Tax Incentives

The Wall Street Journal posted an interesting story about North Sea Oil and Gas.

The big driving force behind the increased investment in the region is the UK’s new tax regime. This takes advantage of the substantial infrastructure that exists in the region. After all, you can offer all the incentives you want to find water in hell, but in doesn’t mean people will take them. But I think it does point out some of the benefits of having a political unit the size of the UK to manage Scotland’s resources.

Of course, if Scotland was managing its own affairs, it would have access to the infrastructure too, and could have the capacity to offer its own package of incentives. Alex Salmond seems to think Scotland can offer a generous tax scheme for companies. One can presume that all the companies investing in the North Sea have factored an independent Scotland into their investment plans, in which case it can be taken as a vote of confidence in Scotland’s perceived capacity to manage the North Sea oil and gas. Hopefully, this round of investment will have the momentum to maintain itself in an independent Scotland.

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