UK Government refuses to invest £176 million in North Sea to earn £110 billion because Scotland would benefit

From Energy Voice today:

‘An oil and gas sector deal bid — submitted last year by a group of industry bodies — predicted a total spend of £176 million “had the potential” to deliver £110 billion for the UK economy between now and 2035, with Scotland being a main beneficiary.’

https://www.energyvoice.com/oilandgas/north-sea/199021/oil-and-gas-sector-deal-unlikely/

Perhaps another reason is because they don’t plan to tax the oil industry too much in case they offend their Eton chums or because some of us think Scotland might become rich after independence? It’s clear that they have not done so in the past. See this from Platform London:

oil1.png

oil2.png

‘Platform’s research, compiled into a simple infographic, shows that:

  • Britain only receives a fraction of the oil revenues that Norway receives. In 2010, the state revenue per barrel in Norway was $48.50; in Britain it was only $21.50 – less than half.
  • The value of Scotland’s proven reserves per UK resident under the current fiscal regime is $1,020. If an independent Scotland mirrored Norway’s tax & ownership structure over oil, the value would be $27,479 per Scottish resident.
  • The lax tax regime allows corporations to make enormous profits, at the expense of the public purse. Profitability for UK Continental Shelf companies is generally at least three times that of non-UKCS companies. In 2008 Q2, the net rate of return for North Sea oil companies reached 62.6%, while non-oil companies were at 12.2%. In 2013 Q4 the UK Continental Shelf companies’ net rate of return was 30.4%, while non-oil companies rate of return was 11%.
  • Cashflow from the North Sea is used to subsidise drilling elsewhere in the world.
  • In the six years from 2002 until 2008, Britain missed out on £74 billion in oil revenues, compared to if it had applied the Norwegian model. This could have covered five years of cuts to legal aid, the NHS, pension credit, child benefit, the arts, sports and public transport. Alternatively, £74 billion spent in Scotland could have provide Scotland with 10 new mega-hospitals like the South Glasgow Hospital and 1,000 new GP clinics, with 10,000 new doctors and 20,000 new nurses to staff them. As well as a renewable energy project in every community, a community centre in every village and a solar panel on every home, to enable a decentralised and democratically-owned energy system. And a high-speed rail between Edinburgh and Glasgow, 10 new railway lines in Scotland and free local bus services. And free state childcare for pre-schoolers, a return to grants for higher education students and a citizen’s income for all Scottish residents of £5,200 per year.

If Scotland gains full control over its energy resources, whether through independence or devolution-max +energy, it could follow the Norwegian model, rather than replicating the UK fiscal regime.
* Norway is a comparable oil province to the UK Continental Shelf.
* The UK does not have higher costs; investment in Norwegian offshore drilling has been consistently higher than in the UK.
* Norway’s fiscal regime is not a deterrent to investment. According to the Norwegian Ministry of Petroleum, it is “designed to be neutral, so that an investment project that is profitable before tax will also be profitable after tax.”

https://platformlondon.org/scotland/

7 thoughts on “UK Government refuses to invest £176 million in North Sea to earn £110 billion because Scotland would benefit

  1. Alasdair Macdonald May 10, 2019 / 9:51 am

    Taxation is the principal method of redistribution of wealth and power FOR THE COMMON GOOD. The reason that the Tories and many of their chums in Labour and the LibDems want ‘light touch’ taxation is that it ensures that the bulk of the revenues go to the very narrow group who have substantially captured Westminster and Whitehall and transformed it into even more overtly their agent.

    The opposition to independence for Scotland is that this line of enrichment for the few would be closed off.

    The Labour Party opposition to independence is based on a distortion of the idea of the common good. They want it for the good of the ‘common people’ of BRITAIN, by which they mean, since they form the big majority, mainly the people of England. Now, as a socialist/social democrat I have strong feelings of solidarity with the common people of England, but, the common people of England have not shown much real awareness of the nature of Britain/England and of its exploitative nature.

    The Labour Party of Mr Jeremy Corbyn is, essentially, an English party, although the leader and a huge number of its mass support in England sincerely believe it is ‘internationalist’. They are, broadly, in favour of a united Ireland, although are a bit ambivalent with regard to the unionists of the north of Ireland, whom, Mr John McDonnell, likes to present as being working class. However, they find it difficult to grasp that Scotland and Wales are not Britain/England.

