It is not too late in the life of North Sea oil and gas output to set up a special fund to create a “lasting legacy” from the sector in Scotland, Finance Secretary John Swinney claims.
Mr Swinney said in Aberdeen yesterday the potential tax revenues available from remaining oil and gas reserves, worth hundreds of billions of pounds, meant a new oil fund was very worthwhile.
This was despite an industry expert warning recently it was too late in the day for such a move as most of the wealth from the North Sea had already been exploited.
Mr Swinney accused the UK Government of having squandered £230billion of tax revenues raised from Scottish waters over the past three decades.
He added: “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.”
The Scottish Government yesterday published a new discussion paper on the options for an oil fund as part of its “national conversation”.
Alex Salmond has repeatedly argued the case for some oil revenues to go into a fund. But setting one up just for Scotland, either before or after independence, would mean dividing spoils that currently go to the Treasury and handing control over the bulk of North Sea taxation to Edinburgh.
The rationale for an oil fund, like ones in Norway and Alaska, was questioned in a report by the Scotland Office last month and doubts were raised by an industry expert earlier this week.
Andrew Reid, Aberdeen-based managing director of energy consultant Douglas-Westwood, said the idea was good in principle but it was now too late. He also said the middle of a recession was a bad time to start a fund when the Treasury needed every penny it could get.
But Mr Swinney, who last night launched the new Aberdeen Centre for Research in Energy Economics and Finance, said the UK was “practically alone” among major oil and gas producers in not having an oil fund.
He said: “Norway’s is worth over £200billion and Alaska uses a proportion of its fund to pay an annual dividend to its citizens worth an average of more than £1,000 each year in the past decade.”
Andy Kerr, Labour’s shadow finance secretary, said: “If Scotland had started an oil fund when Norway did, the total value of the fund today would be £0.
“That is because successive governments have spent more money on Scottish public services like schools, the NHS and transport than have been taken in oil taxes.”
He added: “To pay money into an oil fund now, John Swinney would actually have to voluntarily cut money from public services. In the teeth of recession that is pretty desperate stuff.”
Liberal Democrat finance spokesman Jeremy Purvis said: “This is yet more fantasy finance from the SNP.”