10-19-2020, 11:46 AM
Chancellor of the Exchequer Isaac Westcott spoke to the Confederation of British Industry about the recent Government proposal to explore for oil- and to establish a unique national investment fund with the revenues.
In 1974, the Scottish National Party increased their standing in Parliament by pinning much of their campaign to a unique argument: It’s Scotland’s Oil. Now their aim in using this slogan of sorts- which was a simplification of positions at various levels of government and overlooking a number of realities- raises a potentially important point today: that the revenues of non-renewable resource production need to be shepherded carefully, lest a real opportunity be lost. In the years since that campaign we see how the potential behind that campaign and that argument was lost and I’m not here to revisit the decisions made or their impact.
The Government has recently introduced legislation that would open up oil exploration and eventually production in the Falkland Islands. The value of this potential reserve is likely measured in the billions- representing significant revenue for the Treasury and to the businesses involved in exploration, in extraction, in refining, and in export. But what this Government is looking to do is not, like previous Governments, use this money to prop up a budget. That has been a mistake that has been made by Labour and Conservative Governments alike. Instead, we’re using the funds to establish a national investment reserve- a national fund that will be available to turn that revenue into meaningful and lasting investments for the British people, for British entrepreneurs, and for British communities.
This is hardly a new idea- these national funds, supported by commodity revenues, have a history dating back decades. While Kuwait was a British Protectorate, the Kuwait Investment Authority was established, using oil revenues, which was designed to not just put revenues into the budget to make targeted investments in the country and around the world. The initial investment has grown, over the last 40 years, into billions and billions of pounds in investments. So we know, even from our experience, how these systems can be best set up, how they can best be safeguarded from misuse, how they can best benefit those that they are meant to serve.
And while this fund will be government-managed, it will not be tied to the political whims of whoever is in charge in Westminster, but rather to objective measures based on the value of investments, the benefit those investments will have on the people and on the community, and the opportunities to create jobs and business opportunities. Of course, there will also be a return on that investment- to make sure that this fund can continue to grow and continue to be there to support necessary projects for the future.
As this Government sets up the investment fund, we’ll be looking for more commodity revenues to add to this pot to ensure that our ability to invest in the British people, in British business, and in British communities continues to grow. We’ll make sure that these investments span the entirety of the United Kingdom so that there’s fairness among the regions that could benefit fro and that need the investment more.
I don’t think that I need to highlight the benefits of investment- and particularly the levels of investment that this fund, properly establishing and properly managed- to our country. We’ve seen the benefits of previous Conservative Governments to promote productivity growth from a time that the UK were stuck in economic doldrums of the early 1970s. We've seen the benefits of using expansionary policies in capital investment spending to create jobs and increase wages as a means to combat recession. It is our new investment fund that will let us take the next step. Billions of pounds in future revenue from the Falklands, and then from the revenue on those investments after that, all ring-fenced for future development in the United Kingdom. Funding for new housing- which will need to be built by British business. Funding for new transportation and communication and energy infrastructure- again that will need to be built by British business. And funding for new businesses that will completely transform the world that we don’t even know what it is yet- all safeguarded against raiding by current and future Governments. All there for the United Kingdom when it is needed. And it's there without us having to raise rates on businesses or on consumers- it allows to again be fiscally responsible while till providing great opportunities for growth, investment, and expansion.
We will make sure the investments in this fund match up with our national priorities: that we’re investing projects that can create jobs and support businesses here in Britain, that we’re ensuring fair access to wages, that weren’t not supporting child labour or apartheid regimes, and that we’re acting as fair environmental stewards. These investments will be about making lives better in Britain while ensuring a fair rate of return, but we will not be putting profits over people when we choose our lasting investments.
These are the kind of policies that turn the short-term opportunities of oil exploration into long-term growth- and in a way that is sustainable and not subject to the whims and the winds of political change. These are the kind of policies that support businesses, that support workers, and that support our communities. We’ve seen around the world- and even here in the UK- what happens when you focus on the short term. The SNP, for all their successes and faults, and whatever you think about them, helped to show us that. And maybe we shouldn’t have waited as long to do what we’re doing now. But this Government is not about to let this opportunity go to waste- it’s the UK’s oil, and it should be there to help all of us move towards a prosperous future.
