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An oil fund for Scotland

30/07/2009

An oil fund would secure billions of pounds of benefits for Scots now and in the future, John Swinney said today.

The Scottish Government has today published a new discussion paper - a strand of the National Conversation - which sets out options for a Scottish oil fund which would invest a share of present oil revenues to leave a lasting legacy for future generations.

Adjusted for inflation, £230 billion of tax revenue has come directly from Scottish waters over the past 30 years. The paper presents a range of models on how annual or one-off investments could provide a sustainable income to support the economy and seeks views on the best model for Scotland.

Finance Secretary John Swinney said:

"Scotland has immense natural energy resources. Alongside our burgeoning renewables industry, estimates suggest there are 25 billion barrels of oil and gas in the North Sea, worth hundreds of billions of pounds, still to be recovered.

"I believe there are clear merits in establishing an oil fund to provide permanent wealth long after our oil and gas reserves are gone.

"Investing a portion of revenues in an oil fund could provide greater stability, protect the economy and support the transition to a low carbon economy. Without any burden on the oil and gas industry, that means benefits for Scots today and crucially, it means Scots in the future will reap the benefits of a finite resource.

"Norway's oil fund is worth over £200 billion and Alaska uses a proportion of its oil fund to pay an annual dividend to its citizens, worth an average of over £1,000 each year in the past decade. The UK is practically alone among major oil and gas producers in not having an oil fund, despite an oil fund enjoying the support of previous UK Energy Ministers. The UK Government has without doubt wasted billions of pounds of Scottish North Sea revenue.

"Devolving control of North Sea taxation and production to the Scottish Parliament would allow us to enhance and maximise the competitive advantage of the oil and gas industry, increase even further its worldwide reach and ensure oil and gas resources provide a sustainable and lasting benefit for this country.

"An oil fund is strongly in Scotland's long-term economic interest and the UK Government can no longer oppose the people of Scotland enjoying the oil legacy they are entitled to."