The effect and the cause
A couple of interesting passages from Hansard in January 2012:
“The Government’s decision in March 2011 to increase tax rates on the industry, which increased the top tax rate to 81% and the corporation tax rate to 62%, is inevitably and regrettably having a chilling effect on the leading indicators of investment.
The signs of lower investment in the future are already apparent. Indeed, my hon. Friend the Economic Secretary will see from the Department of Energy and Climate Change’s latest energy trends analysis a significant impact on drilling activity, with exploration wells down 50% in 2011.
It is from that exploration drilling that the future large capital investments will flow. The March 2011 tax increase reduced the value of future projects by 25% overnight.“
(Our emphasis.) The words of some dastardly separatist panicking about the value of Scottish oil? Not so much. The lines quoted above were addressed to Parliament by the Rt. Hon. Nicholas Soames, Conservative MP for Mid Sussex.
In March 2011 Labour were still leading in the polls for the Holyrood election, so we’re not about to go suggesting that George Osborne was secretly engaged in a devious conspiracy designed to sabotage the independence movement a couple of years later. We’re not at all convinced he’s that clever, though we’re sure the Chancellor isn’t too upset by the coincidence.
What we’re saying is, maybe it’s not entirely surprising that oil revenues had a downward blip last year, and that it’s not indicative of any fundamental weakness in the Scottish economy. We also suspect that it might be best for the future prospects of both the oil industry and Scotland if Mr Osborne somehow wasn’t in a position to wreak such reckless havoc on them at the stroke of a pen again.
And that’s a view we’re not alone in.
So, I believe this is deliberate attempt by Osborne to sabotage the oil industry, and is also possibly a sign that WMD knows hey have lost the referendum. He saw these figures earlier this month and immediately announced a ore tax raid on the industry, it can’t be anything other than attempts to wreck Scotland’s future economy.
An article from Business from Scotland to supplement the Rev’s article;
link to businessforscotland.co.uk
The latest Government figures on Scotland’s economy contain billions in service charges for activities in the rest of the UK. As pointed out by Douglas Fraser, BBC Scotland Business and Economy Editor, this raises a challenge over measuring Scotland’s economy.
Despite claiming to present Scotland’s financial position, the Government Expenditure and Revenue Scotland figures include higher costs for defence, debt and administrative services that should not apply to Scotland.
The extra costs for services in the rest of the UK make Scotland’s finances appear worse than they actually are by billions of pounds every year. In the last 5 years these sectors cost Scotland £35 billion; yet Scotland did not receive or need £35 billion in services. Only in an independent Scotland will Scotland have full control over its own financial decisions and spending.
Another one for the Wee Blue Book. Quality stuff Rev.
Fuck the tinfoil hats.Frankly,i don’t trust them.
We know for certain they have lied in the past-they are tainted.I will never trust them.
The big independence lie: Why Scotland could keep the pound
link to cityam.com
TRUTH is usually the first casualty of political battles, as it is of war. I believe that Scotland and England are individually stronger for being part of the UK, but 25 years in currency markets tell me that the No campaign’s argument that Scotland cannot keep the pound is false.
It would certainly be a limited version of independence, but there is nothing stopping an independent Scotland from declaring sterling sole legal tender and borrowing it on the financial markets to hold in reserve. However much it may appear to be like having your cake and eating it, neither action requires the permission of the rest of the UK.
Avinash Persaud is emeritus professor of Gresham College, chairman of Intelligence Capital, and a former global head of currency research at JP Morgan.
@Lindsey Smith
Please tell me you’re joking.
Soames is ‘Right’ Honorable… 😉
O/T
NNS giving their slant on the BBC day-trip to parliament yesteday.
Includes some wee bits of footage.
Nicolas Soames will be dragged in for better together reprogramming. The link to the HoC debate records him using all the wrong words and phrases e.g.
“The United Kingdom is indeed fortunate to be endowed with significant resources of oil and gas.”
“British people to enjoy substantial benefits of employment, sophisticated and high-level skills at all levels of the skill chain, tax revenues and balance of payments, and to develop a leading position in the global oil and gas supply chain-all of which has stood this country in good stead down the recent years.”
“The taxes forecast to be raised from the industry in 2011-12 include some £6 billion in income tax, national insurance contributions and corporation tax paid by the supply chain companies, with an additional £11 billion from taxes on production itself. That amounts to 25% of all the corporation tax received by the Exchequer.”
I though oil was a volatile liability that was a scourge to our nation?
Each time the SNP and now the Scottish Government raise the specter of oil wealth Westminster and Whitehall claim an imminent collapse in reserves and demand, and somehow furnish figures to prove their worst predictions correct.
And as soon as the heat is off the debate oil reserves and profits myteriously jump back again, with Westminster and Whitehall professing surprise and happiness and free candy floss for everybody.
The dumbest debate watcher can replicate the oncoming argument by simply duplicating the last one.
Is the site still having problems?
I used to be able to comment without having to fill in my details every time, but not any more.
Also the up down arrow has disappeared, and there is no longer the choice of Italics,bold etc.
Am I missing something?
O/T
This, today, from BBC Scotland:
“For the past six months a multi-million pound US TV series has been filming in Scotland but there is still no word on if it will be shown in the UK.
Outlander has been filming across various locations, including a one-month stint at Doune castle.
The drama’s production is expected to last 38 weeks at a cost of more than £50m.
It has been described as Scotland’s answer to Game of Thrones, the hit series from the US HBO network that has boosted the industry in Northern Ireland where it is mainly filmed.
…
The series will show in America later in the year, with Australian and Canadian networks already having purchased syndication rights.
UK fans of the books may have to wait a while yet as there is no confirmation if the series will be shown in the UK.”
When it runs will someone be kind enough send back a letter from America/Australia/Canada?
Albamac, auditions for Outlander in Newtonmore on Mon coming. Come and be a part of it…
Outlander…. Maybe a wee bit too ‘Scottish’ to be shown anytime soon. I’m so disappointed.
I thought mis-reporting Scotland had hit bottom – I was wrong!
Whilst reporting the state of finances in rUK, let us not forget the off-balance-sheet finances associated with PPP and PFI schemes. Although Scotland does have a few of these excessively expensive schemes, they are far more widespread in rUK. As a consequence, in England alone, there are numerous NHS hospital trusts in dire financial straits, so much so, that Jeremy Hunt, the Health Secretary, is seeking powers to close down any hospital/hospital department without any recourse to local, public consultation.
If these unreported, hidden debts were taken into account, as they ought to be, the current balance sheet for rUK would be in a far worse state relative to Scotland’s financial position. Thus, today’s report only tells half the story.
Osborne may not have been clever enough to plan the effect on oil income this year, but I bet someone was. The future effect was obvious to anyone with shares in the North Sea so why not his pals.
@Douglas Mcdonald
I thought I read somewhere that Eurostat had adjusted UK national debt upwards because of PO pension fund and PFI. possibly Sean Richards on notayesman