.7 million £11,161,058,000). 

 

Bergen

As I understand it, the equivalent fund in the UK (population 62 million) stands at £0. Pensions and social security are paid from current taxation, which of course is why they have to be pruned back at the moment. In fact as the poor earn less and pay less tax and the rich find ways to avoid tax, it appears our social security fund is being financed by borrowing.

Now I'm not suggesting that everything in Norway is perfection, but just glancing at another set of figures I note that the absolute poverty rate in Norway is quoted at 1.7% of the population, where in the UK it is quoted as 8.7%.  

Oslo

Why?

Because they had sensible government which took the vast wealth that oil gave to them, and invested it in bringing the country's infrastructure up to date and then investing the surplus in funds spread over the world against the day that the oil runs out or the price drops or someone discovers new ways to fuel civilization. 

Coastal Road

The unpredictability  of a natural resource like oil is a favourite of the British government and the No Chance Campaign when belittling the Scottish economy, but strangely we have seen little in the way of preparedness from Westminster over the years. When the oil runs out, or ceases to have value, Britain will, alone in the oil producing nations of the world, nothing.

LET'S NOT WASTE THE ONE CHANCE WE WILL GET

Once again I am indebted to "Arbroath" for pointing me in the direction of a Scotsman article which is worthy of a read. Not often I can say that!

Of course we are all aware of the difference between the standard of living in Norway and that in Scotland, but somehow when it is laid out in print (particularly in a newspaper with an editorial policy that would have us believe that membership of the UK holds the best future for Scotland), it knocks it home.

For me it is a feeling of frustration and anger at the opportunities we have missed to be like our Nordic neighbours, to whom, it seem, I feel more closely related, than I do to London, which I have always felt was pleasantly "abroad". London has much more in common with Paris than it does with Edinburgh... the temperature, kind of natural vegetation, insect life and the lifestyle of the population seems quite alien to one who lives in a cool sub-Nordic climate zone. In contrast Edinburgh and Oslo have much more in common than Edinburgh and London.

We had the same possibilities as Norway, but instead of following the sensible government style of a small and relatively unimportant (in world terms) northern state, which both Scotland and Norway are, the UK used the oil bonanza to deal with massive problems built up because of poor government in the 70s, and to pay for Thatcher's devastation of industry in the 80s. 

The UK simply will not lie down and accept that it is not, and can no longer afford to be, a world power. Its power came from how widespread its empire was (and from the vast monies accrued from the exploitation of that empire's resources). That empire now consists of a few scattered islands, which cost the UK more money than they bring in ...but of course are handy for hiding vast wealth from the taxman, and must be kept at all costs!

Oil wealth has also been squandered on the nuclear race. Since the late forties when Britain was snubbed by America because it did not have its own nuclear programme, vast amounts of our taxes have been diverted to ensure that we obtain weapons of mass destruction, which we cannot ever use (not least because the Americans do not trust us with the firing codes).

Successive prime minsters from Winston Churchill and Harold McMillan to Tony Blair and David Cameron have spent money that might have been saved, or at least spent on our crumbled infrastructure, on this vanity project, because it was more important to them that the UK remain a permanent member of the Security Council, than that old people have heat and kids have schools... or even worse in some ways, that soldiers they send to war on behalf of this quest to remain important, have equipment that works.

One of Cameron's reasons for Scotland stay in the union, as articulated in his Edinburgh speech, was that we "punch above our weight in military terms"... Wow, I'm impressed, but the roads are full of potholes. A recent "No" campaign leaflet pointed out that the UK has well over 200 embassies abroad. Wow again. I'm overwhelmed, but, just what does having an embassy in Côte D'Ivoire do for me? Wouldn't it be better if aged relative (and one day me) didn't have to stay in bed in the winter to stay warm?

The UK's mad privatisations policy meant that, when we finally did set up a state oil company (following the Norwegian example) it lasted a few years in public ownership, was sold off into private ownership, as was Mrs Thatcher's wont, and shortly afterwards bought by BP... Big business wins again. 'Twas ever thus!

Norway now has an oil fund of £330 billion. Scotland on the other hand, has an oil fund of £0.

With 59 MPs at Westminster out of a total of 650, even supposing we could get them to talk for Scotland instead of for their various bosses in London, we wouldn't get anywhere with the notion of an oil fund, despite us being the only oil rich country, or region of a country, in the West that doesn't have one.

Well, it's never too late. In 2014 we can, for the first time, make sure that our politicians speak for us. 

Let's not waste it.

DARK LOCHNAGAR: THE UK HAS SQUANDERED SCOTLAND'S OIL WEALTH-JOSEF STIGLITZ

DARK LOCHNAGAR: THE UK HAS SQUANDERED SCOTLAND'S OIL WEALTH-JOSEF STIGLITZ

You just have to look at this post. It's 3 minutes of your life well spent.

Good news on the oil front

Only three months after the find of an approximate 300 million barrels of oil in Scottish waters, a further 100 million barrels has been discovered by German firm Wintershall.

At today’s prices the latest find would equate to something in the region of $7billion of a boost to the Scottish economy. Added to the $21 billion in May, that makes a tidy wee sum which could easily be salted away as an oil fund...

Prof. Josef Stiglitz has called for an Oil Fund. The Nobel Prize winner and former Chief Economist of the World Bank, said on BBC Scotland’s Newsnight programme last Tuesday that the UK had “squandered" its oil wealth and that it is now "imperative" an oil fund be established to secure the wealth that remains under the North Sea for future generations.

Fat chance! When oil was first discovered in the North Sea in the late 1970s, the details of how much there was, and how much money was involved were deliberately hidden from the British and especially the Scottish people by the Labour government. It was feared that knowledge of the potential wealth in Scottish waters would encourage the Scots to ditch the union in favour of the life style now enjoyed by Norwegians, a lifestyle which might be described as being from an altogether different planet.

Mrs Thatcher failed to correct Labour’s criminality. Instead of investing in the run down industry that was rife in the north of England and the central belt of Scotland, as for example the Germans have done with their eastern länders (without the benefit of oil), Mrs Thatcher used the oil money to support a vast unemployment programme whilst converting Britain to a service economy which made nothing but money. Insurance and banking, tourism and popular culture. In the mean time vast numbers of people in Scotland were dumped on the dole.

And as the unemployment figures rose, she ordered that people be transferred to the more secretive Sickness and Invalidity Benefits which were supposed to be for people incapable of work (as opposed to those who had become an embarrassment to the government).

Messrs Blair and Brown used the oil money to help fund war wherever they could find it. So the money from our oil wealth was used for anything but making our country comfortable.

I am forever hearing of an oil fund in this or that country. Vast amounts of money put away in the good times to help support the country in the future. It’s happened in Norway where there is over $500 billion of wealth in a country of 4 million people, making them the richest folks in the world at $117,000+ per person in a bank account... and they are only just over the water from us. Amazingly Scotland produces almost the same amount of oil as Norway, and yet not a penny piece has been put into a fund.

Funds exist in feudal states. Sensible and prudent government from the likes of Saudi Arabia, Kuwait, the Gulf Emirates, countries in which there is little if any democracy. And even when a state is not totally independent, like Alaska and in Canada, the federal government has still seen to it that oil funds are set up for these states.

Scotland must the only country (or if you want it province) which found oil and got poorer.

We really have to insist that with these finds the Scottish government be allowed to set up a fund for the future of the Scottish economy when oil has dried up. To do anything else is criminal lunacy... and we have already had 30 years of that.