It is not too late for Scotland to establish an oil fund. Clearly this should have been done earlier on and then Scotland (or even the UK) might have had national savings similar to Norway’s £300 billion. Even states or provinces like Alaska and Alberta have established such wealth funds despite not being independent countries.
Instead successive UK governments have squandered the oil wealth from the North Sea. Some 40 billion barrels of oil equivalent have been extracted from the North Sea, creating huge revenues for the UK Exchequer. But this money has been squandered on the wars in Iraq and Afghanistan as well as on nuclear weapons.
Even if there is less than than half the oil left in the North Sea, oil’s value has risen and is likely to rise further as world demand increases. So we still have a very valuable asset left. Therefore, the question remains: will we put some of these revenues aside as savings for a rainy day, or will we continue to spend, spend, spend?
This is also linked in to the wider question of borrowing and saving. For too long our government and our companies have borrowed far too much. Individuals too have been encouraged by the banks and successive London governments to borrow as much as they can. But in the long term this was never sustainable. And the chickens have come home to roost in the banking crisis and recession. Whatever we do as a society, we must not go back to borrowing at the levels we were doing before. We should be saving in the good times and putting money aside for the tough times which will inevitably come. This applies to national governments, corporations, and individuals as well.
Norway is an excellent example of this prudent approach. The sonner Scotland can break away from this profligate UK and return to our more cautious roots, the better.
And finally we have to look at interest rates. The current low rates may be good for borrowers but they are no good for thousands of small savers. John Mason has met many folk in the East End of Glasgow who have modest savings and the interest used to be a useful part of their annual income. But now the interest is virtually nil. Maybe the banks should be forced to pay a minimum decent level of interest to encourage more saving.
