Andrew Wilson: North Sea oil bounty would still bring benefits, if we only open our eyes

Investment increases for UK interests in the North Sea should boost the industry this year
Investment increases for UK interests in the North Sea should boost the industry this year
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THERE’S an old Irish joke immortalised in The Quiet Man where a visitor is lost and asks a local how to get to their destination. The villager answers: “Well, I wouldn’t start from here.”

A joke, yes, but it often occurs to me when I hear the Orwellian doublethink talked about the choices Scotland faces about what powers we trust ourselves with.

Classically, of course, we have since the 1960s been brought up to believe that Scotland has an unsustainable fiscal deficit (spending more than we raise in tax). Let’s for a minute assume it is true for argument’s sake (it isn’t, at least not in the way it’s meant).

Where else in the sane world would such a situation be used to argue that things should stay the same rather than be reformed? “I have run the country and the economy so badly that the deficit is huge and unsustainable therefore, folks, things must stay the same, vote me”.

We are being told by the villager that “Well, I wouldn’t start from here”, the twist being of course that it was the villager that brought us here in the first place. But repeat it loud enough and often enough and you “engender fear, uncertainty and doubt”. Noble calling politics, isn’t it?

There are many layers to the detail of this financial debate which I will leave to another time. What’s certainly true is that for the post-war period the culture of Scottish politics has been more about spending money to dry tears than about strengthening the economic sinews of the country to build prosperity and equality.

We pay our taxes but a block grant returns and the debate is too skewed towards how to divide, rather than make, the cake. This breeds irresponsibility in the political culture, dependence of thought rather than independence.

Into this context came the great policy dilemma of North Sea Oil, “Fools Gold” as writer and historian Christopher Harvie christened it. Its exploitation is not the proudest story in the history of UK public policy and politics. The excellence of engineering and bravery that has made its production possible has been equally and inversely matched by truly indolent stewardship of its revenue windfall.

Running through the argument has been the familiar Orwellian doublethink that used to enrage me but now in my middling and milding years makes me almost giggle before I cry. “This opportunity in your midst is a problem and a threat”.

Otherwise profoundly impressive and serious people make the oddest arguments which through repetition and volume have had their desired effect. I now feel that the bounty of oil plays no role at all in changing the minds of the undecided voter on the choices Scotland faces, at least not directly. The grand lies have been swallowed.

Last week the excellent Institute of Fiscal Studies (oh, to have such thinking resources focused on our policy options full time) observed the obvious; that oil revenues made Scotland’s financial position sound now (compared to the UK average) but when it ran out we’d have a problem.

Assuming we carry on with the same policies of the over-centralised UK model and disastrous stewardship we have witnessed to date it is almost a tautology.

What I can’t fathom is why we have to buy the lie (not of the IFS but of politicians) that bad habits must continue. The same argument was put to Scotland in the eighties and the nineties and yet here we are with nothing saved from oil undergoing a huge fiscal retrenchment led by a government we didn’t elect. Norway was poorer than Scotland when it discovered oil but now it is much richer and fairer and expects its fund to top a trillion dollars by the time the oil runs dry.

The evidence we can touch suggests that policymakers are far more likely to make better choices if the responsibility to do so is closer to the people. Oil was less of a bounty for the UK and the stewardship failed where Norway succeeded, but that needn’t be forever. Each year of windfall that we keep things the way they are now we are robbing the welfare of the future.

What if there is enough revenue to come for us to have a go at replicating, albeit in a smaller scale, the sense of the Norwegians? We cannot change the past nor can we prove the future. While we might wish we didn’t have to “start from here” we have a responsibility to ourselves and our children to do so. We need to break the circuit and open our eyes.

What’s certainly true is that North Sea oil is no panacea and must never be treated as free money or a reason not to reform and take the hard decisions everywhere else. But what an opportunity it still presents should we choose to take it with wisdom. There is no pot of gold, black or otherwise, at the end of the self-government rainbow. But there is a tool-box should we choose to use it.

Twitter: @AndrewWilsonAJW