    They characterise advocates of independence or self-determination for Scotland and Wales as ‘nationalists’, which carries the baggage of National Socialism and Fascism and ‘blood-and-social’ xenophobia. They deny the concept of ‘civic nationalism’, which is about the people who live and work in a particular place, irrespective of their place of origin, are citizens of that country and have the sovereign right to run things democratically in their interests.

    It is this democratic, participative, communitarian aspect which frightens many in Labour, because they are essentially ‘dirigiste’ and know what people ‘need’ and are suspicious about what people ‘want’, because they might not ‘want’ the things that Labour believes they ‘need’. Hence, Scotland cannot govern itself and the oil revenues have to be taken to London and deployed as Labour sees fit. The suppressing of the McCrone report was necessary because these Scottish people would get ‘unrealistic’ ideas about what they are capable of.

    Like

    • johnrobertson834 May 10, 2019 / 10:44 am

      All true. The Germans don’t do charity, I hear, because they pay their taxes.

      Like

  2. GentlemansFamilyFinances May 10, 2019 / 12:35 pm

    Have you thought of investing your own money to benefit from this huge upside – if it’s a no brainer and you really know what you arr talking about then convincing yourself and others to raise the 100m or so should be simple…

    Like

  3. Ludo Thierry May 10, 2019 / 4:55 pm

    Off topic but also involving another important Scottish industry (which shares certain sea areas with the Scottish Petroleum industry). The news.gov.scot site is carrying 2018 update (provisional) info on the Scottish sea fisheries stats – link and snippets below:

    https://news.gov.scot/news/provisional-scottish-sea-fisheries-statistics-2018

    Latest figures show that in 2018, Scottish-registered fishing vessels landed 445 thousand tonnes of sea fish and shellfish with a value of £572 million. This represents an decrease of 20 thousand tonnes[1] (4%) and an increase of £12 million (no significant change in real terms) from 2017.

    There were 2,087 active Scottish registered fishing vessels in 2018, an increase of 1% from 2017. The number of fishers working on these vessels was 4,857, which is 58 (1%) higher than in 2017 (4,799).

    Scottish fishing fleet
    The number of active Scottish registered fishing vessels in 2018 was 2,087, an increase of 19 vessels (1%) from 2017. The change in vessel numbers was
    largely due to 20 additional creelers of under 10m.

    At the end of 2018, the number of vessels in:

    • The under 10m fleet increased by 32 to 1,538 vessels

    • The 10 metre and over fleet decreased by 13 to 549 vessels

    In keeping with other European nations, the Scottish fishing fleet has generally been reducing in number over the past ten years, down 89 vessels (4%) in 2018 compared to 2009. There have been changes in composition of the fleet, with 144 fewer 10m and over vessels and an increase of 55 under-10m vessels, which are primarily engaged in creeling.

    Employment
    In 2018, the overall number of fishers working on Scottish fishing vessels was reported at 4,857, which is 1% up on the figure reported in 2017. However, the number of regularly employed fishers increased by 100 (3%), irregularly employed fishers decreased by 41 (5%) and the number of crofters reported decreased from 6 to 5. This shift from irregular to regular employment continues the differences seen in 2017.

    Ten Year Trends
    Compared to 2009, in 2018 the tonnage of fish landed was up 18% and real terms value was up 11%.

    NOTE the 10 year trends (during the SNP Scottish Govt terms – and the much maligned (by tories) EU Common Fisheries Policy) – since 2009 there has been an increase in tonnage of 18% and in value of 11%.

    NOTE the increase In smaller vessels eg creelers. (These smaller vessels often represent directly involved family businesses rather than the large international corporations and rentier groups).

    NOTE the increase in regularly employed fishers and decrease in the irregularly employed fishers. Again, indicative of parts of the fisheries being gradually restored to directly involved family businesses rather than the international rentier corporations.

    Slow, difficult changes to engineer and push forward – but, under the SNP Scottish Govt (and the EU Common Fisheries for all its various faults), some real progress is being achieved.

    Like

  4. annraynet May 10, 2019 / 9:25 pm

    You do a great job, John, but how do we get stuff like this on the front pages of newspaperes other than the National?
    If people realised how Scottish industries and infrastructure are deprived of funds, they would be protesting, but no-one is telling them.

    Liked by 1 person

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