Stuart Cosgrove: Westminster failed Scotland's youth by squandering oil wealth

Last week saw the launch of The Scottish National Investment Bank, the UK’s first mission-led development bank, with an objective to support Scotland’s transition to net zero by 2045. The bank will be capitalised by the Scottish Government with £2 billion over 10 years, small beer by comparison with the wealth of state investment funds around the world, but at least it’s a start.

Then there was the historic announcement that Scotland will lead the world in providing free sanitary products for women. MSPs unanimously approved a bill brought forward by Labour health spokeswoman Monica Lennon, bringing in the legal right of free access to tampons and sanitary pads. It was a victory on several fronts, for women, for the war on poverty and, behind the scenes, it was an achievement for the parliament’s capacity to unite behind core values, even when the political landscape is deeply divided.

Those that like to argue that the ­constitutional question is crippling ­Scottish political society were conspicuously absent when news of the Period Products (Free Provision) Bill travelled around the world. It was uplifting to see Scotland ­respected and praised so ­fulsomely by other nations.

All of that brought hope surging to my heart until I read a weekend interview in the Financial Times, which slammed home the missed opportunities that have passed Scotland by. Whatever chunks of our own tax receipts or our share of international debt that Chancellor Rishi Sunak currently hands out to Scotland, it is buttons compared to the wealth that has been squandered in decades gone by.

Until I came across the interview, I knew next to nothing about Yngve Slyngstad, the outgoing manager of Norway’s Sovereign Wealth Fund, a quietly thoughtful man who occupied a role, for which sadly there is no equivalent in ­Scotland.

The Financial Times describes the fund as “a fairy tale of global finance” estimating that in less than 25 years of investing the energy riches of the North Sea it has grown into a fund handling over $1.2 ­trillion.

Norway’s Sovereign Wealth Fund is so secure and well balanced that it currently owns 1.5% of the world’s publicly traded companies. No other small country ­exerts such a powerful role in global capital and attracts so much commercial ­interest. Across the decades and the dark days of the McCrone Report, when Scotland has sent most of its offshore wealth to be spent according to Westminster’s agenda, Norway has steadily and efficiently built up its national wealth for a greater good.

Cumulative value is at the heart of the Norway model and although it once derived revenue from oil those day are now in the rear-view mirror. Most of the income now comes from gains on bonds, shares and property. Slyngstad cautions those he meets who call it an oil fund, ­reminding them ironically that Norway has not spent any of its revenues from oil, so they may as well call it a fish fund. What they have done is invested their wealth to grow around the world and away from oil-based production.

It is a story that amazes and angers me in equal measure. I am not prone to being jealous of neighbours but when it comes to Norway’s sovereign wealth, a spasm of resentment surges through me and makes me even more angry about the cruelty that deindustrialisation meted on Scotland and how our assets were mishandled by successive Westminster governments.

Unionists recoil at even the most cursory mention of the Norwegian Sovereign Wealth Fund which is why they are so keen to sneer at oil, which we all know is variously running out, only has few years left, is now in places too difficult to extract and in any case is no longer relevant in an ecologically balanced society. What they cannot quite explain is why a ­country of just over five million people have managed to make such a success of managing their affairs and yet Scotland could not. It must surely be the tired old mantra of “too wee, too poor, too stupid”.

Over the last month I have been logging versions of a newly minted unionist myth, which through its tangled lineage brings us back to Norway. Firstly, Andrew Neil and then the Spectator’s Fraser Nelson recently made exaggerated claims about life expectancy among males in Glasgow. Put crudely, they claimed that men were dying at rates that were worse than sub-Saharan Africa, although to be fair to Nelson, he was much more specific, claiming Glasgow’s death rates were worse than Rwanda. It transpired that the data they were using was from the 1970s and was based on a micro-survey of the Calton ward in the city of Glasgow, where historically homeless hotels like the Great Eastern were situated.

There is no hiding the impact that alcohol and drug abuse have had in Scotland’s poorest communities but to extrapolate those figures and claim they represent current Scotland, or are solely the fault of the SNP government, exposes a mixture of fear and loathing in the resentful minds of London’s expatriate Scottish unionists.

Given that Neil and Nelson are so informed about Scottish data in the 1970s they could perhaps ­explain where the wealth generated by oil went, how it was spent, what benefits it enabled, and to whose advantage? What seems incontrovertible is that it went to a Treasury that had none of Norway’s skills in investing.

Although Slyngstad has managed huge growth in the Norwegian Sovereign Fund he is not remotely like the superstar fund-managers that are so feted by risky investors. He is a spartan man, highly cautious and closer to a high-ranking civil servant than to most private equity managers. There is pressure on him from Norwegian politics and democracy to avoid reckless risks and to invest in line with ethical standards, which is monitored by an external ethics council. The Fund has ­already divested its money in over 300 companies that failed to meet their ­ethical standards, some for failing environmental requirements, some for speculating in palm oil and others for a failure to deal with issues around child labour.

This is another missed opportunity that has passed Scotland. We try hard around the edges but the chance to be a more ­effective good citizen in the global markets is one that we can only dream of. The Norwegian fund is a leading advocate of ESG investing, one of the buzz-terms of contemporary market standards. ESG is an abbreviation for environmental, social and governance, the three principles that underpin ethical investing.

The Norway Fund, like most other global investments, has taken a pounding from the pandemic and the impact on economies everywhere and previously it has had setbacks in times of economic downturns, but the story is one of slow, steady and socially conscious growth rather than losses.

When asked by the Financial Times to future gaze, Slyngstad pointed to the ­power of youth describing them as “the luckiest generation of all time” because they will be the custodians of the big changes yet to come, changes that he suggest will be “seismic and life-changing”.

It is a view I share wholeheartedly and when our young people take charge of the reins of modern Scotland, I hope they can find a way to forgive the generation that has categorically failed them.

The days of squandering our wealth and delegating its investment to others are over and I already sense that the next generation will insist on that. Bring it on.