Saturday, September 25, 2010

Rediscovering Oil - A From Rags to Riches Story

This week I worked on a three part series on oil for Newsnet Scotland. The first part was published today. Here it is:

Rediscovering Oil - A From Rags to Riches Story

by Alex Porter

In my last Newsnet Scotland article, I argued that the bankruptcy and rapid decline of Britain has transferred, in terms of the Scottish constitutional debate, the burden of proof of economic viability from nationalism to unionism. For nationalists to really ramp up the pressure on the unionist case though, it has to be implicitly understood by the Scottish electorate that independence does indeed offer a sound, economic path to the future.

For the SNP, the trump card in its economic prospectus should have been the enormous wealth being accrued from North Sea oil. Scottish unionism though exploited its institutional advantages and so was spectacularly successful in getting and keeping the subject of oil off the political agenda.

I believe that unionism no longer has that privilege. In the debate over Scotland’s economic future, North Sea oil is about to take the top seat at the table.

How? Oil is about to become the world’s number one subject. More specifically ‘peak oil’ – its effects will alter the course of the world’s history. As a serious oil producer Scotland’s global profile will thrive because of it. The facts will be clear – the oil off Scotland’s shores will be considered important not just for the UK’s economic stability but an important contributory factor in European and international security.

In a short space of time then, the case that North Sea oil is so insignificant as to be of no value to the establishment of a successful independent Scotland will be instantly recognised by the Scottish electorate as what it always was: nonsensical, political propaganda. Consequently, unionism will face a crisis of credibility.

Part 1: Out of Sight, Out of Mind

One question which has puzzled many observers is just how did the issue of North Sea oil disappear off the radar of Scottish economic history? In Norway, any and all oil stories are poured over by their national media. Norwegians know just how important oil has been to their economy and have established an extremely successful oil fund which is being set aside to be enjoyed by future generations. Their finance minister, Sigbjørn Johnsen, was quoted by the Norwegian newspaper, Aftenposten, talking about the oil fund on Tuesday: “It’s kind of like a dream…The size of the fund exceeds the expectations of most of us.”

In pounds, Norway’s oil fund is worth £316 billion which is enough to fund Scotland’s public expenditure for 10 years without collecting taxes. The future is good if you’re Norwegian but if you live in Scotland, with an economy which is in surplus, the future offers debt and massive public sector cuts – which is, in effect another bailout of the insolvent City of London. In terms of economic and social justice, the contrast between Scotland and Norway could not be more dramatic. Last week a hard-hitting new study by the Joseph Rowntree Foundation showed that child poverty in Scotland had increased at double the rate of that for England during the last year of the recession.

While the Norwegian media disseminate the oil story among her prospering population and beyond, in Scotland - a serious oil producer - you hardly hear a peep.

How could that be? The issue of North Sea oil has been brushed under the carpet.

Scottish unionism’s principle strategy against nationalism was in presenting Scottish independence as economically unviable. Scotland could not afford to go it alone. That put the burden of proof of economic viability onto nationalism. The monumental wealth that would come from oil was clear and well understood by unionists; they knew that the enormous wealth flowing in from the North Sea would place the case for an economically viable, independent Scotland beyond reasonable doubt. This contradiction had to be dealt with and ruthlessly.

The UK government had commissioned the now infamous McCrone Report. Its conclusions were astonishing:

“This paper has shown that the advent of North Sea oil has completely overturned the traditional argument against Scottish nationalism. An independent Scotland could 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.”

The McCrone report wasn’t published until recently (it can be read online). The fact of its suppression though is damning evidence that Scottish unionism was complicit in the betrayal of the people of Scotland for 30 years. A sure sign of where its loyalties don’t lie.

McCrone also concluded that the income from oil meant Britain had to seriously attend to the matter of poverty in Scotland, especially on the West central belt or face a constitutional crisis:

“If, in five years’ time North Sea oil is contributing massively to the UK budget, while the economic and social condition of West central Scotland continues in the poor state that it is today, it would be hard to imagine conditions more favourable to the growth in support of the nationalist movement. Very determined steps to urgently transform economic conditions in Scotland will therefore be necessary and the Scottish people will have to be persuaded that their problems really have received the attention and expenditure they deserve if this outcome is to be avoided.”

This was Scottish unionism’s opportunity to demonstrate that Scotland’s future social and economic well-being were its primary concern. They had the choice; publish the report and eliminate poverty in Scotland or delist the report and carry on as before. The McCrone scandal then shines a very, bright light on the historic loyalties of Scottish unionism and they don’t lie with the citizens of Scotland.

The SNP tried to keep the subject alive with its ‘It’s Scotland’s Oil’ campaign. This worked to an extent, but the unionist media closed down the story. Unionism via the trade-unions and their captured media suppressed the campaign. Oil wealth should be shared and was unimportant anyway so Scotland was informed.

Over the years nationalists have tried to resurrect the story, but always in the context of a hypothetical debate on an independent Scottish economy. The subject of what North Sea oil meant to the Scottish economy was buried in a Whitehall cemetery.

Tomorrow, part 2: Stop Scotland – Britain wants to get on!


sm753 said...

“HC Deb 23 October 1973 vol 861 cc488-9W 488W

§ Mr. Sillars

asked the Secretary of State for Trade and Industry what are his latest estimates of the output from North Sea oil by 1980.

§ Mr. Tom Boardman

The report on production and reserves of oil and gas on the United Kingdom Continental Shelf which I presented to Parliament in May forecast a most likely range of oil production in 1980 of 70 million-100 million tons. Recent discoveries should ensure that the lower end of this range is reached; with further discoveries in the next year or two it should be exceeded.”

But you're claiming it was all "hidden" and "lied about".

I could go on. There are Hansard quotes about the financial impact of North Sea oil as well as the physical ones. You can look at the Conservative and Labour manifestoes for the 1974 elections; they quite openly refer to the magnitude of the North Sea.

The SNP lost those elections fair and square, but is still trying to invent reasons for it.

Alex Porter said...


Just because you get an answer in the house of commons doesn't mean that it's going to make it on to the mainstream media, especially not in Scotland.

The covering up of the 'McCrone Report' is a matter of public record.

Facts are annoying sometimes eh?

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