Before our last Party Conference, UKIP carefully considered all the ways in which Britain might want to use the (potentially large) proceeds and revenues from shale gas. Eventually we decided that the creation of a Sovereign Wealth Fund (along the same lines as that created by Norway with the proceeds of North Sea Oil) would be in the best long-term interests of all the British people.
I say we considered all the ways in which the proceeds might be used. But there was one way of using – or wasting – the proceeds of this energy windfall that we never considered. It never even crossed our radar. Because it was so blindingly stupid. Yet that (you guessed it) is exactly what the Coalition government seems to be doing.
Besides the direct economic benefits of shale gas, there is the additional indirect benefit that shale gas would allow us to discontinue our disastrous experiment with renewables (while at the same time reducing emissions of CO2, as they have in the US, if you think that CO2 emissions matter). Not only the profits from shale gas, but a vast saving on wasteful green subsidies which are undermining competitiveness and driving businesses offshore.
So what does the government propose to do? It wants to spend the proceeds of shale on green subsidies! It wants to pour good money down a black green hole. The sheer perversity of it is breath-taking.
I understand the pressure they’re under. Labour’s superficial and disastrous proposal for an energy price freeze has unfortunately struck a chord with voters, who don’t seem to have grasped the likely consequences. So this perhaps looks like a way to counter the Labour offer. But shale gas is our get-out-of-jail card. It can free us from the blind alley of renewables. But like those prisoners with the Stockholm syndrome, we’re not making a bid for freedom. We’ve been given the key to the door, but it seems we just want to lock it tighter.
Today, Norway’s Sovereign Wealth Fund is worth around US$750 billion, or about 150% of Norway’s GDP. This is a massive asset which will stand Norway and its citizens in good stead for generations to come. We are in a position to do the same.
So the choice is: UKIP’s offer of a British Sovereign Wealth Fund. Or the Coalition’s plan to squander the windfall on worthless and damaging green projects. Take your pick.