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Economic Case for an Independent Scotland - IFS Report

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http://www.ifs.org.uk/comms/r88.pdf   The institute of fiscal studies (IFS) today published a paper based upon the UK Government Quango the office of budgetary responsibility (OBR) forecast over the n

http://www.rigzone.com/news/oil_gas/a/130225/Scotland_Exported_48B_of_Oil_Gas_in_2012     I am going to vote yes to independence rather than vote for a continuation of the status quo.   But I know it

Well having read it along with the Gaurdian report it seems strange that the BBC has completely blanked the story. shock   BBC are biased

Are more fancy picture painting , if anyone thinks a new country with no history of borrowing will pay the same as Germany is deluding themselves and others .

I don't think it will pay much more but even half of one percent will affect us

Then not one mention of Scotland having to borrow money from someone else but want to set up a oil fund 

Would anyone out there go to your bank manager and ask to borrow money every month to set up a savings account it's utter madness

And as ever if's it will just the same as before if we vote yes ,if so why vote yes?

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The Bank of England was nationalised by the UK in 1946. This is confirmed on their website.




The United Nations Vienna Convention on the creation of new nation state from a larger state that the assets and liabilities should be split on the same basis were one nation does not claim continuing status.





The basis of the argument that Scotland partly owns the Bank of England is based upon it should therefore inherit its fair share of that assets as it should share any UK debts. The Bank of England has the UK gold Reserve amongst other assets.


Although Barclays was not bought out by the UK Government it borrowed more from the US Federal Reserve than any other UK bank $868 billion and sought £7.3billion mostly from the Middle East to wheather the Banking Crisis.




The purchase of ABN Amro, outbidding Barclays, is often sited as the straw that broke the camels back and the UK Government lead by Gordon Brown and Alistair Darling should never have let it happen according to the UK parliament select committee.




A lot of people own the house they live in rather than rent but do so by having a mortgage secured on the house. A lot of people who have a mortgage also have a savings accounts or owns stocks and shares. The principle being you finance your capital expenditure over the life time of the asset will paying for your day to day expenses out of revenue and set aside the surplus to savings. The same principles can apply to countries as well.


Risk to a lender is not solely based upon past lending history but ability to pay debts. Borrowing for capital investment rather than day to day expenses carries the least risk.


The UK Government is now paying £1 billion a week in interest charges on loans and is still borrowing to fund revenue expenditure.



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Only $3 a barrel to extract oil from the Clair Ridge field according to BP's own promotional video puts a significant whole in the assumption made at the Cunningsburgh Show yesterday by Ruth Davidson, Alistair Darling and the OBR assumptions used in the economic report that future oil reserves will be significantly more expensive to extract reducing profits and thus tax revenue.





Further as the BBC article also highlights the production from this field is significant, 640 million barrels, and is further evidence the OBR assumption that there is only 10 billon barrels of recoverable remaining is a gross under statement of facts.


The UK Government has form on concealing and with holding data on the impact of oil as the 1974 McCrone report illustrates.




The current price of North Sea oil is $104 at time of writing in link below. Government income from oil is based upon profit so at a cost of only $3 each barrel has a gross profit of $101. The tax charged on oil is estimated to be roughly 62% for new fields.



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Xcite Energy announce oil development in the Bentley Field starting production in 2016 and lasting to a least 2050 and using new technology to ensure low cost extraction system is used provided further evidence that oil is not running out soon and the OBR forecast are to conservative.






As all Shetland know with the ongoing development at Sullemvoe that Total will be bringing on two new field one of which contains 20% of the known gas reserves.



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A 7% budget surplus worth £12 billion in 2020 awaits an Independent Scotland, the Sunday Times, reported yesterday. Sizeable budget surplus are forecast for well in to the future with the ability to create a self sustaining oil fund.




This is based upon a report by the a political organisation N-56. The full report and short video can be found on their website.




The report as other have concluded believe both the OBR and UK Government are significantly under playing the amount of oil reserves in the North Sea. The OBR assumes just under 10 billion of barrels being extracted by 2040 generating £57 billion in tax receipts. The report uses industry estimates that there is 24 billion barrels of oil to extract generating £365 billion in tax receipts.




Past performance of successive UK Governments evidence a pattern of concealing the facts when it comes to North Sea oil.




These forecasts surplus assumes paying for all existing commitments on Pensions, NHS, free universal education and all the other commitments and then still having funds available to invest base upon local priorities. Thus ending the austerity agenda from Westminster that is currently scheduled to last well in to the 2030's.

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Oil is it lots of oil or lots and lots and lots of oil that is out there to supply jobs for over 100 years?


Well those in the industry are forecasting 100 years of work left and well lots and lots and lots of oil may be a conservative estimate.



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The only thing certain about oil is that if the people of Scotland have the good sense to vote YES on the 18th of September then England,s oil boom is finished. I expect that's why Westminster politicians are so terrified of Scottish independence.

Lets face it in the 1970,s before Westminster had Northsea oil to prop up their economy the IMF were helping Mr Healey run the treasury.  

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£54 billion shortfall in the OBR economic forecast for tax receipts in 2013-14 leading to higher public sector borrowing than planned and continued austerity measures that are driving more people in to poverty.




This confirms three things:


1. Economic forecasts are not tablets of stone of fixed certainty of what the future hold.

2. IFS report heavily based upon OBR forecasts is therefore unlikely to be correct and the IFS accept this as they warned it is inherently difficult task.

3. That all tax receipts are volatile in nature, not just North Sea Oil tax receipts as they only account for £4 billion of the shortfall.


This tax gap of £54 billion is of course greater than the entire Holyrood budget for Scotland.

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