We just caught up on last night’s Newsnight Scotland, which examined whether oil revenues were enough to sustain future Scottish public spending. Remarkably, it even interviewed Professor Gavin McCrone, and highlighted the fact that his infamous report was suppressed by the Westminster government for 30 years. And yet bizarrely – but as always seems to be the case – the programme insisted on analysing the economy of a future devolved Scotland, not an independent one.
That, however, is a startlingly stupid thing to do. Let’s keep this simple.
Nobody, that we’ve seen, has ever said that oil alone can balance Scotland’s books indefinitely. This month’s Institute for Fiscal Studies report, which provided the backdrop to the programme, shows that it fills the current gap between tax revenues raised in Scotland and public spending, but doesn’t cover the likely increases in the latter, and doesn’t provide “spare” money for investing in renewables or a fund for when the oil runs out.
Yet the analysis and debate on the programme ignored the gigantic and expensive white elephant currently sitting in Scottish waters, which will disappear with independence. Trident costs Scotland hundreds of millions of pounds a year, and no matter which party might be elected to govern the country in 2016 after a Yes vote, Trident would have to go.
The nuclear non-proliferation treaty the UK is a signatory to would require the submarines to remain in Westminster hands, and therefore no longer be the Scottish Government’s responsibility. Even if there was some kind of brain-disease pandemic in May 2016 and Scotland elected the Tories, they couldn’t keep the weapon if they wanted to. Scots would no longer have to pay for Trident, and the new nation’s budget would be boosted by an instant jackpot, every single year until the end of time.
And there’s more, of course. Doomsayers in the No camp insist that oil is running out, not just in Scotland but worldwide, and warn that relying on it for revenue is a risky business as the price is volatile. The first part is true, but as oil gets more and more scarce it seems fair to say that its price is only going to move in one direction.
In the most empirical, impartial analysis possible, an independent Scotland WILL be richer than the devolved one is. That simply isn’t up for rational debate. The savings on defence alone will provide a multi-billion-pound bonanza over the decades. (And of course, the misguided Unionist perspective also ignores the fact that the devolved nation is going to see its budget going backwards for years under UK austerity, making the comparison even more clear-cut.)
Meanwhile the price of oil will rise, increasingly sharply, as supply falls, and there’ll be extra money to invest in readiness for the day when there’s none left. That day is probably half a century away – plenty of time to harness Scotland’s incredible renewable resources, especially as Holyrood’s revenue soars with the oil price.
(We might not be able to match Norway’s legendary £300bn sovereign wealth fund – which will of course also continue to rocket – but we certainly won’t be reduced to scavenging pennies from the sick and old and poor.)
None of the above applies to a devolved Scotland, shackled to Trident and other UK military misadventures and sending all the oil money to Westminster. Yet the media insists on measuring the economy of an independent Scotland by the metrics of a devolved one. It’s (not really very) hard to understand why.