‘UK should have created oil fund’ says Darling

ALISTAIR Darling has acknowledged that the UK should have invested its North Sea oil bounty for future generations, but warned voters that remaining reserves cannot be both “spent and saved” by future governments.

Former Chancellor Alistair Darling. Picture: Julie Bull

Asked yesterday about Norway’s decision to save up its own oil cash in contrast to Britain, the leader of the pro-Union Better Together campaign said that “if we had our time over again, perhaps we should have”.

He added: “But it’s a bit like regretting what happened in the 19th century. It has happened, I’m afraid.”

His comments were immediately seized on by the SNP which said Mr Darling had conceded the “squandering of billions of pounds of North Sea oil and gas revenue by the UK government”.

But Mr Darling repeated warnings that an independent Scotland would be overly reliant on oil revenues to pay for public services, saying to do so would be a “foolish” step.

The SNP has long supported the setting up of an oil fund, in which tax revenues from the North Sea are saved and invested, rather than put towards day-to-day spending.

It has pointed to the Norwegian oil fund, which is now ranked as the world’s largest sovereign wealth fund, has estimated assets of more than $750 billion (£480bn).

By contrast, during the boom years of the North Sea in the 1980s, revenues accruing to the UK were spent, particularly on massive welfare payments.

Earlier this year, a SNP commissioned panel of experts backed the principle of an oil fund if the country were to vote for independence next year.

However, it also said that “in the near term”, such revenues would be required to fund current public services and to reduce borrowing. Ministers say they back an oil fund when “fiscal conditions allow”.

In an interview with the BBC’s Hard Talk programme, Mr Darling added: “The idea you could spend more on public services, more pensions, and at the same time saving more – you can’t save and spend money at the same time”.

However, SNP figures last night said Mr Darling’s admission over the failure to set up an oil fund marked an “important watershed” in the constitutional debate.

Jim Eadie, SNP MSP for Edinburgh Southern, said: “The North Sea’s vast revenue could and should have been saved for future public spending projects to improve the lives of people in Scotland and across the UK – but Westminster has misused the cash and wasted it on projects like expensive and unwanted Trident nuclear weapons.”