Friday, 28 February 2014

Scotland's oil

Only Scotland could be afflicted by a plague of oil.

Every country that has discovered oil beneath its soil or waters has reaped huge financial benefits, except Scotland.  Of all the oil-producing nations in the world, only Scotland has seen a fall in the living standards of its people. 

Since oil-fields were discovered 40 years ago in the Scottish sector of the North Sea, the resource has generated around £300bn for the Westminster Treasury.  Successive UK Governments squandered the wealth. 

Norway, which discovered oil in its sector of the North Sea at the same time as Scotland, has used the resource to ensure Norwegians have one of the highest standards of living in the world.  In addition, Norway has invested part of its oil wealth to produce a sovereign fund that currently stands at around £600bn: profits and taxes from the oil and gas industry increase the fund by £600m a week.  Scotland, whose oil wealth has been managed by Labour, Tory and now Tory-Lib Dem Governments in London, has no sovereign fund and currently has growing numbers of its citizens dependent on handouts from foodbanks.

Just a few months ago, the Tory-led Westminster Government (and its British Unionist partners in Labour and the Liberal Democrats) told us an independent Scotland was economically unviable because the oil in the North Sea was running out.  When professionals in the oil industry revealed that, in fact, there are around 24-billion barrels of oil still to be extracted from fields in the Scottish sector of the North Sea (with a wholesale value of around £1.5trillion), the British Unionists changed tack.  Last week we had Tory Prime Minister David Cameron telling us that an independent Scotland was too wee to manage such a vast amount of oil.  Perhaps Mr Cameron should take a trip to small, independent Norway and explain to them the ‘logic’ he applies to Scotland.

Oil is a finite resource, so of course it will one day run out, but successive British Governments have been predicting the end of Scottish oil almost since the day it was first piped ashore.  In the 1970s Labour and Tory governments told us it would be long-gone by the late 80s.  In fact, not only are there vast quantities still to be extracted from the North Sea (taking anything up to another 40 years) oil fields have also been identified west of Shetland and potentially in the Firth of Clyde.  The fields off Ayrshire were identified in the 1980s but exploration was halted by the Ministry of Defence in London because the oil lies beneath channels used by the UK’s nuclear submarines heading to and from the Clyde base at Faslane.

Back in the mid-1970s, at the time we were being told Scottish oil was running out, Labour and Tory governments in London also started the ‘subsidy-junkie Scots’ line, which claimed the people of Scotland were reliant on handouts from English taxpayers.  The line was enthusiastically taken up by the British media and still forms part of the anti-independence argument today.  However, even 40 years ago British political parties knew the ‘subsidy-junkie Scots’ line was a blatant lie.

In 1974, as support for the SNP grew, the then Labour Government sought a paper from Whitehall civil servants that would expose Scottish independence as unviable and hole the SNP ship below the waterline.  The task of producing the paper was given to a Scot working as an economist in the Treasury, Professor Gavin McCrone.

The professor carried out an investigation and duly presented his paper – ‘The Economics of Nationalism Re-examined’ – but it was not what UK Ministers wanted to read.  The Labour Government classified the McCrone report as ‘secret’ and buried it in the Whitehall vaults.  Its contents only became public 30 years later in response to a Freedom of Information request submitted by the SNP.

In 1974, as Westminster political parties told Scotland we were an economic basket-case dependent on financial handouts from England, they knew the opposite was the case.  The McCrone report included the following clear statements:  

·         “What is quite clear is that the balance of payments gain from North Sea oil would easily swamp the existing deficit whatever its size and transform Scotland into a country with a substantial and chronic surplus.”

·         “The country [Scotland] would tend to be in chronic surplus to a quite embarrassing degree and its currency would become the hardest in Europe, with the exception perhaps of the Norwegian kroner.”

·         “An exchange rate of £1 Scots to £1.20 sterling within two years of independence therefore seems quite probable.”

·         “An independent Scotland could now expect to have massive surpluses both on its budget and on its balance of payments and with the proper husbanding of resources this situation could last for a very long time into the future.”

·         “Thus, for the first time since the Act of Union was passed, it can now be credibly argued that Scotland’s economic advantage lies in its repeal.”

·         “Britain is now counting so heavily on North Sea oil to redress its balance of payments that it is easy to imagine England in dire straits without it.”

For 40 years successive UK governments – Labour, Tory and Tory-Lib Dem – have pocketed every penny of the billions-of-pounds generated by Scotland’s oil.  Throughout those four decades the same British Unionist parties, and a compliant media, have told Scots we are too wee, too poor and too stupid to govern our own country.  They lied to us in 1974, they have lied to us for 40 years and they are still lying to us.

David Cameron’s message of last week regarding Scottish oil was that a country as small as Scotland could not cope with administering such a vast resource.  The reality of Norway over the past 40 years proves the Tory Prime Minister was lying.

Cameron’s line, supported by his British Unionist partners in Labour and the Liberal Democrats, was that Scotland should reject independence and, instead, should allow Westminster to continue banking the billion-pound cheques generated from Scotland’s natural resources in the North Sea (and west of Shetland and in the Firth of Clyde).

Oil would only form part of the economy of an independent Scotland, but it would be a very lucrative part.  As an oil-rich nation of just 5-million people – not unlike Norway – Scotland could be transformed from a country of high unemployment and poverty (and foodbanks) to one where every citizen enjoys a greatly-enhanced quality of life and standard of living.  That is not empty pro-independence rhetoric.  The provable data is there for everyone to see in the shape of vibrant, independent Norway.

Also now there for everyone to see is the McCrone report – the paper that revealed just how successful an independent Scotland would be, and which British Unionist governments in London buried for 40 years.

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