Opinion: Was the UK government’s use of North Sea Oil a scandal? – Simon Wren-Lewis -John Gelmini

North Sea Crude Oil Samples

North Sea Crude Oil Samples (Photo credit: karenblakeman)

I tend to agree with Dr Alf here.

Margaret Thatcher believed that people made redundant during the recession of the early 1990s would take their redundancy pay and start new businesses.

A very few did, whilst the rest guzzled beer and frittered the money away on debauched and licentious living.

I remember this well because many of the latter lost their houses (they failed to insure their mortgages) and became tenants of buy to let landlords.

Those in this positions lost their credit ratings, were unable to borrow from banks and until the economy grew again in the 1990s were not able to get jobs.

North Sea oil money, which should have been used to modernize the country, and earn foreign exchange, via an intelligently run Sovereign Wealth Fund, was wasted on dole money and has since been used to prop up the NHS, until payments of dole money and pensions made the NI fund insolvent in 2000, making it necessary to fund the NHS through Petroleum Revenue Tax, money filched from the “good causes” part of National Lottery Funding and now the doubled price of lottery tickets.

As oil wells tend to replenish themselves and new techniques have been developed to get at hard to extract reserves, there is more money to be had from North Sea Oil, but as before, the new money is being squandered on make-work schemes designed to conceal the true level of unemployment, actual unemployment and on training scheme providers who have had no more success at finding people jobs than would have occurred if they had not been in existence in the first place.

John Gelmini

 

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mainly macro: Was the UK government’s use of North Sea Oil a scandal?

This is an excellent MUST READ article from Oxford economist, Simon Wren-Lewis. Check it out!

mainly macro: Was the UK government’s use of North Sea Oil a scandal?.

Personally, I’m of the opinion that the UK squandered revenues from offshore oil and gas – certainly there is no sovereign wealth fund like Norway.

Any thoughts?

A North Sea Oil rig. North Sea oil production ...

A North Sea Oil rig. North Sea oil production is centred on the waters to the NE of the Scottish mainland. (Photo credit: Wikipedia)

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