By Martin Kelly
More evidence has emerged demonstrating the extent to which Scots were misled by successive UK Governments over North Sea oil.
One month after former Labour Chancellor Denis Healey admitted that his party had underplayed the value of Scottish oil in the 1970s, new research has revealed that during the same period the Conservatives failed to honour a pledge to set up an oil fund.

In the October 1974 General Election, the Conservative manifesto promised that the UK government would create an oil fund for Scotland should the party be returned to power.

In The End of British Politics?: Scots and English Political Behaviour in the Seventies by William Lockley Miller, the author details how during the October 1974 general election the Tory manifesto promised a Scottish Oil Development Fund which would use oil revenues, "to finance additional services in the areas affected by oil development as well as abolishing road bridge tolls, providing new sports facilities including a new Hampden Park and renovating out-of-date housing and obsolete industry".

It said that all this was, "in addition to expenditure to which Scotland as an integral member of the UK is entitled".

The Tories narrowly lost the election to Harold Wilson’s Labour party and Denis Healey was installed as Chancellor.  Last month in an interview with Holyrood magazine, Lord Healey, who was Chancellor from 1974 to 1979, finally admitted that Labour deliberately downplayed the value of North Sea oil in order to stem growing support for the SNP.

 "I think we did underplay the value of the oil to the country because of the threat of nationalism but that was mainly down to Thatcher."

The Conservatives were returned to power in 1979, however earlier promises by the party to set up an oil fund failed to materialise.  During this time former Tory leader Alec Douglas Home made a promise to Scotland that if Labour's Home Rule proposals were defeated in that year's referendum, the Conservatives would deliver "something better".

Despite a majority of Scots voting for an Assembly the result was ignored due to a condition introduced into the ballot by Labour that set a minimum requirement that forty per cent of the electorate had to voteYes.

However, with Margaret Thatcher in power, any discussion of devolution was off the table, and with it any possibility of an oil fund for Scotland which could have gone a long way towards ameliorating the devastation created by Mrs Thatcher's policies.

Commenting on the latest revelations, SNP MSP for Aberdeen South and North Kincardine Maureen Watt said:

"Yet again this shows the lengths the Westminster parties went to, to mislead the people of Scotland.

"We've had the McCrone report and we've had Denis Healey's revelations which were proved correct as the estimates used by Jim Callaghan show.

"If the Tories could promise an oil development fund in 1974 why did they not deliver it when they had the chance? Why don't they deliver one now?

"It's just the same as their promise of better devolution if Scotland voted No in 1979. That never transpired either."

Previous research has highlighted how the anti-independence parties' claims on the value of oil were underestimated with former Labour Prime Minister James Callaghan predicting there would be "total revenue yield from the North Sea, including gas, will approach £4bn a year by the mid-1980s".

In reality by 1985 the revenue was three times estimated at just over £12billion.

Ms Watt added: "It just shows we cannot trust a word the anti-indpendence campaign says and any promises they make now will only ring hollow with the people of Scotland.

"I challenge the Tories to explain how we weren't misled on an oil fund.

"We have seen an historic 30-year high in investment in our oil and gas industry, with £11.4billion invested last year – expected to rise to at least £13bn this year.

"Only a Yes vote next September gives Scotland the opportunity to make the next four decades of oil and gas work for our country and for future generations."

Evidence that the true value of oil had been kept hidden from Scots emerged after a secret report was made public after thirty years of being kept secret.  Compiled by economist Gavin McCrone in 1974, it revealed that the UK Government new that oil would make an independent Scotland embarrassingly rich.

Some of the conclusions the report makes about an independent Scotland include:

  • The country would tend to be in chronic surplus to a quite embarrassing degree and its currency would become the hardest in Europe…
  • An exchange rate of £1 Scots to 120p sterling within two years of independence theref ore seems quite probable.
  • Thus, 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.
  • Britain is now counting so heavily on North Sea oil to redress its balance of payments that it is easy to imagine England in dire straits without it.

