Lesley Riddoch: A risky time for Cameron to visit

PM Cameron in Aberdeen, but no meet, on TV or elsewhere, with FM Salmond down the road, writes Lesley Riddoch

The Granite City will host the British Cabinet. Picture: Robert Perry
The Granite City will host the British Cabinet. Picture: Robert Perry

It’s a Tale of Two Cabinets. For perhaps the first time in British history, the UK and Scottish governments will sit in the same city at the same time, making Aberdeen the temporary focus of political attention across the UK. Or to be more accurate, David Cameron and colleagues will meet in the Granite City itself while Alex Salmond and his Cabinet will settle on the commuter town of Portlethen, a few miles to the south.

But there’s no doubt the coincidence will dominate UK headlines, focus attention on oil and gas, and prove the UK government is back in the saddle after love bombs, lectures and Brit Award teasers failed to transform the No campaign last week.

Decamping to Aberdeen is a bold, high-risk move by the Prime Minister. First, there’s the danger of tokenism. The Scottish Cabinet has met outside Edinburgh every summer and plans to meet outwith the capital once a month from now on to press the flesh, campaign for a Yes vote and hear local grievances. It was Bathgate’s turn in January, it’ll be Stornoway’s in April and the Portlethen fixture was booked months ago. The UK Cabinet has met in Scotland only three times in history. So although the UK media will doubtless portray Alex Salmond as David Cameron’s impertinent gatecrasher, most Scots know otherwise.

More importantly, Cameron’s appearance in the same city further weakens his case for refusing a TV independence debate with Alex Salmond. It looks increasingly as if the PM wants to upstage but not engage with his bullish opposite number. Yet opinion poll after poll suggest a face-to-face encounter between the two leaders is precisely what voters want – and Nigel Farage’s agreement to debate Europe with the Lib Dems’ Nick Clegg piles on even greater pressure for more than “show-and-go” appearances.

Second, there’s the danger of sounding old hat. David Cameron will, of course, have shiny, big presents to unwrap in Aberdeen and they reportedly include a new Scottish-based oil and gas regulator and a report by Sir Ian Wood, the retired oil tycoon, on the future of Britain’s oil and gas industry.

Meanwhile, Energy Secretary Ed Davey will cut short paternity leave to announce an ambitious carbon capture and storage (CCS) project in Peterhead. These are impressive announcements but then Westminster does control every aspect of energy production and investment. And there’s the rub. If a local regulator really can boost the oil and gas sector by £200 billion over the next 20 years, why has the UK government waited until now?

Alex Salmond will welcome the proposal and urge its immediate implementation. Will David Cameron oblige or leave the offer dangling as a post-independence prize for good behaviour? Scots may also recall the CCS project at Peterhead was vetoed six years ago by the last UK government and a similar project at Longannet was vetoed by the coalition government last year. Not exactly a track record of consistent support.

Equally, Ian Wood is a respected player in oil and gas – but he’s also the man who failed to win public support for his bid to redevelop Aberdeen’s Union Terrace Gardens. Aberdonians may ultimately blame their own council for that debacle, but the billionaire is a divisive figure.

So how will this “new” UK package go down with Aberdonians. Who can say? Does Scotland’s oil and gas sector benefit massively from UK-wide investment in a way that would be impossible after independence? The energy world is full of non-British players and the City of London recently sat on its collective hands despite generous subsidies when the opportunity to invest in nuclear power arose south of the Border. Perhaps the North Sea would be on its uppers with “only” Scottish and international investors – even though the example of neighbouring Norway would seem to suggest otherwise. But that case must be made convincingly, not simply asserted.

On the other side of the bidding war, Alex Salmond has announced 300 new post-independence jobs for Aberdeen by splitting the energy department between Glasgow and the oil capital, and he’s set to accuse the coalition of threatening Aberdeen rail links to help finance the high-speed HS2 project in England. Who knows which “offer” will sound more credible to Aberdonians.

The Granite City may be “recession-proof” with the highest number of multi-millionaires outside London and a relatively booming energy-based economy. That would be a demographic shoo-in for Tories elsewhere in Britain – but it isn’t here. The region is an SNP stronghold and Aberdeen City is largely represented by Labour MPs and MSPs. How will they respond to a fleeting visit from David Cameron? It’ll be fascinating to hear. Finally, there’s the danger of opening a real debate about the value of Scotland’s oil. Its troubling volatility seemed unproblematic to former chancellor Dennis Healey last year when he revealed UK governments had “underplay[ed] the value of oil to the country” because of fears over Scottish nationalism.

Lord Healey said: “I think [Westminster politicians] are concerned about Scotland taking the oil. I think they are worried stiff about it. I think we would suffer enormously if the income from Scottish oil stopped but if the Scots want it, they should have it and we would just need to adjust. But I would think Scotland could survive perfectly well, economically, if it was independent.”

This startling admission rekindled interest in an unpublished 1974 government report by economist Professor Gavin McCrone which concluded that oil would leave an independent Scotland “in chronic surplus to a quite embarrassing degree” and that “Scottish banks could expect to find themselves inundated with a speculative inflow of foreign funds”.

Of course, that was then. Prof McCrone says Alex Salmond’s proposed Norwegian-style Sovereign Wealth Fund should have been established before oil production peaked in the 1980s. And yet – with some caveats – he still backs its belated creation now. Do Messrs Cameron, Osborne, Balls or Alexander? What about clarity on the promised Devo-More alternative to independence – will it allow Scotland to own and collect oil revenues? And what about the Green argument that oil and gas expansion by two governments keen to slash carbon emissions is singularly short-sighted?

Never mind the baubles. Silence on these big issues today – by either Cabinet – will be noticed.