blipblopbleep

To fuel a state: the Fossil Fuel integer.

Oil and gas as a percentage of the UK economy is many times smaller than as part of the Scottish economy. If memory serves, oil and gas accounts for around 2% of the UK's tax take and around 14% of Scotland's. If oil and gas tax receipts were to fall by 20% in a single year - let's say because either the oil price falls for some reason or production fails to meet expectations - then it would reduce the UK's tax intake by 0.4%. In Scotland the figure would be a reduction of 2.8%. It is evident who would be better equipped to cope in such a scenario.


From here the question arises as to the proposed creation of an 'Oil Fund' from day zero in the event of Independence. http://www.bbc.co.uk/news/uk-scotland-scotland-politics-27565691
This higher spending per head is in part thanks to oil revenues. This is where what could have potentially been part of the fund has gone, e.g., free university education (with some £150 spent per head compared to England’s £120 per head), funding for the NHS (notable that this is already devolved power which could receive financial bolstering if desired through the Scotland Act 1998 which allows the Scottish Parliament power to alter Income Tax rates by 3% in either direction, a potentially substantial boost and thus far an unemployed measure), free prescriptions, etcetera. Clearly this is not money wasted. Far from it, it is invested in a manner that of great benefit for Scottish society as a whole. As an example Scotland has a great education system benefitting from such extra spending. What price do you put on that extra education spending in the long term? Is it a better option to froego and save for the rainy day? There's no way to know.
Whether an oil fund was ever a good idea or not now is moot. No party suggested the measure. No vote was put. This has no bearing on what is done now or from ‘Day Zero’ and beyond. To suggest there is a position to create a Norway-esque oil fund post-independence could be described as quixotic at best.

The SNP is as responsible as anyone else in as far as they could have begun an 'oil fund' when in Government in preparation for such an eventuality as independence or for any number of fiscally prudent reasons. How much of a surplus have they run? How much do they plan to run to enable this oil fund? It is pointless to now look backward and state, "we should have done X". They as much as any other party are culpable for the lack of founding and maintainance of an oil fund/wealth fund,  which almost certainly will not be generated from here on unless there is a truly substantial discovery that changes the game for everyone.

Finally it is worth noting that falling oil and gas revenues are officially predicted http://www.ft.com/cms/s/0/401fa55a-0817-11e4-9afc-00144feab7de.html#axzz3CooWSbeT Operators only have a finite pot of cash for exploration and the North Sea is but one area in a global competition which sees better potential returns elsewhere. What the SNP propose to do vis a vis tax rates resources extracted from the North Sea, having suffered from a kicking of a tax hike in 2011,could prove crucial should a concrete commitment be made prior to the election. Striking the right balance on tax becomes a lot more important when 15% of your economy is concerned. Such a commitment remains invisible for the time being. If oil revenues do indeed drop then surely, as an example, the NHS/public service provision in Scotland will be at risk. The same goes in the event of capital flight or implosion of the financial industry.Again these do not appear to be questions Salmond is willing to publicly entertain.

As it stands how wise a gamble is this to take?