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Scottish independence: Fiscal Commission backs oil fund for Scotland Scottish independence: Fiscal Commission backs oil fund for Scotland
(34 minutes later)
A team of economic advisers appointed by the Scottish government has said an oil fund should be established in the event of independence.A team of economic advisers appointed by the Scottish government has said an oil fund should be established in the event of independence.
The Fiscal Commission Working Group concluded that there should be both a short-term stabilisation fund and a long-term savings fund.The Fiscal Commission Working Group concluded that there should be both a short-term stabilisation fund and a long-term savings fund.
But pro-Union Better Together said you "can't save money while you are borrowing money".But pro-Union Better Together said you "can't save money while you are borrowing money".
The people of Scotland will vote in the independence referendum next year.The people of Scotland will vote in the independence referendum next year.
On Thursday, 18 September, 2014, they will be asked the straight yes/no question: "Should Scotland be an independent country."On Thursday, 18 September, 2014, they will be asked the straight yes/no question: "Should Scotland be an independent country."
The commission's 85-page report made a number recommendations including;The commission's 85-page report made a number recommendations including;
Crawford Beveridge, who is in charge of the fiscal working group, said the oil and gas industry had made a significant contribution to Scotland's economy for four decades and would represent a valuable asset in the future.Crawford Beveridge, who is in charge of the fiscal working group, said the oil and gas industry had made a significant contribution to Scotland's economy for four decades and would represent a valuable asset in the future.
He explained: "This report sets out how both a short-term stabilisation fund and a long-term savings fund could be incorporated into the fiscal framework of an independent Scotland, potentially as early as 2017-18.He explained: "This report sets out how both a short-term stabilisation fund and a long-term savings fund could be incorporated into the fiscal framework of an independent Scotland, potentially as early as 2017-18.
"This could help to maximise the economic opportunity that Scotland's oil and gas wealth presents and ensure that it provides a lasting benefit for future generations.""This could help to maximise the economic opportunity that Scotland's oil and gas wealth presents and ensure that it provides a lasting benefit for future generations."
But the head of Better Together, Alistair Darling, said it was not possible to spend the same money more than once.But the head of Better Together, Alistair Darling, said it was not possible to spend the same money more than once.
In a blog written after the publication of the commission's report, he said: "Currently oil revenues make up just 2% of the UK tax take, but an independent Scotland would rely on North Sea revenues for anything up to 20% of our tax revenues. So spending on public services would depend on the ups and downs of world oil prices.In a blog written after the publication of the commission's report, he said: "Currently oil revenues make up just 2% of the UK tax take, but an independent Scotland would rely on North Sea revenues for anything up to 20% of our tax revenues. So spending on public services would depend on the ups and downs of world oil prices.
"The solution to this, say the SNP, is to establish this stablisation fund."The solution to this, say the SNP, is to establish this stablisation fund.
'Impartial advice'
"They suggest planning public finances on the basis of a particular oil price level of production and then, in the years when the oil price exceeds that level, save some of that money to fill the gap in public spending that we would face when the price drops."They suggest planning public finances on the basis of a particular oil price level of production and then, in the years when the oil price exceeds that level, save some of that money to fill the gap in public spending that we would face when the price drops.
"It sounds fair enough until you remember that even in the years of highest oil prices in the last decade Scotland has still run a fiscal deficit.""It sounds fair enough until you remember that even in the years of highest oil prices in the last decade Scotland has still run a fiscal deficit."
'Lasting benefit'
The Fiscal Commission Working Group was established in March 2012 and given the brief by the Scottish government to provide "impartial technical advice on the economic choices, challenges and opportunities for Scotland post-independence".The Fiscal Commission Working Group was established in March 2012 and given the brief by the Scottish government to provide "impartial technical advice on the economic choices, challenges and opportunities for Scotland post-independence".
Scotland's Finance Secretary John Swinney welcomed the report of the commission.Scotland's Finance Secretary John Swinney welcomed the report of the commission.
He said: "Their work highlights the significant opportunities that Scotland's oil and gas wealth presents and answers the key questions that have been raised about how this wealth should be managed in an independent Scotland.He said: "Their work highlights the significant opportunities that Scotland's oil and gas wealth presents and answers the key questions that have been raised about how this wealth should be managed in an independent Scotland.
"Firstly, the Working Group have outlined how a stabilisation fund, into which higher than forecast oil and gas revenues are deposited, would minimise North Sea revenue volatility from changes in oil prices."Firstly, the Working Group have outlined how a stabilisation fund, into which higher than forecast oil and gas revenues are deposited, would minimise North Sea revenue volatility from changes in oil prices.
"Secondly, the report also sets out how an independent Scotland could invest in a longer-term savings fund to ensure that Scotland's oil wealth provided a lasting benefit to the country.""Secondly, the report also sets out how an independent Scotland could invest in a longer-term savings fund to ensure that Scotland's oil wealth provided a lasting benefit to the country."
Mr Swinney explained that the purpose of the two funds was different.Mr Swinney explained that the purpose of the two funds was different.
The stabilisation fund would provide the mechanism for smoothing out the fluctuations in oil and gas prices, he said.The stabilisation fund would provide the mechanism for smoothing out the fluctuations in oil and gas prices, he said.
The minister added that a long-term savings fund could be set up when "borrowing is manageable and debt is on a downward path as a proportion of national wealth".The minister added that a long-term savings fund could be set up when "borrowing is manageable and debt is on a downward path as a proportion of national wealth".