In May this year during a conference at the University of Aberdeen on the politics of the oil and gas sector, CEO of Oil & Gas UK Malcolm Webb made clear his personal view that the estimated 24 billion Barrels of Oil Equivalent (BOE) remaining in the waters off Scotland's coast was an "underestimate".

Recent estimates based on Economic Co-operation and Development (OECD) forecasts shows that the total revenue still to come from Scotland's oil and gas sector could be as high as £4 trillion.

OECD economists at the Paris based Organisation have forecast  that the price of a barrel of oil will rise to between $150 and $270 throughout the coming decade.  The OECD envisages a baseline value for a barrel of oil of $190 which, the new report will say, will lead to an independent Scotland benefiting to the tune of between £2.25 trillion and £4 trillion.

The Scottish government's own estimates, based on a more conservative price for a barrel of oil of $100, suggests that there is at least £1.5 trillion worth of oil and gas still to be extracted.


# Breeks 2013-06-17 07:24
So I guess that rules out sheer incompetence then...
# Al Ghaf 2013-06-17 07:43
I understand the Conservative policy of additional selective regional aid funded by oil revenue did happen. Only it was another "region" that was the beneficiary.

Boris did let slip the Tory mindset of the best way to help Scotland is by increasing spending in London. Better Together and all that, what?
# clootie 2013-06-17 08:31
Just a reminder - those who access Newsnet are either YES or open to the debate.
We all need to continue to work in selling the case using information gained here to at least one person this year who at the moment is in the NO camp because of the fear campaign.

This referendum will be won at the grass root level.
# Old Smokey 2013-06-17 08:42
Well reminded clootie
its fine that we discuss here, but its about getting the message out to those at grass root level
The biggest problem for pro independence campaign is being in touch with the people over the heads of the highly bias media. The plus plus factor is that this is no longer a period reliant on the newspapers or broadcast media, but is all about the internet, the ability to find out for ourselves through vast source material. Utilising sites such as Newsnet Scotland, which does a great job at routing out the facts, but also its about contributing what you see for yourselves and sharing within sites such as Newsnet and with others outside. Counter fear and negativity with hard facts!
# andymac96 2013-06-17 16:36
Agree totally Clootie, I got one today ,don't know about tomorrow, but those who are committed to winning cannot let up as we need to do the apathetic and scared ones work as well :)
# bringiton 2013-06-17 09:16
Part of the political considerations for not setting up an oil fund would have been:

1. The true value of oil and gas revenues would have been clear to the Scottish electorate creating a "grudge" culture and fueling the demands for independence.

2. A future independent Scotland would have a claim at least equivalent to it's per capita share on this fund.

When the money disappeared into the Westminster treasury black hole the money could be hidden and spent however successive Westminster governments chose.
No doubt,Westminst er politicians would argue that we got our fair share of this revenue but when you are relying on the London treasury to supply the "facts",it is not likely you will get close to the truth.
It is only recently that the London politicians have admitted that they had been misleading voters and that Scotland contributes more in taxes than it gets back in pocket money.
Sleight of hand would be an understatement.
# hiorta 2013-06-17 09:31
If anyone is silly enough to vote for these lying, thieving 'Honorables', they really do deserve all that's coming to them.
# bagonails 2013-06-17 11:50

[Admin - Please do not post messages entirely in capital letters.]
# maisiedotts 2013-06-17 12:00
Excellent idea bagonails, well done!
# kenneth_clark336 2013-06-17 12:23
Quoting bagonails:

Yes! In this digital world the written word still has great potency. I've lost count of the number of articles, mostly from here, I have printed and passed on, or left in public places. We only have to change one person's mind. This method in my own experience has done more than that, from causing people to doubt and question the status quo, to outright YES votes. If we all did this as a counterpoint to the MSM we can contribute, even in a relatively small way, to a YES in 2014.
# Clydebuilt 2013-06-17 18:31
bagonails and kenneth_clark336


Great Idea!

I email to my contacts and ask them to pass on to their contacts.

As Clootie says "This referendum will be won at the grass root level."

Newsnetscotland is a tool that will help win this referendum......

We all have to use it!

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