In 1974, the Scottish National Party increased their standing in Parliament by pinning much of their campaign to a unique argument: It’s Scotland’s Oil. Now their aim in using this slogan of sorts- which was a simplification of positions at various levels of government and overlooking a number of realities- raises a potentially important point today: that the revenues of non-renewable resource production need to be shepherded carefully, lest a real opportunity be lost. In the years since that campaign we see how the potential behind that campaign and that argument was lost and I’m not here to revisit the decisions made or their impact.
The Government has recently introduced legislation that would open up oil exploration and eventually production in the Falkland Islands. The value of this potential reserve is likely measured in the billions- representing significant revenue for the Treasury and to the businesses involved in exploration, in extraction, in refining, and in export. But what this Government is looking to do is not, like previous Governments, use this money to prop up a budget. That has been a mistake that has been made by Labour and Conservative Governments alike. Instead, we’re using the funds to establish a national investment reserve- a national fund that will be available to turn that revenue into meaningful and lasting investments for the British people, for British entrepreneurs, and for British communities.
This is hardly a new idea- these national funds, supported by commodity revenues, have a history dating back decades. While Kuwait was a British Protectorate, the Kuwait Investment Authority was established, using oil revenues, which was designed to not just put revenues into the budget to make targeted investments in the country and around the world. The initial investment has grown, over the last 40 years, into billions and billions of pounds in investments. So we know, even from our experience, how these systems can be best set up, how they can best be safeguarded from misuse, how they can best benefit those that they are meant to serve.
And while this fund will be government-managed, it will not be tied to the political whims of whoever is in charge in Westminster, but rather to objective measures based on the value of investments, the benefit those investments will have on the people and on the community, and the opportunities to create jobs and business opportunities. Of course, there will also be a return on that investment- to make sure that this fund can continue to grow and continue to be there to support necessary projects for the future.
As this Government sets up the investment fund, we’ll be looking for more commodity revenues to add to this pot to ensure that our ability to invest in the British people, in British business, and in British communities continues to grow. We’ll make sure that these investments span the entirety of the United Kingdom so that there’s fairness among the regions that could benefit fro and that need the investment more.
I don’t think that I need to highlight the benefits of investment- and particularly the levels of investment that this fund, properly establishing and properly managed- to our country. We’ve seen the benefits of previous Conservative Governments to promote productivity growth from a time that the UK were stuck in economic doldrums of the early 1970s. We've seen the benefits of using expansionary policies in capital investment spending to create jobs and increase wages as a means to combat recession. It is our new investment fund that will let us take the next step. Billions of pounds in future revenue from the Falklands, and then from the revenue on those investments after that, all ring-fenced for future development in the United Kingdom. Funding for new housing- which will need to be built by British business. Funding for new transportation and communication and energy infrastructure- again that will need to be built by British business. And funding for new businesses that will completely transform the world that we don’t even know what it is yet- all safeguarded against raiding by current and future Governments. All there for the United Kingdom when it is needed. And it's there without us having to raise rates on businesses or on consumers- it allows to again be fiscally responsible while till providing great opportunities for growth, investment, and expansion.
We will make sure the investments in this fund match up with our national priorities: that we’re investing projects that can create jobs and support businesses here in Britain, that we’re ensuring fair access to wages, that weren’t not supporting child labour or apartheid regimes, and that we’re acting as fair environmental stewards. These investments will be about making lives better in Britain while ensuring a fair rate of return, but we will not be putting profits over people when we choose our lasting investments.
These are the kind of policies that turn the short-term opportunities of oil exploration into long-term growth- and in a way that is sustainable and not subject to the whims and the winds of political change. These are the kind of policies that support businesses, that support workers, and that support our communities. We’ve seen around the world- and even here in the UK- what happens when you focus on the short term. The SNP, for all their successes and faults, and whatever you think about them, helped to show us that. And maybe we shouldn’t have waited as long to do what we’re doing now. But this Government is not about to let this opportunity go to waste- it’s the UK’s oil, and it should be there to help all of us move towards a prosperous future.
Victor Wolfe MP
MP for Stirling (1983-) | Conservative
Chancellor of the Exchequer (1992-)
MP for Stirling (1983-) | Conservative
Chancellor of the Exchequer (1992-)