Key Takeaways
- • Economist Tony Mackay, who first recommended Norway's oil fund in the late 1970s, told the Sunday National that a Scottish sovereign wealth fund could be worth roughly twice Norway's today had Scotland held the necessary financial powers at the time.
- • Norway's fund is currently worth roughly £1.6 trillion, or about £283,000 per Norwegian citizen, according to the article.
- • Mackay estimates Norway's North Sea revenues are about 50% to 60% of Scotland's, based on a February study by Graeme Roy, Niall MacKenzie and Sandy Stewart that put North Sea oil and gas's contribution to Scotland's economic output at around £1 trillion in today's prices.
- • Mackay disputes Chancellor John Healey's claim that a UK fund could be worth £1 trillion, arguing a Norway-style fund would not have succeeded for the UK as a whole given its scale.
- • Mackay calls the UK's £2 billion Energy Wealth Fund "too little, too late" and says the OBR's forecast that North Sea tax revenue will be "close to zero" in five years is one he agrees with.
Summary
Tony Mackay, the Scottish economist whose 1975 book The Political Economy of North Sea Oil led to his involvement in Norway's oil fund, told the Sunday National that Scotland could have a sovereign wealth fund worth twice Norway's if it had possessed the financial powers to establish one when Norway did. After his report recommending the fund was accepted by the Norwegian government in the late 1970s, Mackay said he put similar proposals to the Secretary of State for Scotland and MPs in the Aberdeen area. He said Scottish politicians were keen but the UK Government was not interested, adding that independence or greater devolution, including financial powers, could have produced a fund as successful as Norway's.
Norway's fund, which grew out of a 1979 book Mackay wrote at the request of Norwegian colleague Terje Lind and a subsequent government-commissioned report, is currently worth roughly £1.6 trillion, or around £283,000 per Norwegian citizen, according to the article. Mackay said the money generated by North Sea oil and gas in UK and Scottish waters has exceeded Norway's. He cited a February study by Professors Graeme Roy, Niall MacKenzie and Sandy Stewart which found North Sea oil and gas had increased Scotland's measured economic output by around £1 trillion in today's prices. Mackay estimated Norway's figure at about 50% to 60% of Scotland's and agreed that a Scottish fund could today be worth twice the Norwegian one.
Mackay doubted Chancellor John Healey's claim that a UK sovereign wealth fund set up in the 1980s would now be worth around £1 trillion. He said he did not believe a Norway-style fund would have succeeded for the UK as a whole given the difference in scale, citing his decades of work for the World Bank and Asian Development Bank in oil-producing countries.
On current UK policy, Mackay described the Energy Wealth Fund, announced in October alongside approval of the Jackdaw gas field with a £2 billion initial payment, as "too little, too late" given the North Sea's decline. He expects oil prices to fall by almost half in the near future and considers the Rosebank field, on which a decision is expected by the end of 2026, to be "tiny" compared with fields such as Brent. He agreed with the Office for Budget Responsibility's forecast, published alongside the Budget, that North Sea oil and gas tax revenue will be "close to zero" in five years.
Norway's fund, which grew out of a 1979 book Mackay wrote at the request of Norwegian colleague Terje Lind and a subsequent government-commissioned report, is currently worth roughly £1.6 trillion, or around £283,000 per Norwegian citizen, according to the article. Mackay said the money generated by North Sea oil and gas in UK and Scottish waters has exceeded Norway's. He cited a February study by Professors Graeme Roy, Niall MacKenzie and Sandy Stewart which found North Sea oil and gas had increased Scotland's measured economic output by around £1 trillion in today's prices. Mackay estimated Norway's figure at about 50% to 60% of Scotland's and agreed that a Scottish fund could today be worth twice the Norwegian one.
Mackay doubted Chancellor John Healey's claim that a UK sovereign wealth fund set up in the 1980s would now be worth around £1 trillion. He said he did not believe a Norway-style fund would have succeeded for the UK as a whole given the difference in scale, citing his decades of work for the World Bank and Asian Development Bank in oil-producing countries.
On current UK policy, Mackay described the Energy Wealth Fund, announced in October alongside approval of the Jackdaw gas field with a £2 billion initial payment, as "too little, too late" given the North Sea's decline. He expects oil prices to fall by almost half in the near future and considers the Rosebank field, on which a decision is expected by the end of 2026, to be "tiny" compared with fields such as Brent. He agreed with the Office for Budget Responsibility's forecast, published alongside the Budget, that North Sea oil and gas tax revenue will be "close to zero" in five years.
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