18th September 2018
Established 1872. Online since 1996.

Union came before oil (Gordon Harmer)

How many of you have been subjected to the plainly absurd nationalist claim that oil “was just a bonus”? Yeah, me too.

Let us look back at how much of “just a bonus” it was to Alex Salmond in the run-up to the referendum, with a few quotes out of the former First Minister’s own mouth. He said he would pursue the introduction of an oil fund in the next five to 10 years, stating: “Scotland’s oil is worth more than £300,000 for every man, woman and child in Scotland” (later subjected to a down-revision of £40,000 per capita, when oil was trading at $113 a barrel, it’s now worth less than $50 a barrel).

Oh dear, but there’s more: “Scotland’s oil would make Scotland’s GDP 115 per cent higher than the rest of the UK”.

The vein of comedy value gets richer at every turn: “Our oil would make Scotland the sixth richest country on the planet”.

And then: “There is little doubt that Scotland is entering a second oil boom where we predict crude will retail at $150 a barrel.”

Yes I know, embarrassing isn’t it? An older one, but no less farcical: “Many oil analysts believe the cost of oil will reach $200 a barrel by 2010”.

Salmond went on to state: “Because of our oil, we’d be in the top three nations on a global scale in terms of GDP per capita. We would be standing side by side with Luxembourg and Ireland.”

The above is not an exhaustive list of nationalist crackers regarding oil; there are more where these came from. If you can find more there is a first prize of deputy leadership of a bitter separatist party.

But please remember oil was just a bonus. Oil represents just two per cent of the entire UK’s GDP for 2012/13, now at 50 dollars a barrel and falling it will represent far less.

When England and Scotland merged to become Great Britain, Scotland was a bankrupt basket case – fact!
The oil came much later, and those of you think that the reason that the unionists believe in this union is because they jealously covet North Sea oil, you are merely projecting your own sins onto others, only nationalists think in terms of “us versus them”.

People believe in this union because of emotional and family ties as well as 308 years of shared compatriotism, shared heritage, shared borders, shared economy, shared family, shared blood, not because of some resource that has only been commercially exploited within the last 40 years and which as soon as the oil companies start going bust will become a significant negative to the UK’s economy.

Gordon Harmer
Bayswater,
Brae.

19 comments

  1. Mr Matthew Forbes Whyte

    Dear Sir,
    In reference to Mr Harmer’s letter regards oil,he seems to think that it will always be $50 a barrel or less and the current price will never go up again. During the thatcher years Scotland’s oil wealth was squandered by a westminster tory government to prop up a bankrupt english basket case – fact! He mentions blood ties to the union, the blood of countless Scots sent to their deaths by the english elite ruling classes during the first war perhaps? I for one am not ashamed of Scotland and as for a union that benefits nobody north of watford and an inbred parasitical monarchy you can leave them where they belong ….the garbage pile of history.
    M.Whyte.
    INVERGORDON.

    Reply
    • Gordon Harmer

      M Whyte, would need to get his facts right before commenting on something he obviously has not read properly. First, nowhere in my letter have I said that oil would stay at $50 or less a barrel, my point is that some nationalists seem to think oil was not used as a lever to get voters to vote for independence with false predictions about its value to an independent Scotland.

      His next error is that the oil is not Scotland’s but Britain’s oil and the oil wealth he claims Westminster squandered works out at something around 2% of the UK’s GDP and was used on public spending for over 65 million people. 2% of a countries GDP is not going to go far when dished out between a population over 65 million folk.

      This is not helped when the oil revenue is further eaten into by giving oil companies tax breaks to help with exploration and further investment in the oil industry. Something the Scottish government AKA the SNP are putting pressure on Westminster to do more of to aid this struggling industry. Which in its self just goes to show what would have happened in an independent Scotland in this scenario when oil revenue would have been around 20% of its GDP. Absolute proof that we are better together and the bigger shoulders of the United Kingdom can carry this lack in revenue and are able to do something positive about it.

      I am not going to offer a reply to the last part of M Whyte’s comment because it falls into the category of lazy inaccurate chip on the shoulder, poor old down trodden Scotland politics which paints a vivid picture of its author.

