Where is my oil money?

Scarpacci

I don't think this country will ever run a surplus of anything. It's just not in our DNA, as evidenced by how poorly managed the North Sea oil money has been and how pitifully little it will do for us. As soon as any money would start piling up, there would be calls from the left to spend it on their pet projects and from the right to cut taxes. Nobody seems to recognise the value of money in the bank (or invested), like the Norwegians did. Like the Gulf States and many other smaller countries whose sovereign wealth funds are buying up parts of the West.

I don't think it will be any better if Scotland's independent and does try to emulate Norway. The state is not small in Scotland and is unlikely to be any smaller should the SNP have full control. Add in the extra costs just to finance their current spending in an independent Scotland, and the oil money will continue to do squat.

antrobus

Glen_Clark wrote: »

Interesting comparison between the Saving and Investment policy of the Norwegian Government, compared to the British Government. Worth reading all the way through: http://www.theguardian.com/commentisfree/2014/jan/13/north-sea-oil-money-uk-norwegians-fund

No it isn't really. The author really doesn't have a clue.

Last time I looked, Norway was producing twice as much oil and gas as the UK with a population of only 5 million, compared to the UK's 60 million plus. So on a per capita basis that's a factor of about 25. It's no wonder therefore that Norway's government runs at a surplus of over 10% of GDP. If you're running at a surplus it makes sense to invest some of that surplus, but if you're running at a deficit....

Archi_Bald wrote: »

Norway doesn't seem to feel the need for being constantly involved in costly wars, either.

So the Norwegian military contribution to the International Security Assistance Force in Afghanistan was just a figment of everybody's imagination?

CLAPTON

Glen_Clark wrote: »

You can't have read it. There are lots of facts and figures with web links to supporting evidence.
As to what the Guardian were arguing for in 1980 I have no idea, and can't see any relevance. Unless you are saying the Tory Government was run by the Guardian?

I'm suggesting that the guardian at the time was arguing for more state spending due to the high unemployment at the time rather than more cuts and hence more to invest overseas.

Any moron can say what should have been done in hindsight : it's what you argued for at the time that counts.

Do you want us to start a sovereign funds now by cutting the deficit to zero (and some more) by slashing state spending and/or increasing taxes?
We have that option right now.

Glen_Clark

CLAPTON wrote: »

I'm suggesting that the guardian at the time was arguing for more state spending due to the high unemployment at the time rather than more cuts and hence more to invest overseas.

Any moron can say what should have been done in hindsight : it's what you argued for at the time that counts.

Do you want us to start a sovereign funds now by cutting the deficit to zero (and some more) by slashing state spending and/or increasing taxes?
We have that option right now.

You cannot have read the article.
We don't have that option right now because the oil money is gone.

Glen_Clark

antrobus wrote: »

So the Norwegian military contribution to the International Security Assistance Force in Afghanistan was just a figment of everybody's imagination?

You might think that being surrounded by water, Britain would be the cheapest of the EEC countries to defend. Yet Britain's military spending is by far the biggest of the 28 EEC countries. How does that compare with Norway?
http://en.wikipedia.org/wiki/Military_of_the_European_Union

antrobus

Glen_Clark wrote: »

You might think that being surrounded by water, Britain would be the cheapest of the EEC countries to defend. Yet Britain's military spending is by far the biggest of the 28 EEC countries. How does that compare with Norway?
http://en.wikipedia.org/wiki/Military_of_the_European_Union

Firstly, you're missing the point by a country mile. I was responding to the claim that "Norway doesn't seem to feel the need for being constantly involved in costly wars, either." by pointing out that Norway has indeed felt the need to 'be involved' in various wars, costly or otherwise.

Since you seem to like Wikepedia as a source here's a list of 'Norwegian military operations abroad'
http://en.wikipedia.org/wiki/Norwegian_military_operations_abroad

There have been rather a lot of them since 1945. Norway is not Switzerland.

