Wings Over Scotland

It’s long been a bone of contention for Scots – and not just nationalists – that the UK government, by common agreement, wasted the vast wealth windfall of the North Sea on funding Margaret Thatcher’s 1980s programme of deliberate de-industrialisation, mass unemployment, huge tax cuts for the wealthy and bribes to the working class in the form of Right To Buy.

It did so rather than investing the proceeds in a sovereign wealth fund, as demanded by the SNP (and some elements of Labour) and practiced in Norway, whose fund – only set up in 1990 – is now a literal embarrassment of riches.

But the reality is even worse than that. Because according to a 2015 report by the National Resource Governance Institute that’s just come to our attention, the truth is that if the UK had managed its North Sea treasure better, it could have done both.

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Although we’re retired we already wrote this, so we may as well put it up for the 99.9% of Scots who don’t read the comments on David Leask‘s columns in the Herald.

Scotland’s worst, most reliably wrong and most pathologically insecure self-identified “real journalist” rehashed one of his favourite hobby-horses yesterday, namely that it’s a “nationalist myth” that Scotland got poorer after discovering oil in the North Sea.

It’s a claim he’s been banging on about since at least 2014, without ever providing a scrap of evidence to support it (his standard modus operandi), and yesterday was no exception. So let’s show Little Dave how proper big-boy journalists do it.

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Last week, Norway rubbed our faces in it again.

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Michael Glackin of the Sunday Times is the only serious contender to the Scotsman’s demented Brian Wilson as the most poisonously, blindly instinctive hater of anything even passingly connected to the SNP or independence in the Scottish media. His weekly bilious rants in the paper make even Scottish Daily Express hacks wince and say “Blimey, that’s a bit strong”.

But even by those standards, this week’s column is quite something. So let’s take a little look at just how much of an idiot you can make of yourself if you never allow facts to get in the way of your rage.

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We had an interesting exchange with Scottish Labour MP Paul Sweeney this week on the deathless lie that is the “fiscal transfer” – the £10bn or so that Unionists rather startlingly insist the rest of the UK generously donates to Scotland every year out of the goodness of its heart, just for the pleasure of our company.

As you can see, the debate was of a high intellectual standard.

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One thing that pretty much everyone agrees on is that an independent Scotland, like almost every nation on Earth, would face financial challenges. Like almost every nation on Earth, it would probably have to run a deficit. And the main reason for that is the decades of stupendous mismanagement of its oil resources by Westminster.

Had the UK managed North Sea Oil as well as Norway handled a very similar amount in the same period, it would be currently sitting on a sovereign wealth fund in the region of £750 billion, generating many billions of pounds in investment earnings in most years – in 2017 alone Norway’s fund returned a staggering £100 billion, over three times the Scottish Government’s entire annual budget.

Even with Scotland sharing that money with the entire UK, that would have meant around £9bn extra in Holyrood’s coffers for a single year – by coincidence roughly the size of the so-called “fiscal transfer” that Unionists insist is a gift from the generous UK, even though it’s actually a loan Scotland has to pay back – and a rainy-day fund of close to £70 billion for years when times were bad.

(For perspective on how much £9bn a year is, the most optimistic estimate of the extra money that would be raised by hiking top-rate income tax to 50p is about £0.1bn.)

All of that, of course, is now spilt milk. But there are decades of oil left in the North Sea yet, with huge new finds still being made, and an independent Scotland would have the opportunity to show that it could do a much better job of shepherding its precious wealth, and in particular hopefully investing it in harvesting the nation’s near-limitless potential for clean renewable energy.

And yet there are those who would throw it all away for an empty gesture.

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We’re just going to reprint this piece every year, because only the numbers change.

Today saw the publication of the 2017-18 GERS stats, which are once again triggering a convulsive orgy of “BLACK HOLE!” articles across the media as every Unionist in the land falls over themselves to portray their own country as a useless scrounging subsidy junkie without actually using the exact words “too wee, too poor, too stupid”.

And once again, everywhere you look there’s a “Proud Scot” screaming about how the figures destroy a case for independence that those same people have spent most of the current decade stridently insisting never existed in the first place.

So let’s recap the truth about Scotland’s financial books. Because for all the complex arguments, mad graphs ludicrously pretending Scotland is a less viable nation than Greece or Latvia or Cyprus or Malta and endless arrays of incomprehensible charts and tables, there are (now) only six things you really need to know about GERS.

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Of all the dishonest memes regularly put around by the Unionist side in the Scottish constitutional debate, the most bare-faced is the notion of the “fiscal transfer”. Part-time pretend economists harp on endlessly about how the UK “transfers” money (the current popular figure is £9bn) to Scotland to balance the books every year, as if it was a munificent gift out of the sheer kindness of Westminster’s heart.

The reality, of course, is that it’s a loan, which Scotland has to pay back with interest. If an independent Scotland ran a deficit – like almost every country on Earth – it could take that loan out from any number of possible lenders and carry on as normal.

It is in no sense whatsoever an argument for Scotland staying in the Union, because it’s completely irrelevant to the Union, except in so far as that the only reason Scotland needs to borrow money at all is because it’s been part of the UK for the last 40 years and has been left impoverished as a result while a very similar neighbouring country has become wealthy beyond imagination.

But still, let’s indulge them for a moment and assume there really is a £9bn hole in Scotland’s finances. Is there anything we could do to reduce the size of it significantly? Well, since you ask, we have some poll data on that.

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What you’re missing:

That’s a single year’s profits. For a bit of perspective, it’s about four times the Scottish Government’s entire annual budget. Thank goodness we’ve had Westminster to manage our resources for us all this time, eh?

A story from the Financial Times this week revealed the UK government’s latest act of sabotage against the Scottish renewable energy industry. It’s just one more in a long line stretching back to just after the independence referendum, when a string of “Better Together” promises were broken almost the minute the No vote was secured.

It was a particularly weak argument in the first place – if there’s a market in the rUK for Scottish energy, it’ll be there whether Scotland is independent or not. But it unravelled faster than most as soon as it had done its job.

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With this year’s GERS figures imminent, there are two stories about North Sea oil in today’s papers which are markedly different in both tone and honesty.

This, for example, is the front page of the Sunday Herald:

It’s basically a reprise of a Wings story from almost a year ago, noting that despite producing broadly similar amounts of oil to Scotland from the North Sea, Norway has generated tens of billions in pounds in government revenue from it – even during the price slump of recent years – while Scotland has actually LOST money.

The Sunday Times, though, has a rather different take.

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We had a bit of a debate at the weekend with ITV’s generally pretty decent Scotland correspondent Peter Smith, after he tweeted this:

It wasn’t the curious choice of picture we objected to, nor the fact that the £14.8bn figure is a notional sum which is totally meaningless in the context of an independent Scotland (because it represents a vague estimate of the disaggregated finances of a Scotland that’s inside the UK and subject to UK government policy choices).

Nor was it even the implication that a £14.8bn “black hole” was an inherent permanent feature of the Scottish economy rather than an unusually bad year.

What chafed with us was the idea that it was somehow Nicola Sturgeon’s fault.

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