      Reply
  2. Mr Matthew Forbes Whyte

    Regards Mr Arrogance Harmers comment regards Scotland and its oil….The idea that a small oil rich nation such as Norway or the United Arab Emirates can run its own oil industry successfully, but that Scotland can’t, is ridiculous. No other government suggests that a major and valuable natural asset is actually a burden on the economy, even in the case of Norway where is represents a much larger size of the economy than Scotland. Yet this is the case being made by the Tory-led No Campaign in Aberdeen as David Cameron suggests that North Sea oil is profitable for Westminster but a problem for Scotland.North Sea oil – responsible for a quarter of the UK’s total corporation tax – remains of huge value. Since its discovery, it has raised £300 billion to date for the UK Exchequer. No wonder the Cabinet is desperate to keep hold of it. Although Scotland’s oil fields may be past their peak, the rising price of oil means that what is left is worth considerably more than £300 billion in revenue. This figure does not include the oil reserves west of Shetland or the possibility of finding oil in the Clyde basin, where exploration is currently banned by the MOD in case it interferes with the operations of its nuclear submarines.

    No business or accountant would consider such a massive long term natural asset a burden. Westminster, however, has to misrepresent the issue in case Scottish voters catch on that an independent Scotland would be in a better financial position than the UK.
    The UK’s North Sea legacy was summed up in 3 words by Larry Elliot: “discovered, extracted, squandered”. Former Chancellor Dennis Healey conceded that North Sea wealth has been squandered by Westminster and even Alistair Darling admitted this was an error.This failure has been continuous over the long term. There have been 16 fiscal and tax changes in the North Sea by UK Governments in the past 10 years. All the evidence suggests that it has been mismanagement from Westminster which has caused instability in the North Sea sector.

    As Malcolm West of Oil and Gas UK said at the time of George Osborne’s tax raid,

    “We’ve had three massive tax hits in the last nine years; that just cannot go on, andit’s given this country a terrible reputation for fiscal instability.” (February, 2012)The oil remaining in the North Sea is worth over £1 trillion at wholesale value. There are at least 15-24 billion barrels of oil remaining which will continue long into the 21st century. Over 90% of the tax revenue will go to an independent Scotland which can help to establish a national oil fund for future investment.

    Business for Scotland explained the potential for a West coast oil boom that is currently blocked by Westminster. Independence could revitalise the economies of Ayrshire and the Strathclyde region as a whole. Most oil price forecasts are upward, with one of the exceptions being the UK Government’s OBR which has a political motivation to underestimate oil revenue. Alastair Darling MP of the No Campaign has described the OBR as an extension of the UK Treasury.
    This is an evidence-based wake up call for the independence debate. Scotland has been continuously misled over the value of its natural resources and its economic ability to succeed as an independent country. Today, leading Westminster politicians repeat this claim, suggesting that a source of great wealth is a burden if the tax is collected in Scotland rather than London.

    Don’t be fooled. Oil will form part of Scotland’s many economic strengths after independence.

    Yours Mr “Down trodden Scot”
    M.Whyte.

    Reply
    • Gordon Harmer

      The break even cost for a Barrel of Oil extracted from the North Sea averages out at $60. At the current price, the industry can no longer afford to keep unprofitable wells in production. I note the SNP are calling on the strength of the entire UK to intervene. Could Scotland on its own have done what they want?

      Reply
    • Gordon Harmer
      • Matt Whyte

        Dear Mr Harmer,
        Perhaps you should read this,before criticising my country,It was a document that could have changed the course of Scottish history. Nineteen pages long, Written in an elegant, understated academic hand by the leading Scottish economist Gavin McCrone, presented to the Cabinet office in April 1975 and subsequently buried in a Westminster vault for thirty years. It revealed how North Sea oil could have made an independent Scotland as prosperous as Switzerland.

        The Freedom of Information Act has yielded many insights and revelations into the working of the British government, but none so vivid as the contents of Professor McCrone’s paper, written on request in the dog days of Ted Heath’s Tory government and only just unearthed under the FOI rules.