Secondly, why do you thinks it's cheaper to defend an island?

Finally, it hasn't been the EEC since 1993, when it became the EU. Do try and keep up with things.:)

Jegersmart

antrobus wrote: »

No it isn't really. The author really doesn't have a clue.

Last time I looked, Norway was producing twice as much oil and gas as the UK with a population of only 5 million, compared to the UK's 60 million plus. So on a per capita basis that's a factor of about 25. It's no wonder therefore that Norway's government runs at a surplus of over 10% of GDP. If you're running at a surplus it makes sense to invest some of that surplus, but if you're running at a deficit....



So the Norwegian military contribution to the International Security Assistance Force in Afghanistan was just a figment of everybody's imagination?

As a Norwegian foreign national permanently residing in the UK, I would disagree that it isn't a useful comparison. The concept/model relating to what they are doing is relatively unique and something to be encouraged - i.e. the conservation of profits from natural resources whatever they may be.

As someone else has pointed out, Norway produces about 3.8M bpdoe with a 12th of the population of the UK who produces around 1.62M bpdoe so the benefit would be very different.

I also disagree with posters who insinuated that the Norwegian State is not a bloated and big organism. In my view, Norway (and Denmark actually) are very much a nanny-state who apply very high taxes to the population whilst at the same time providing a plethora of different support schemes in terms of state handouts for all kinds of different support system. I am not saying that this is a bad thing in its entirety, support for the elderly and disabled etc. are not examples I would include. There are however very high numbers of people on state benefits or indeed have been pensioned off in their 30-40's permanently for "stress", performance-angst and all kinds of other conditions that are to be fair not easily diagnosed or are in a lot of ways "subjective" conditions. In Denmark, a female hair-dresser of 43 years of age who had developed a bad knee as part of standing up so much in her role won compensation in terms of 2 years full pay and free re-training, and was pensioned off early on 50% pension for the rest of her life on the condition that she attends 4 job interviews a year and if she starts earning again then she would lose this benefit......I have seen similar cases in Norway.

There are not many people who would argue against a society where we pool our taxes to support our elders and the sick - but with these systems one also finds many many cases of abuse - which in itself is a very subjective thing.....I remember talking to my other half's aunt in Denmark who was telling me with a serious face that she almost had a breakdown last year. I asked why. She said that she had purchased a puppy, and that the puppy needed everything doing for it - feeding, play and walks etc. and she became so stressed by that that she had to give the puppy away again and was in a very bad way for a month. This is from a 55 year old woman who has been permanently pensioned off since she was 41........

It is a difficult thing to have a meaningful debate on - however as a summary I would say that for me personally the ideal behind the Oil Fund is a great and noble one, but of course a Norwegian doesn't see any of that money as such and who only knows what it may be used for in the future.....

J

opinions4u

who only knows what it may be used for in the future.....

Conquering Russia!

antrobus

Jegersmart wrote: »

.... The concept/model relating to what they are doing is relatively unique and something to be encouraged - i.e. the conservation of profits from natural resources whatever they may be.

I wouldn't say it was unique. Quite a number of oil rich countries have sovereign wealth funds. Like Saudi Arabia, Kuwait, Qatar....

Jegersmart wrote: »

....As someone else has pointed out, Norway produces about 3.8M bpdoe with a 12th of the population of the UK who produces around 1.62M bpdoe so the benefit would be very different....

That would be me.:) But I'm grateful for the confirmation.

Wilkins

On a related issue, what are people's feeling about Britain trying to develop a Sovereign Wealth Fund? The obvious vehicle to start this would be UKFI.

Probably a non-starter, politically, owing to the perceived need to reclaim taxpayer bailout funds, I wonder how this sits with the modern capitalist consensus?

On the one hand the state would be trying to do (long term investment) what, arguably, might be better done by private investors. On the other hand, long term investment income could be used to offset future taxpayer funding of essential state services.