Tuesday, December 12, 2006

More on Scottish Independence

Things have been a little quiet on here of late, Lorenzo's efforts notwithstanding. To get the ball rolling again, I thought I'd share this interesting and insightful comment on, and expansion of, my post below that I received via email from my father Angus MacDonald, a lifelong resident in and observer of the Scottish political scene...

It is interesting to note that recent polls on Scottish independence show considerable support for this idea on both sides of the Scotland - England border. The polls seem also to show that the support for this in England is based substantially on the view that the Scots are 'subsidy junkies', reliant on an unequal distribution of government financial support through a funding mechanism known as the Barnett formula. Joel Barnett was Chief Secretary to the Treasury during the years 1974 to 1979. The first North Sea oil was piped in to Teesside in 1975. In 1974 Professor Gavin McCrone, who was Economic Adviser to the Secretary of State for Scotland, wrote his report entitled 'The Economics of Nationalism Re-examined'. This report concluded that an independent Scotland “could now expect to have massive surpluses on its budget and on its balance of payments and with the proper husbanding of resources this situation could last for a very long time into the future”. It also concluded that “for the first time since the Act of Union was passed, it can now be credibly argued that Scotland's economic advantage lies in its repeal”. This report was suppressed and only recently released under freedom of information regulations.

At that time, when the oil had just begun to flow, the slogan ' It's Scotland's Oil' had much appeal, but there was also, understandably, some doubt about the true value of the oil, how long it would last, and what would happen to a separate Scotland once it was finished. But there was also some unease about the situation that could develop in the best case scenario - that the oil truly was a massive and long-term windfall; these islands are probably too small, comfortably to contain massive differences in wealth between neighbouring states. That the balance of advantage would lie very clearly with the very much smaller state could only heighten the potential for tension. Perhaps this thought partly underpinned Professor McCrone's qualified comment - repeal of the Union could arguably be in Scotland's economic ( as opposed to political?) interest. The suppression of this paper meant that the debate was uninformed by the authoritative assessment of the potential of oil for Scotland that Professor McCrone had made, but in my view it is by no means certain that Scotland would have opted for independence then, even if the views expressed in this report had been widely known. Whether from fear of going it alone, from a sense of solidarity with and affection for England and the other parts of the UK, from an unwillingness to create major inequalities of wealth and the tensions that this could cause, or from a mixture of all these things, Scotland may well not have opted for independence at that time.

This background makes the view that independence would be good for Scotland, because Scots would then realise that, as Simon Jenkins wrote recently in the Guardian in an otherwise reasonable and balanced piece, 'that public money does not grow on English trees', deeply ironic. Deprived of the conclusions of an authoritative analysis, perhaps even motivated to some extent by a degree of altruism, Scotland continued with the Union, a situation sweetened a little by the Barnett Formula. The high political visibility of this formula, coupled with anunquestioned assumption that the wealth provided by North Sea oil could not possibly have been bestowed anywhere other than on Westminster, have been major factors in producing the view in England of Scotland as a land supported by subsidy; this in turn has fuelled the growth of the view in England as well as Scotland that independence for Scotland would be good for both - the very thing that the suppression of the McCrone report was designed to avoid. Had a fully informed debate been allowed to happen at the time, the Union would not now be threatened by the combination of smug condescension on the one hand, and resentment on the other.


Anonymous said...

Why is it that comments on the relationship between Scotland and England always focus on the question of North Sea oil? Surely there is more to the relationship than the question of oil v. subsidy? It's a bit like trying to sum up the relationship between England and France by focusing on the BSE episode.
And whilst I agree that the English public are beginning to focus, in part unfairly, on the fact that southern England subsidises everywhere in the United Kingdom north of the Welsh border, I think the reason lies not in a misunderstanding of the arguments surrounding North Sea oil, but that they are fed up of being the focus of Scottish nationalism.

Anonymous said...

There is much to agree with in the comment on the original submission; however the fundamental point being made was that, had the information that was available on North Sea oil been openly and honestly debated at the time of first discovery and exploitation, we would not be in the situation in which we find ourselves now. The significance of other aspects of the relationships between all the other parts of the UK would have been drawn out, the full contribution of the discovery to the ecomomy of the UK would have become widely known, and those living south and west of the Welsh border would almost certainly have a more balanced and realistic view of the value of the contribution made by all parts of the country, one not defined by the perception that they are subsidising and carrying a burden that is as unproductive as it is ungrateful. It is easy to see how that view is reinforced by the resentment it produces elsewhere in the country - and that these views should surely not provide the parameters within which we discuss the future of the islands we all share. Perhaps there is something to be taken from the BSE episode: it did not create or 'sum up' the relationship between England (Great Britain?) and France, but it certainly illuminated its nature.It may be that, in much the same way, we have valuable things to learn about relationships in the UK from North Sea oil and the 'subsidy' debate.

A. MacDonald

Anonymous said...

'...south and west of the Welsh border...' should of course read '... south and east ...' - and while I am at it, I should acknowledge the many wise and generous souls living there who do not share the view I am describing!