        Earlier this week, the Chancellor Gordon Brown underlined the vital revenue stream that North Sea oil still is in the context of British politics. In his pre-budget report, Mr Brown extracted an extra £6.5b in tax from North Sea oil and gas producers, to be taken over the next three years. Economists like the Liberal Democrats’ Treasury spokesman Vince Cable say that high oil prices have already bailed out the Treasury to the tune of £1 billion this year.

        Imagine then, what the oil could have done for a Scotland which chose independence in the mid 1970s and claimed ownership of the reserves.

        Thirty years ago, Professor McCrone answered that very question and his conclusions shocked his political masters.

        Although BP first discovered the giant Forties oilfield in 1970 – which by 1977 was producing 500,000 barrels of oil a day, equivalent to a quarter of Nigeria’s entire daily production – the real rush for “black gold” had only begun around 1973, when the Yom Kippur War caused a crisis in the Middle East and forced prices up to around $16 a barrel.

        By the time the oil companies realised that North Sea drilling was not only cost-effective but highly lucrative, and the British government realised it was sitting on a gold mine, the Scottish nationalists had already laid claim to the oil.

        The “It’s Scotland’s Oil” campaign began in 1972. If only they had seen the professor’s research.

        An independent Scotland’s budget surpluses as a result of the oil boom, wrote Professor McCrone, would be so large as to be “embarrassing”.

        Scotland’s currency “would become the hardest in Europe, with the exception perhaps of the Norwegian Kronor.” From being poorer than their southern neighbours, Scots would quite possibly become richer. Scotland would be in a position to lend heavily to England and “this situation could last for a very long time into the future.”

        In short, the oil would put the British boot, after centuries of resentment, firmly on the foot standing north of the border.

        Within days of its receipt at Westminster in 1974, Professor McCrone’s document was judged as incendiary and classified as secret. It would be sat upon for the next thirty years.

        The mandarins demanded that Professor McCrone’s 19-page analysis be given “only a most restricted circulation in the Scottish Office because of the extreme sensitivity of the subject.” The subject was sensitive alright.

        This is a story of Whitehall betrayal that will satisfy the pre-conceptions of the most extreme Scottish anglophobe.

        It was the comparison with Norway that particularly worried the Westminster politicians. In the mid 1970s of course, Norway was fully independent and about to take advantage of an oil boom that has generated undreamed-of prosperity to the present day.

        In Scotland, the situation was somewhat different, and potentially explosive.

        National pride had been hugely galvanised by the appearance of the Scotland Football Team in the 1974 World Cup, a competition for which the England side had failed to qualify.

        But economically, the outlook was bleak. Heavy manufacturing, which had been the heart and soul of the Scottish economy for generations, was in deep trouble.

        Between 1970 and 1974 the number of coal mines in Scotland fell by a third, while steel production plunged by a fifth.

        Shipbuilding, the mainstay of the Clyde, was in particular trouble. After the Heath government refused to bail out four yards in Upper Clyde in 1971, trade unionists staged a work-in and occupied the yards.

        Some 70,000 people marched calling for government help and a 48-hour strike by other workers brought out more than 100,000 in support.

        Meanwhile, in politics, the nationalists were riding high as never before. The 1970 general election saw the SNP poll just 11.4 per cent of the vote and one seat. But in February 1974 they scored 21.9 per cent and won seven seats. Within eight months, by the October election of that year, their support had risen to the all-time high of 30.4 per cent of the vote, and 11 seats.

        The party was also nipping at the heels of Labour in 34 other Labour-held seats. This was the high tide of Scottish nationalism.

        Previously unheard of would-be terrorist cells began to emerge: The “Scottish Legion”, “Jacobites”, “Border Clan”, ‘Tartan Army” and the “100 Organisation”, which took its name from the famous historic Declaration of Arbroath, stating: “So long as 100 of us remain alive we will never submit to English rule.”

        American companies based in Aberdeen became nervous that a Scottish breakaway, socialist in outlook, was threatening their interests. Pressure was exerted on the government to control the situation.

        Professor McCrone’s report, in such volatile circumstances, would almost certainly have provoked a turning point in the history of the United Kingdom.

        Billy Wolfe, who was leader of the SNP at the time and the man credited with developing the nationalists as a clearly defined left-of-centre political party, is in no doubt of what the McCrone findings could have meant.

