Why doesn’t Britain have a Sovereign Wealth Fund?

It’s a question asked by Ross Clark in the Spectator,* and in view of the money that Britain now needs to borrow, it’s an urgent one. As we don’t have one in the UK, British readers are entitled to a brief resume. Basically a Sovereign Wealth Fund is like a Private Equity fund, except it is owned by the Government on behalf of all its citizens. The largest in the world is Norway’s. Using their share of North Sea Oil profits, their fund has grown to $1186.7 billion. That’s about £160,000 per citizen. If you were Norwegian, last year you would have earned £26, 400 without getting out of bed. Writing in the Spectator* Ross Clark makes a convincing summary of the arguments for and against-and comes down on the side of for.

We at LSS see a potential here for another blame game, something we prefer to avoid. So, in place of the dubious pleasures of hindsight, let’s go back to how Mrs Thatcher and her ministers saw things at the time. It was an age when the overwhelming urge was to roll back the state. The aim was to cut government borrowing and to privatise wherever possible. To lower taxes and get people to work harder by removing state featherbedding. This ideology was especially prevalent in the so called Anglo-Saxon economies, but you could find variants in many countries. Like every other ideology, the extent to which it has worked can be debated. But it is intellectually defensible. So how could Mrs Thatcher defend all these beliefs if she then set up a powerful state- owned agency like Norway’s? She was never intellectually dishonest.

So, the oil’s gone, the milk’s spilt, let’s all stop crying and ask-where can we get the money to set one up now? Well, here’s one answer. Britain still owns many overseas territories. Some are a bit remote and it seems unlikely that other powers would want to acquire them, beautiful though they are. But some, like The Falklands (Malvinas to our world-wide readers) and Gibraltar are very sought after indeed. And when someone wants something, they will pay a price. Now we are not calling for their immediate selling-off. But we do think that an audit of their value to the British Economy might be fruitful. Especially when compared to the potential value of a Sovereign Wealth Fund, paid for by their sale.

If all of this sounds fanciful, do not forget how the hard-headed British Governments of the eighteenth century traded the sovereignty of islands like Corfu and Menorca. There were no sacred cows for them, just profits and losses. In the last century, the Government of Winston Churchill felt free to trade bases and land across the world in return for US Destroyers. In many ways, our crisis now is not so different from that of 1940. It is common to talk of the legacy left by that generation. Is this a way for us to leave one of equal magnitude?

https://www.theguardian.com/commentisfree/2014/jan/13/north-sea-oil-money-uk-norwegians-fund

we were worried about the link to Ross’ article, so here it is again tps://life.spectator.co.uk/articles/britain-needs-a-sovereign-wealth-fund-like-norways/

#sovereignwealthfund #margaretthatcher #winstonchurchill #falklands #malvinas #norway #uk #rossclark #spectator

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