Oil legacy demand as Norway rakes in £69bn

Published on Friday 5 March 2010 21:49

THE long-running controversy over SNP demands for a Scottish oil fund to reap the revenue benefits of North Sea reserves was reignited last night.

The debate flared again following revelations that the Norwegian government's oil wealth fund had posted a 25.6 per cent return on investment last year – the fund's best ever performance.

Norges Bank reported that the fund gained $103.4 billion (about 68.7bn) on investments, a record since the fund was set up in 1996.

Finance secretary John Swinney launched a discussion paper last summer on proposals for a Scottish oil fund to create a "lasting legacy" of wealth from North Sea oil.

It claimed that Scotland had lost out on 230bn of tax revenue which had flooded in to the Treasury from oil and gas installations in Scottish territorial waters over the past 30 years.

And he said yesterday the record figures reported for the Norwegian fund served to underline the SNP's case for an oil fund to benefit Scotland.

Mr Swinney said: "This is a powerful illustration of the need for Scotland to gain the full powers of independence, and access to our own resources.

"The Norwegian oil fund started at a modest scale little more than a decade ago, and is now one of the biggest capital funds in the world, benefiting Norway as a long-term fund virtually forever – in good times and in bad. The lesson for Scotland is clear.

"We know that 50bn of North Sea oil revenues is due to flow to the London exchequer over the coming six years – more than during the previous six, and 10bn up on the Treasury's previous forecast – and it is high time that Scotland secured long-term benefit from our resources in the same way as Norway is."

However, Scottish Secretary Jim Murphy accused the Scottish Government of "extraordinary exaggeration" over the value of North Sea oil to the economy, claiming that it accounted for only 1.5 to 2.5 per cent of revenues to the UK Treasury.

In a letter to Mr Swinney, Mr Murphy said the SNP had attempted to "misinterpret and misrepresent" Scotland's stand-alone economic position.

Mr Murphy said: "Government revenues have not exceeded expenditure in Scotland since the mid-1980s."

He added it was an exaggeration to say oil and gas revenues had kept the Treasury afloat.

He said: "The fact that Scotland has benefited to the tune of 76bn since devolution, I know, for some people, is an inconvenient truth.

"But Scotland is stronger and better off as a fundamental part of the UK both in times of prosperity and, especially so, during the present economic hard times."