        “If that information had been published before the October 1974 election,” said Mr Wolfe, “we would have won Scotland and it would be a much wealthier and happier place.

        “A whole lot of economic factors would be a lot different, especially in the fishing, steel and shipbuilding industries. It would have been a tremendous boost for Scotland.”

        Tam Dalyell, who served as Labour MP in West Lothian for 43 years, agrees that the document could have led to independence. “In my view it might have done,” he said. “It could have tipped the balance it a number of seats including mine. Oil was very much a totemic issue. It was new and it was dramatic. Politics at that time was very different. In 1974 my majority went from around 6,000 in February to around 2,000 after the October general election.

        “It was most unpleasant. People were saying ‘it’s our oil’.”

        By the mid 1970s, international convention had already agreed that the North Sea north of the 55th parallel was under Scottish jurisdiction. That meant around 90 per cent of the UK’s oil and gas reserves fell within Scottish waters. Such was the fear of the rise of Scottish nationalism that the document remained secret under the governments of Callaghan, Thatcher, Major and even Tony Blair.

        Its very existence only emerged when Scottish National Party researchers, thought to be acting on a tip off from a former official, placed a carefully-worded request under the freedom of information legislation.

        Next week the Scottish Executive is due to publish the annual Government Expenditure and Revenue in Scotland analysis, which charts expenditure north of the border.

        Statistics for 2002- 03 showed expenditure per head of £6,579 in Scotland compared with £5,453 in England. It also showed that Scotland received £9.3 billion more than it took in taxes. It is an old English nationalist refrain that the Scots are both over-subsidised and over-represented in the British Parliament.

        In response to the first of those charges, for the first time in thirty years the Scots now, in the form of Professor McClone’s suppressed report, have hard evidence to suggest that it could have been Scotland, not England, sending money across the border. Yesterday Alex Salmond, the SNP leader, made it clear that the 31-year-old McClone papers were not just a dusty history lesson, but would form a central part of their campaigning for the future.

        He said: “The impact of this would have been dynamite. It would have had great influence.

        “I was astonished by how direct the paper was, and appalled at the extent of what has been hidden from the people. McCrone was saying that an independent Scotland would be Europe’s Switzerland. The Labour party were saying that it would be like Bangladesh.

        “This is hugely important. But it was not just important then. It is important now. Gordon Brown’s black hole is being filled by black oil.”

        At the time of Professor McCrone’s report to the cabinet office, the SNP claimed that North Sea Oil would yield £800 million a year for the government by 1980.

        Professor McCrone’s main criticism of their analysis was that their forecasts were “far too low”. He put the sum at about £3 billion.

        Scottish independence had become a mortal threat to the British exchequer. “The importance of North Sea oil” wrote, the Professor, “is that it raises just this issue in a more acute form than at any time.”

        M.Whyte.

      • Gordon Harmer

        Dear Mr Whyte, perhaps you should include this paragraph in your post.
        In 1975 a year after Professor McCrone had written his report, civil servants in London (including McCrone himself) met to discuss its implications. They concluded that his findings had been accurate, and that the average income in Scotland would increase if the country became an independent state. They also concluded that Scotland’s “economic problems would disappear”, and it would become “the Kuwait of the Western world”, though this was balanced somewhat by the opinion that Scotland could risk “disaster” if the oil price collapsed. The civil servants summed up by finding that there was “a good case for the continuation of the Union.

    • Nick Reid

      Your post is comprised almost entirely of factual errors, misunderstandings and stuff you seem to have invented.

      North Sea oil isn’t responsible for a quarter of the UK’s corporation tax revenues. Oil related corporation tax was £3.6bn in 2013/14. Total UK corporation tax that year was £41.3bn. So it is less than 10%.

      No one has ever said North Sea oil was a “burden”. The problem is basing your proposed government spending on a hugely optimistic scenario for a single very volatile commodity. If oil really was “just a bonus” then this wouldn’t be a problem, but the Scottish White Paper forecasts for an independent Scotland needs an oil price of $113 to cover the cost of the NHS and education.

