Richard Johnston worked in management, construction and production in the North Sea oil industry both on and offshore for more than 30 years.
IN 1974, the Organization of Arab Petroleum Exporting Countries (OPEC) cut oil production to increase the price of crude oil from $2.90 to $11.65.
As a net importer, the annual UK balance of payment deficit increased by £2.5 billion.
In a few years this would force the UK into borrowing from the International Monetary Fund (IMF) to the tune of £4bn.
The books were out of balance as the UK could no longer exploit the colonial assets that it once had, especially in the Middle East. But a source of oil had been discovered in Scottish waters.
Read more from our McCrone 50th Anniversary special edition here:
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Humza Yousaf: McCrone Report shows 'price of Scotland not being independent'
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I worked in the energy sector – I saw how the UK squeezes Scotland dry
The UK Government then commissioned Gavin McCrone to report on the potential wealth from oil reserves in Scottish waters and the consequences of it going to an independent Scotland, as opposed to becoming the saviour of the UK economy.
McCrone reported that this oil wealth would result in an independent Scotland gaining a “chronic surplus in its currency (Scottish Pound) making it the hardest currency in Europe aside with the Norwegian krone”.
Indeed, it could become the currency of security against inflation for foreign funds.
This point is pertinent as Scotland’s oil and gas reserves are similar to or greater than Norway’s.
With a surge of support for the SNP now reaching 30% in the General Election of October 1974, the UK Government was horrified at the thought of the Scottish people becoming alerted to their nation’s mineral wealth. It decided that McCrone’s work was to be buried in the deepest recesses of its archives, never to see the light of day again.
I was involved in the construction of the massive oil platforms required in the race to exploit North Sea oil, in what ranked as our greatest-ever civil engineering project.
Tony Benn (above) flew out and opened the valves and the oil rushed ashore in immense quantities. No more expensive imports and excess Black Gold to sell for top dollar.
And, to this day, all oil and gas revenues flow south to London.
The true financial figures for how much Scotland contributed to London from oil and gas are difficult to ascertain, which is to the possible benefit of the latter. However, we have a direct comparison by looking to Norway for the truth.
As the richest nation per capita in Europe, independent Norway controlled its mineral wealth and built up its economy wisely. The Norway Government Pension Fund (Oil Fund) now stands at around $1.3 trillion.
This fund is strictly controlled and is estimated to continue to fund Norway’s social costs for 300 years.
Read more from our McCrone 50th Anniversary special edition here:
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Nova Innovation CEO in renewables warning to Scottish Government
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Alex Salmond: Why the McCrone Report is still so key 50 years on
As a direct comparison, the UK has squandered every cent from North Sea oil reserves. With its now clearly visible lack of any energy policy, the UK acted like a kid in a sweetie shop, filling its pockets for free while emptying the shop.
With its inability to create a sustainable post-colonial economy, the UK went from boom to bust. There was little investment for the future, little social care or infrastructure and even less for Scotland.
This boom and bust affected the Aberdeen economy especially, with negative equity on homes, the collapse of the traditional industries, which were not safe from Thatcher’s destructive tendencies, and zero investment from the UK to future-proof the city.
The UK’s windfall was instead spent like a drunk man by successive asset-stripping Westminster governments intent on pointless imperial-era wars.
Britain was a superpower again, they thought, forgetting that oil was a diminishing resource unlike India, China, Persia or any of their previous colonial adventures. Their tragic waste and mismanagement is clearly seen in hindsight.
What if Scotland had seen McCrone’s findings and chosen an independent future?
We would have the strongest economy in Europe, with Edinburgh or Glasgow being the choice of investors over London. We would have a sustainable economy distributing wealth and employment throughout the nation, away from the UK model of “London first”.
Our marine engineering and oil-field expertise would have made Aberdeen a true Oil Capital, similar to Dubai, not left discarded as a Coal Town by the UK. A new nation would have been built with the latest rail and road technology.
We could have renovated our historic cities to become the tourism destination of choice with full membership of the European Union.
Additionally, we could have used the money to convert Scotland to a green economy with hydro projects, marine engineering to develop undersea turbines and wind turbines to exploit our natural energy resources. This should be an existential priority, not kicked down the road – the way the UK is treating the crisis.
Read more from our McCrone 50th Anniversary special edition here:
- McCrone Report: How Norway's oil fund works and why it's successful
- Energy bills: Why does Scotland pay more than England?
Investing massively in social housing with green energy for heating; renewing and repopulating the Highlands with timber production for industry and farming; building an army, navy and air force for defence, not attack; removing nuclear power stations from our territory – all of these are on the “could have” list.
Most importantly, no-one would ever go cold or hungry on a meagre UK-sized pension.
McCrone was correct, as we now see from Norway’s chosen path.
Scotland never truly benefited from its mineral wealth. It’s ironic that our hydrocarbon resources have contributed to a climate crisis, yet we have had no power to combat it.
Instead, we merely propped up a failed state in terminal decline.
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