Monday, 19 November 2012

Who, exactly, is doing this "allocation"?

I've more-or-less given up on reading stuff about the economic prospects of an independent Scotland. We'd be prosperous or poor according to the extent that property rights are supported. That's about it.

But I just can't stop myself reading this sort of thing:

Scotland’s economic future would be brighter if North Sea oil and gas revenues were allocated on a geographical basis, as the IFS claims its public finances “look to have been somewhat stronger than the UK’s in recent years”.

However, the report warns that if Scotland was to receive oil and gas revenues based on its population rather than geography, the situation would leave the country’s economy in a much weaker position in the long term, due to public spending outstripping tax revenues.

Now I don't believe that the oil belongs to any government. It should be solely under the control of the companies that drill it from under the seabed. Subject of course to any justifiable compensation to fishermen who had previously mixed their labour with the relevant parts of the North Sea.

But if one accepts that government may tax the oil then it surely follows that the government of the country in whose waters the oil resides would be the one to levy any taxation.

The oil in question has already been allocated by geography and geology. Unsurprisingly, international law accepts that the vast majority of the oil in question lies in Scottish territory. If you're not too keen on technical legal matters, consult a map.

If the oil is to be "allocated" on a population basis then it follows that around 8.5% of the M25 would belong to the government of an independent Scotland.


Bill said...

Yawn. Listening to John Swinney on the radio this morning rather reminded me of the occasion when an elderly (and very wealthy, in one way or another bizarrely enough) lady client explain to me how she planned to cover an overdraft on one of her accounts by writing a cheque to cover it on that same overdrawn account.

Do supporters of the SNP wish to be INDEPENDENT or not? I have never been in any doubt that a separate (aka 'independent') Scotland could be viable, it's just that I prefer to retain my British nationality - I was born British and hope to retain that status until my death.

Unfortunately, listening to people like John Swinney on the radio this morning (or indeed Salmond or Sturgeon on various occasions recently) I think that their 'forensic' accounting would very quickly land Scotland back in the crisis that brought about the UK in the first place, a modern version of the Darien Scheme.

Maybe if the SNP could be rescued from the 'get rich quick merchants' who run it (and have always run it) one might have more confidence that they had thought their plans through sufficiently carefully.

Perhaps the goal of 'independence' is thought to be more important than mere matters of economic rationality or competence, when trying to persuade people that their plans are soundly based?

Colin Finlay said...

What are more soundly based than blood and soil?