      £300bn ? Useful to have certainly but not as significant as you seem to think. It is a sum raised over thirty years. The size of the UK’s GDP is £1,500bn. So it equates to 20% of GDP for one year !

      And as for un-tapped oil fields due to the presence of Trident submarines. You are just making this stuff up…..

      Reply
  3. Iantinkler

    M.Whyte. CyberNat or cyberNut. “after independence.” Dream on sunshine , just in case you missed it the Nationalists lost. Now wee Alex said over fora generation. Do you mean he lied?

    Reply
  4. David Compton

    So the rest of the UK is now subsisting Scotland if we work on the snp formula? I wonder if they will be looking to go independent from us now they’re worth more?

    Reply
  5. Laurence Paton

    Was it not the case that when North Sea oil first came online the country (U.K),
    was more or a less bankrupt basket case ?
    In addition to that the revenue from North Sea also used to pay off the World War 2 debt.
    You can note that after 1976 the country never missed another payment
    http://www.politics.co.uk/news/2006/12/29/britain-finally-pays-off-wwii-debt

    Reply
  6. Adam Zapel

    That’s fine, enjoy your English identity. That’s all it is, Scotland is Englands slave to 90% of the planet. The Unionists love it that way, infact you’d be happy if Scotland was just referred to as Northern Britain’.

    Reply
    • Steven Jarmson

      The SNP and loser gNATS proactively encourage xenophobic values, so surely wouldn’t care what 90% of the world thinks as they’re just a bunch of non-Scots so their opinions don’t count, in fact we probably subsidise many of them through the UK’s foreign aid policies, which since we’re subsidising the UK, we subsidise these spongers too, surely!!
      Just to get picky though, what research is your 90% assertion based on and where can I access that research?? Perhaps SNP head Office??
      Get to the Happy Haddock and give them that chip on your shoulder, I’m sure it’ll do a good few hundred thousand suppers.

      Reply
      • Steven Jarmson

        Also, just point out, it was the Scottish (through the kings at the time who sat on both crowns, Charles and James) who wanted to do away with “Scotland” and “England” and start referring to each as Northern and Southern Britain.
        It was the English who stopped this happening.

  7. Tim Parkinson

    Because of this, Scotland is sitting on reserves that are appreciating in value.

    The more of the easy access/cheap access oil reserves that the Saudis pump out of the ground to create the glut (which is aimed at making America and UK shale oil fracking operations uneconomical)….the more valuable Shetland/Scotland’s oil will be.

    The Saudis/OPEC reckon they can keep this up for 4 years.

    Even if North Sea oil is mothballed for that period, then its better to still have it when its worth 200 dollars a barrel and everyone comes back for it.

    Scotland’s economy needs a long term view not the “short-term asset-stripping-in-exchange-for-one-more term-in-office” that politicians inevitably trade in!!

    Reply
    • Gordon Harmer

      Mothball oil platforms in the north sea for four years; I have never heard such rubbish. Oil platforms are living things and need to be constantly maintained and monitored, which would mean a continued cost. What would most likely happen is that decommissioning would come far quicker than anticipated, something else that would carry a cost and not just to the oil companies but to the UK tax payer.

      A four year shut down would be catastrophic to the oil industry; and just how long would it take to mobilise everything again once prices rose? Probably another four years. What about the jobs that would be lost; another cost to the UK tax payer. This is some strange kind of long term view, it sounds more like SNP separatist waffle to me. Just imagine the cost of the above to a newly independent Scotland; no don’t imagine it because there are those who would still go it alone whatever the cost.

      Reply
      • John Tulloch

        Yes, Gordon, and those eagerly anticipating cashing in on these “appreciating oil reserves” will be well advised not to hold their breath, meanwhile.

        The major oil industry consultants Wood Mackenzie have suggested that while some US shale producers will be put out of business at present prices, rapidly improving technology will reduce the costs associated with producing shale oil by $10-$15 per barrel over just the next six months.

        I wouldn’t expect the cost reductions to stop after six months, either, as the technology will continue to develop, so where does that leave OPEC, never mind the North Sea?

      • John Tulloch

        Sorry,

        My above comment should have contained the following link:

        http://www.thegwpf.com/cheap-shale-oil-is-getting-even-cheaper/

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