Tuesday, July 23, 2013

Scottish independence: Alex Salmond says Indy Scotland would have oil fund within a decade, 'slight' major problem emerges, onshore tax-revenues "would not be sufficient to match the current Scottish government spending" which is "well above the UK average".

Dear All

Have you ever noticed that the SNP likes using the word “expert”?

The reason is in my opinion why they have taken this route is that they haven’t done any of the work previously.

And if they keep saying expert all the time, it might somehow convince some people that they have got their act together.

Awhile ago the SNP formed an “expert” group on welfare, and the report was less than impressive, and we were all treated by the group going into hiding and cancelling a meeting MSPs at Holyrood.

Experts indeed, perhaps in hide and seek.

The latest group of “experts” is to be found in the expert commission to be established to examine how an independent Scotland can maximise the returns from North Sea oil and gas.

As a starter, there is a new paper on oil and gas which gives the broad strokes that the SNP administration will enact with plans for the industry if it secures independence.

So, we are back to the already tried and failed strategy of ‘its Scotland’s Oil’.

That strategy never worked before and it won’t work now!

Expect numbers like Billions of pounds to be floating about on a lake of spin as part of the nirvana effect which Alex Salmond is trying desperately to sell.

But give yourself a hard slap in the face, possibly several times, because you wouldn’t be getting any of the wealth directly in your pocket.


And don’t expect the price of petrol at the pump to drop either.


Nirvana, SNP nirvana is a pipe dream, it doesn’t exist.

So what are the facts?

The facts are, the SNP are making claims based on no details, Salmond is saying one thing in public and people like John Swinney are saying another in confidential papers.

The paper states:

"Given the industry's importance to Scotland's economy, Scottish ministers will shortly be announcing the creation of an expert commission to develop the proposals outlined in this paper. The Oil and Gas Expert Commission will build upon the approach and overarching principles set out in this paper, and provide advice on the technical application of the policy framework, which would underpin Scottish Government policy in an independent Scotland."

What does that mean?


Then there is said to be the creation of an Oil Fund like Norway, they started its oil fund in 1990 but it wasn’t till 1996 until they started transferring money.

Norway isn’t Scotland, and the reason the Norwegians can have such a fund is that they are high taxpayers.

Since the SNP are aware of that electorally, they would probably end up cutting services instead.

Even if there is an Oil Fund: it would be decades before the money (interest) could be siphoned off to make a real difference.

How long post set up could money be made available and for whom?

These questions and many others that show the lack of detail in the plans of Alex Salmond.

Salmond said:

"Almost all oil production and more than half of total gas production over the next three decades will take place in Scottish waters. And of course, only through independence would Scotland receive the tax revenues from this production. This paper restates the Scottish Government commitment to establish an oil fund when the fiscal conditions allow”.

“When the fiscal conditions allow”, that is so open ended, we all could be dead and buried before that is brought into force, so is this a commitment to a promise or a promise to a commitment? Either way, it looks remarkable like assumptions presented as fact, and we have clearly had enough of that from Alex Salmond and Nicola Sturgeon.

Then comes the standard grudge, grievance and malcontent from Salmond, its Westminster’s fault, he added:

"With Westminster having squandered the opportunities of the first half, it's up to us to make a better job of the second half. We will provide optimum conditions for the oil and gas industry to innovate and thrive in a globally competitive environment."

Does that mean the oil and gas industry paying less tax?

Or does it mean Salmond will invite people round for tea?

Although Scotland has oil, it isn’t the Saudi Arabia of the North, it is helpful, but given other real problems, the need for a balanced economy is just as important, Scotland doesn’t have an effective manufacturing base like Germany for example.

And then there is Scotland’s debt, in an independent Scotland that would have to be a priority before any talk of an Oil Fund could even be discussed.

Matters aren’t helped by the abject failure of Scottish Government, local Government and NGO reforms plus associated organisations in receipt of taxpayer funded income, that all needed to be dealt with.

Plans for that?


Liberal Democrat leader Willie Rennie said:

“Salmond is "conveniently ignoring the most basic economic truths that corporate profits and government tax revenue are two very different things. Alex Salmond should withdraw this disingenuous claim and explain the facts of why he believes Scotland would be better managing a volatile, declining and finite resource without the strength of the broad UK tax base behind it. When predicting oil revenues it's sensible to be cautious because it is such an unpredictable resource. But the Nationalists need to be reckless to make their sums add up. There is already a £23.9 billion black hole between the Nationalists' most optimistic figures and the Office for Budget Responsibility's more cautious estimate. That represents over two-thirds of the current Scottish Government budget. If the Nationalists don't want to use oil tax, which would represent a sixth of Scotland's tax take, to pay for public services they'd either have to cut services or increase taxes. That is the basic reality of their claims”.

So, do you want higher taxes or cuts to public services?

The reality is in my opinion that the SNP would bring in higher taxes and oversee sweeping cuts to public services.

Glasgow University-based Centre for Public Policy for the Regions (CPPR) doesn’t seem to be a believer in the Alex Salmond and Nicola Sturgeon nirvana dream; they have challenged the suggestion that oil would be a "bonus" for Scotland.

Alex Salmond is all about sucking up to the rich, and as much of North Sea activity is owned by international companies, the ordinary Scot won’t get a look in. The bottom line is that onshore tax-revenues "would not be sufficient to match the current Scottish government spending" which is "well above the UK average".

This is because, everything connected for a successful independence bid hasn’t been done, and continually refined over years.

The SNP has been in business for circa 80 years and during that time, it festered in grudge, grievance and malcontent, lately the leadership have benefited from the Scottish Parliament and done well at the trough.

If they were competent they would have done the work!

The kicker of this story is this would mean that no such revenues would be available to build up a Sovereign (Oil) Fund for some considerable time if at all.

Yours sincerely

George Laird
The Campaign for Human Rights at Glasgow University

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