Search­ing for truth about Scot­land’s econ­omy

Sunday Herald - - EDITORIAL & LETTERS - Topic of the week: ‘The big oil lie’

YOUR front-page story about the rev­enue raised from Scot­land’s oil was ex­cep­tion­ally il­lu­mi­nat­ing, in par­tic­u­lar the com­par­i­son of how the taxes levied on Scot­land’s and Nor­way’s oil have been man­aged through the down­turn (West­min­ster and the big lie about Scot­land’s oil, News, Au­gust 20).

One as­pect of the story stuck in the mind more than any other – the ob­ser­va­tion that UK pol­icy ap­peared to be a de­lib­er­ate strat­egy of re­duc­ing the tax take from oil to al­most noth­ing.

It re­minded me of a petu­lant young child who, when told to share a toy with an­other, de­lib­er­ately breaks the toy, rea­son­ing that: “If I can’t have it, then no­body else will ei­ther.”

It raises the ques­tion – will a sim­i­lar strat­egy be taken by the West­min­ster Gov­ern­ment over sin­gle mar­ket ac­cess and the cus­toms union dur­ing the Brexit ne­go­ti­a­tions? David Pa­trick Ed­in­burgh THE lat­est Gers pub­li­ca­tion states that Scot­land’s fis­cal deficit was £13.5 bil­lion (2016-17), which ex­plains why Busi­ness for Scot­land (BfS) de­cided to con­duct a pre-emp­tive at­tack on West­min­ster in the for­lorn hope its head­line-grab­bing re­port about Scot­land’s past oil wealth would soften the blow for its in­de­pen­dence dream.

The main thrust of the BfS ar­gu­ment was to blame West­min­ster for wast­ing North Sea as­sets and sug­gest Scot­land could have been in a much stronger fis­cal po­si­tion to­day if only things had been dif­fer­ent, rather than ac­knowl­edge that Greek-style aus­ter­ity would have re­sulted if we had de­cided to leave the Union. The im­por­tance of the oil rev­enues high­lighted in the ar­ti­cle makes a mock­ery of claims by Alex Sal­mond and Ni­cola Sturgeon (dur­ing the 2014 ref­er­en­dum) that oil rev­enues were “merely a bonus” or that we were on the “cusp of a sec­ond oil boom”.

The £330bn fig­ure “over five decades” used by BfS does not take into ac­count the fi­nan­cial ben­e­fit of the Union div­i­dend dur­ing the same time pe­riod, which more than com­pen­sated the oil tax rev­enues men­tioned in the ar­ti­cle and would have ceased with in­de­pen­dence; nor do its fig­ures ad­dress the £50bn decom­mis­sion­ing costs.

Its gripe about the oil fund is ir­rel­e­vant within the UK con­text: as part of the Union it was not nec­es­sary due to the size of the £2 tril­lion UK econ­omy. If there was to have been an oil fund it should have been mod­elled on Shet­land’s shrewd oil deal and tar­geted to as­sist Aberdeen and the north­east to tran­si­tion away from oil to other vi­able in­dus­tries.

BfS’s strat­egy of dig­ging up the past sug­gests its is bereft of ideas for the fu­ture. Un­less it can ad­dress the ba­sic ques­tions on cur­rency, the fis­cal deficit and whether it wants to re­join as full mem­bers of the EU, sup­port for in­de­pen­dence will con­tinue to haem­or­rhage. Ian Lakin Aberdeen

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