Are Scotland’s expectations still oil-fired?

Scots are not engaged, as they were in the 1970s, in a debate about how best to utilise North Sea assets.

The discovery of oil and gas in the North Sea in the late 1960s and early ‘70s had a transformative effect on Scottish political debate. Where previously the SNP had been expected to demonstrate that Scotland’s economy could function independently of the United Kingdom, suddenly unionists faced pressure to explain why it couldn’t thrive under Scottish control.  

In his introduction to The Red Paper on Scotland, published in 1975, Gordon Brown - then student rector of Edinburgh University - acknowledged how radically developments in the North Sea had altered the Scottish political landscape: "Modern Scottish nationalism is less an assertion of Scotland’s permanence as a nation than a response to Scotland’s uneven development - in particular to the gap between people’s experiences as part of an increasingly demoralised Great Britain and their (oil-fired) expectations at a Scottish-level."

By the time he had become Chancellor of the Exchequer two decades later, Brown’s analysis of nationalism had reversed. In a pamphlet, New Scotland, New Britain, written ahead of the first Scottish parliamentary elections, he dismissed "the cause of separation" as little more than a "misguided retreat from … modern forces of change".

Nonetheless, oil remained central to the SNP’s argument that Scotland could be a richer, fairer and more dynamic society outside the UK. But to what extent are Scottish expectations still "oil-fired"? Certainly, strategists on both sides of the independence referendum continue to view the issue as pivotal.

The most recent clash centred on an OBR report, seized on by Better Together, that predicted oil revenues would fall sharply from 2017, leaving Scotland with a larger fiscal deficit than the UK as a whole. Nationalists responded by highlighting the industry’s optimism over future rates of production and citing the work of Alex Kemp, professor of petro-economics at Aberdeen University, which estimates oil could generate between £50bn and £100bn in tax over the next 10 years alone.

When the debate becomes counterfactual, the unionist case weakens. Opponents of independence insist that, as a separate state, any benefit Scotland might have secured from control of the oil would have been offset by large fluctuations in annual revenues. Yet, between 1976 and 2011, total North Sea royalty and tax receipts amounted to £285bn (at 2009/10 prices), of which Scotland’s share - according to a median line division of North Sea territory - was £257bn. The focus on annual revenue flows is deceptive for the obvious reason that low revenues one year can be (and have been) compensated by high revenues the next.

Against these numbers, Scotsman columnist and former Labour MP Brian Wilson claims an independent Scotland run by the SNP would simply have mismanaged the oil industry. Again, the evidence suggests otherwise. As Chris Harvie explains in his book Fools Gold: the story of North Sea oil, SNP oil policy in the ‘70s and ‘80s drew heavily on the Norwegian model, with commitments to hold the oil as the property of the Scottish state, limit output to between 70 and 100 million tons per year and establish a Scottish state oil company with a 50 per cent stake in as yet undeveloped fields.

Few deny that Norway’s stewardship of its oil resources has been vastly superior to that of Britain’s. Norway’s oil fund, established in 1990, is currently worth more than £450bn, while the country’s GDP, once 9 per cent lower than that of the UK’s, is now 71 per cent higher. By contrast, throughout the 1980s, successive Conservative administrations at Westminster wasted record oil tax returns on rising welfare and unemployment bills caused by Mrs Thatcher’s monetarist experiments. Moreover, Thatcher used her oil tax windfall to disguise the growing deficit in the UK’s trade in general goods and services - a deficit compounded by her deliberate erosion of Britain’s manufacturing base.

It is difficult to believe that an oil-rich, independent Scotland would have allowed its industrial sector to decline as rapidly and as relentlessly as it has under the direction of UK policy-makers. More likely, Scotland would have pursued a programme of long-term industrial restructuring, with the possible benefit of avoiding the growth in unfettered financial capitalism that has proved so damaging to the British and Scottish economiesof late.

However, legitimate historical grievances notwithstanding, there doesn’t seem to be a great deal of political capital to be made from agonising over London’s failure, so far at least, to grasp the developmental opportunities presented by North Sea oil. Scots are not engaged, as they were in the 1970s, in a public conversation about how best to utilise Scottish oil assets in Scotland’s interests, nor do they seem particularly animated by the SNP’s talk of another boom in oil investment over the coming years.

It’s possible this sense of disengagement is symptomatic of the broader lack of public enthusiasm for the referendum campaign routinely noted by commentators. But perhaps its roots lie in a deeper collective memory of how cruelly the hopes raised by Scotland’s first oil boom were dashed, first by the defeat of devolution in 1979 and then by the decade of economic and political stagnation that followed. It would be a frustrating irony for nationalists if the defensive habits Scottish voters developed during the Thatcher era proved the undoing of the independence project. 

