In our previous five chapters on the UK’s management of Scotland’s share of North Sea oil various themes emerged.
First, Scottish people were likely to have been misled by UK Government Ministers about the economic potential of Scottish oil wealth.
Second, Westminster’s fanaticism concerning the virtues of free markets led them to privatise state-controlled oil companies.
Third, Westminster’s reliance on these multinational companies resulted in a pitiful deal on government share of revenue from the exploitation of oil and gas reserves, in comparison to Norway’s management of almost identical assets.
Fourth, Westminster’s obsession with maximising production as quickly as possible regardless of the price of oil reduced government take even further.
Fifth, the oil tax take of £400 billion (large yet perhaps half or even one-third of what it should have been) was squandered by Westminster on investment in London, reducing and paying off interest on the UK Government’s national debt.
Sixth, the disproportionate nature of the Scottish ownership of the oil and gas extracted from the North Sea and handed to oil companies and Westminster effectively destroys any notion that Scotland still owns a share of the national debt.
Seventh, the Wood Review and the creation of the Oil and Gas Authority (OGA) as regulator myopically continued the practice of maximising production even when this leads to negative tax receipts to the Exchequer, yet is consistent with maximisation of economic recovery to the oil companies.
Eighth, given that 600,000 oil-related jobs were lost in 2016/17 why, oh why does the OGA not have as its main target maximisation of oil jobs and maximisation of economic recovery to the taxpayer, who after all owns the oil and gas?
Ninth, Scotland’s offshore region, thanks to oil companies and Westminster, is unacceptably being earmarked as a dumping ground for derelict contaminated towers of Eiffel Tower proportions.
Tenth, unless oil companies adhere strictly to their accepted commitment to restore the Scottish seabed at least cosmetically to its original condition, the decision of Westminster to grant a no-strings-attached tax allowance for undertaking decommissioning should be revisited.
Eleventh, the ethical and moral leadership that Scottish people expect from their government, and as exemplified by the SNP in banning fracking in Scotland, must take priority over short-term economic gain.
Twelfth, where national assets are being exploited and that includes use of Scotland’s unmatched beautiful glens, lochs and mountains, then Holyrood must have its hand on the tiller as clearly companies obsessed with maximisation of shareholder wealth cannot be trusted with the job.
Thirteenth, it is vital that Scotland assumes a world-leading role in promoting renewable energy and, yes, consider a moratorium on fossil fuel exploitation and certainly on nuclear energy generation.
And finally, the clear unequal treatment of Scotland in the oil and gas game has lessons for a range of inequality issues that the SNP should set about redressing!
Lessons from the North Sea Fiasco
The decks have been and are stacked against Scotland’s economic prospects. A London-centric Westminster government overinvests in the south of England and has utilised Scottish assets to do so. What should happen now? A definitive list of grievances that need addressing would fill a book of non-fiction status.
Scotland’s oil and gas has been grabbed by Westminster as a UK asset and the revenues have been invested in England. Just one example: investment in London’s airports has been astronomical. Londoners, as a consequence, enjoy cheaper flights across the world compared to flights from Scotland.
Brexit arose as a consequence of right-wing old Etonian members of the Tory Party demanding a referendum on the UK remaining part of the UK. These are the same disproportionately government represented class that have permitted Scotland’s Great Oil Swindle.
That demand was hyped up to fever pitch by the Tory press with their anti-immigration comments and wild claims about how much better off the National Health Service would be after leaving the EU. Frankly this Little England outlook must make the UK a laughing stock in the rest of the world. The blame for the consequent Leave vote rests with the Tory Party. The blame for the fall in the value of sterling rests with the Tory Party. The absence of a “money tree” apart from when buying the support of Ulster Unionists rests with the Conservatives. There should not be a day that goes by without an onslaught against the Tories for this damaging to Scotland situation.
How can one partner to the UK be taken out of the EU when it voted to stay in the EU? How can Theresa May deny another call for an independence referendum once the result of the so-called Brexit negotiations are finalised, given that a main plank of Unionist rhetoric prior to the 2014 referendum was that a Yes vote would leave Scotland outside the EU and a No vote would keep us inside the EU?
Arguably, the terms of the Brexit referendum were flawed. All partners should have had to vote to leave and if only England voted to leave they should have granted Scotland its independence and allow Scotland to remain part of the EU club.
In the same way that the UK’s GDP generating powers should not be delegated to the corporate sector, the Government should take its own decisions on interest rate setting and not rely on the Bank of England.
The value of sterling has been affected by quantitative easing and almost zero interest rates. Again, some corporate giants that deal in dollars will have seen their share values rise while the average citizen and public-sector worker now struggles to make ends meet. The Bank of England should, as the name says on the tin, speak only for England. If it wants to be a genuine national bank of the UK then it should change its name with immediate effect.
Disadvantaged Scots living in deprived areas and not helped by the bias in the educational system have a life expectancy that old Etonians would either fail to appreciate or be prompted to make wisecracks in Latin about dead bodies. This inequality could be reduced by paying a higher pension so that each individual receives the same total amount. The current system means the deprived in Scotland are subsidising the pensions of rich Londoners and old Etonians.
Finally, Holyrood should have absolute control of all economic activity within its offshore and onshore boundaries. The gleeful recent press and Westminster reaction to Norway’s national oil company, Statoil, declaring huge oil finds in the Moray Firth basin is the ultimate insult to the Scottish nation.
Effectively, this means Scottish oil will be boosting the Norwegian oil fund! And any tax paid by Statoil will go to Westminster. Come on Holyrood, how long can we let this situation continue?
If Westminster refuses to budge on this brief set of examples of what should happen to help reduce the inequalities in the current system – roll on another independence referendum after Brexit.