1970s deja vu as Westminster oil figures are questioned


   By a Newsnet reporter

The SNP have raised the question of whether the Westminster is again deliberately misleading the Scottish public as it did during the 1970s, as the latest Westminster forecasts for Scottish oil revenues remain significantly below those produced by the oil industry itself.

Just last week former UK Chancellor Denis Healey, now Lord Healey, admitted that during the 1970s Home Rule referendum campaign, the British Government lied to the public about the potential for North Sea oil in case awareness of the reality of Scotland’s wealth encouraged pro-independence sentiment.

Mr Healey also suggested that the UK Government was currently engaged in similar tactics as Scotland debates its future in the run up to next year’s independence referendum.

Mr Healey’s suggestion that the UK Government is revisiting its misinformation tactics from the 1970s finds support in the figures recently released by the UK Office for Budget Responsibility for the future output of the oil and gas sector.  The OBR’s figures are significantly lower than those produced by the oil industry.  The UK Government has not given an explanation for the large discrepancy.

In line with the latest industry forecasts, the Scottish Government estimates that by 2017 production levels will rise by a third on current output, increasing from 1.5 to 2.0 million barrels of oil per day – while the OBR assumes that production will remain largely unchanged from current levels in future years.

Scottish Government analysis shows that the oil and gas industry is likely to generate between £41 and £57bn in tax revenue between 2012-13 and 2017-18. Again these figures are solidly based on industry estimates.

Meanwhile, the latest OBR figures – based on estimates of oil production from the UK Department of Energy and Climate Change – estimate the industry will generate the much lower figure of £33bn in the same time period.

However the higher industry and Scottish Goverment figures are conservative estimates.  Malcolm Webb, the chief executive of industry body UK Oil and Gas, told a conference in Aberdeen earlier this month that he believed the industry’s figures for remaining oil potential to be significantly underestimated, leaving the discrepancy between reality and the UK Goverment’s figures even greater.

Speaking to Holyrood Magazine last week, former Chancellor Denis Healey said tax receipts from oil are the biggest factor behind Westminster opposition to independence in next year’s referendum, which was also the case in the 1970s – and that Westminster parties are “worried stiff” about Scots voting Yes because of the valuable income from the North Sea.

In 1974 Professor Gavin McCrone wrote a report for the UK Government which stated that Scotland would have had an “embarrassingly large tax surplus as a result of the North Sea oil boom”. Successive Westminster governments kept this information under wraps until it was eventually released in 2005.

Mr Healey’s admission that Westminster was deliberately lying about the true value of Scotland’s oil revenues confirms a previous admission from another former cabinet minister from the 1970s.

Former Foreign Secretary Anthony Crosland, who died in 1977, admitted in his posthumously published diaries that UK Treasury officials plotted to plant false stories in order to weaken growing Scottish demands for Home Rule.

Mr Crosland said that Treasury officials had suggested planting stories which claimed that in the event of Scottish independence Orkney and Shetland could remain a part of the UK, taking a large part of Scottish territorial waters with them.  The Treasury officials intended to pass the stories to sympathetic journalists and politicians in order that they could not be attributed to the UK Government.

In scenes remarkably reminiscent of Mr Crosland’s admission, in January this year the anti-independence media gave prominence to a story claiming that if Scotland voted for independence, Orkney and Shetland could choose to remain a part of the UK. 

Despite the UK Government’s attempts to raise the spectre of partition, a recent opinion poll for the Aberdeen Press and Journal newspaper found that the people of the Northern Isles overwhelmingly regard themselves and their islands as Scottish.

Studies by legal experts have also confirmed that even in the unlikely event that Orkney and Shetland remained a part of the UK after Scottish independence, this would have no significant impact on Scotland’s right to exploit resources lying under the country’s continental shelf or Scotland’s potential revenue from oil and gas.

Commenting on the unexplained discrepancy between UK Government forecasts and estimates originating from the oil industry, SNP MSP Maureen Watt said:

“When you take these figures into account along with Lord Healey’s comments, it is clear nothing has changed since the 1970s – Westminster continues to downplay the value of Scotland’s oil.  This is another case of history repeating itself.

“With the UK government’s oil forecast at odds with the industry’s, there is a real sense of déjà vu when we think back to how Westminster buried the McCrone report – a report that oil and gas would turn Scotland into one of the wealthiest and most financially secure nations on the planet – at the same time as telling us that revenues would be lower than expected and would soon run out.

“Lord Healey’s admission that the Treasury hid the truth about the value and longevity of Scotland’s oil and gas resources begs the question – how can we believe a word they say now?

“Personally I would trust the forecasts of those actually working in the industry rather than those of a UK Government which has a clear and consistent track record of trying to talk the industry down.

“Scotland’s finances are consistently stronger than the UK’s, over half of the North Sea tax revenues are still to come, and our oil and gas assets are worth £1.5 trillion or even more.

“But of course, it’s a complete myth to say that we are reliant on oil. Even without this fantastic resource, Scotland’s economic output is almost identical that of the rest of the UK. Oil revenues make up around double the share of Norway’s total tax revenue compared to Scotland, but no one is telling the Norwegians that they are too wee and too poor to be a successful independent country.

“We have seen an historic 30-year high in investment in our oil and gas industry, with £11.4billion invested last year – expected to rise to at least £13bn this year.

“Only a Yes vote next September gives Scotland the opportunity to make the next four decades of oil and gas work for our country and for future generations.”

Meanwhile, after being asked on Good Morning Scotland on Saturday what she thought of Denis Healey’s revelations that the Treasury purposely played down the value of Scotland’s oil reserves in the 1970s because of the possibility of Scottish independence, shadow Scotland Secretary Margaret Curran claimed she didn’t know anything about it.  Ms Curran was then forced to concede that she “would never have colluded with an argument that didn’t make Scotland strong.”

Commenting, SNP MP Angus MacNeil said:

“Margaret Curran’s initial remarks about Lord Healey’s revelations display a remarkable insight into the world of the No Campaign. To admit complete lack of knowledge of this issue is astonishing and begs the question of what else the No campaign wants to ignore and keep from the people of Scotland?

“Is the Labour Party also seriously saying that we should trust the current Tory-led government with Scotland’s oil wealth? Considering how often Labour tell us we can’t trust the Tories, this is a remarkable position for a front bench Labour MP.”