A tanker taking on oil from a loading bay at the Statfjord A-platform in the North Sea. Photograph: Getty Images.

James Maxwell is a Scottish political journalist. He is based between Scotland and London.

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Is defeat in Stoke the beginning of the end for Paul Nuttall?

The Ukip leader was his party's unity candidate. But after his defeat in Stoke, the old divisions are beginning to show again

In a speech to Ukip’s spring conference in Bolton on February 17, the party’s once and probably future leader Nigel Farage laid down the gauntlet for his successor, Paul Nuttall. Stoke’s by-election was “fundamental” to the future of the party – and Nuttall had to win.
 
One week on, Nuttall has failed that test miserably and thrown the fundamental questions hanging over Ukip’s future into harsh relief. 

For all his bullish talk of supplanting Labour in its industrial heartlands, the Ukip leader only managed to increase the party’s vote share by 2.2 percentage points on 2015. This paltry increase came despite Stoke’s 70 per cent Brexit majority, and a media narrative that was, until the revelations around Nuttall and Hillsborough, talking the party’s chances up.
 
So what now for Nuttall? There is, for the time being, little chance of him resigning – and, in truth, few inside Ukip expected him to win. Nuttall was relying on two well-rehearsed lines as get-out-of-jail free cards very early on in the campaign. 

The first was that the seat was a lowly 72 on Ukip’s target list. The second was that he had been leader of party whose image had been tarnished by infighting both figurative and literal for all of 12 weeks – the real work of his project had yet to begin. 

The chances of that project ever succeeding were modest at the very best. After yesterday’s defeat, it looks even more unlikely. Nuttall had originally stated his intention to run in the likely by-election in Leigh, Greater Manchester, when Andy Burnham wins the Greater Manchester metro mayoralty as is expected in May (Wigan, the borough of which Leigh is part, voted 64 per cent for Brexit).

If he goes ahead and stands – which he may well do – he will have to overturn a Labour majority of over 14,000. That, even before the unedifying row over the veracity of his Hillsborough recollections, was always going to be a big challenge. If he goes for it and loses, his leadership – predicated as it is on his supposed ability to win votes in the north - will be dead in the water. 

Nuttall is not entirely to blame, but he is a big part of Ukip’s problem. I visited Stoke the day before The Guardian published its initial report on Nuttall’s Hillsborough claims, and even then Nuttall’s campaign manager admitted that he was unlikely to convince the “hard core” of Conservative voters to back him. 

There are manifold reasons for this, but chief among them is that Nuttall, despite his newfound love of tweed, is no Nigel Farage. Not only does he lack his name recognition and box office appeal, but the sad truth is that the Tory voters Ukip need to attract are much less likely to vote for a party led by a Scouser whose platform consists of reassuring working-class voters their NHS and benefits are safe.
 
It is Farage and his allies – most notably the party’s main donor Arron Banks – who hold the most power over Nuttall’s future. Banks, who Nuttall publicly disowned as a non-member after he said he was “sick to death” of people “milking” the Hillsborough disaster, said on the eve of the Stoke poll that Ukip had to “remain radical” if it wanted to keep receiving his money. Farage himself has said the party’s campaign ought to have been “clearer” on immigration. 

Senior party figures are already briefing against Nuttall and his team in the Telegraph, whose proprietors are chummy with the beer-swilling Farage-Banks axis. They deride him for his efforts to turn Ukip into “NiceKip” or “Nukip” in order to appeal to more women voters, and for the heavy-handedness of his pitch to Labour voters (“There were times when I wondered whether I’ve got a purple rosette or a red one on”, one told the paper). 

It is Nuttall’s policy advisers - the anti-Farage awkward squad of Suzanne Evans, MEP Patrick O’Flynn (who famously branded Farage "snarling, thin-skinned and aggressive") and former leadership candidate Lisa Duffy – come in for the harshest criticism. Herein lies the leader's almost impossible task. Despite having pitched to members as a unity candidate, the two sides’ visions for Ukip are irreconcilable – one urges him to emulate Trump (who Nuttall says he would not have voted for), and the other urges a more moderate tack. 

Endorsing his leader on Question Time last night, Ukip’s sole MP Douglas Carswell blamed the legacy of the party’s Tea Party-inspired 2015 general election campaign, which saw Farage complain about foreigners with HIV using the NHS in ITV’s leaders debate, for the party’s poor performance in Stoke. Others, such as MEP Bill Etheridge, say precisely the opposite – that Nuttall must be more like Farage. 

Neither side has yet called for Nuttall’s head. He insists he is “not going anywhere”. With his febrile party no stranger to abortive coup and counter-coup, he is unlikely to be the one who has the final say.