Let’s not revisit the oil con

Scottish Policy, UK Policy Jul 25, 2013 5 Comments

Nationalising Scotland’s oil is not a priority – stopping multinationals and their pals in the Treasury fleecing us again in the renewables field as they did in oil is: Robin McAlpine’s article from today’s Scotsman

Sitting in a pile of newspapers in the office here is a Financial Times from 13 April of this year. I kept it because of its front page headline, which reads “Investment Bonanza for North Sea Oil”. It has avoided the recycling, not because of my joy at the massive corporate profits it heralds but because Saturday, 13 April, was the end of another week of front page stories in Scottish newspapers warning us that oil production in Scotland is going into terminal decline.

This has been the story of North Sea oil; one story for financiers, another for the Scottish population. It is a reflection of just how far the British Establishment has been willing to go to ensure corporate and Treasury control of this national asset. And it is why Alex Salmond has little choice but to capitulate to the oil barons.

Because where the SNP’s misjudgments on corporation tax and devotion to sterling were optional, yesterday’s announcement on oil tax in an independent Scotland was virtually compulsory.

In the early years of an independent Scotland, it would be almost impossible to take on the power of the oil corporations. In a global industry with easy capacity to increase and decrease supply from different regions of the world, oil corporates have massive control over production rates and so the public finances of any host nation can be sabotaged virtually at will.

A few years ago, when Gordon Brown proposed a modest tax increase on oil, this is exactly what the oil companies threatened. Westminster backed down almost immediately. We have handed a monopoly right to exploit a British national asset to a big oil cartel. That cartel only pokes the gun into our back from time to time; but we know it is there. An independent Scotland would be particularly vulnerable to blackmail and sabotage by oil barons.

I have virtually no patience with the argument that Scotland’s relationship with Britain is a colonial one, primarily because it isn’t true. Oil is one of a small number of exceptions. There is now clear documentation and personal confirmation from senior people involved that Scotland was subjected to a black propaganda campaign on oil from the 1970s onwards. That there has not been a greater degree of outrage among Scots that Westminster knowingly and intentionally lied to them is a function of a news agenda that didn’t take it seriously enough.

But long-term misinformation designed to make Scots believe oil wasn’t an asset isn’t even the worst of it. What makes oil function like a colonial trade is that the profits of oil were used by the London elite to inflict harm on Scotland and much of the rest of the UK.

It is a question seldom properly discussed: what did we do with our oil reserves? People often believe that it was used to keep tax low. This isn’t really true. In the 1980s, the Thatcher government wanted to deindustrialise Britain for ideological reasons. Her problem was that in greatly reducing industrial production, she was also losing large amounts of tax revenue and had to fund the mass unemployment it caused. Oil was her saviour. It provided her with the fast cash needed to survive the devastation of the UK’s industrial base.

As of 2013, little has changed. Oil exports give Britain a false sense of competence. If it wasn’t for the oil, our balance of trade would be a source of national anxiety. Along with uncontrolled casino banking, it has let Britain off the hook of having a productive economy and propped up a low-pay economy.

And in Scotland it has been used to treat us like idiots. We have think-tanks which seem to exist solely for the purpose of talking down the value of Scottish oil and which are not challenged on consistent underestimation. We have people talking about the risk of relying on volatile industry sectors in a UK economy which is almost wholly reliant on the trade in complex financial derivatives to stay afloat. The nationalist case on oil is dispiriting; the unionist case is an insult to our intelligence.

This is a case study of where Common Weal – the mutual development of shared assets for collective benefit – is at its strongest. In Norway, 80 per cent of the petroleum production is in public hands and 85 per cent of the revenue from production goes to the nation. You really do need to be some kind of ideological zealot not to wish that Britain had developed oil as a nationalised industry like Norway did. We handed 80 per cent of the value of our oil to global corporations out of the kindness of our hearts while fretting about our public finances.

While nationalisation of oil in an independent Scotland should not be dismissed entirely, I doubt it should be our priority. Oil production genuinely is declining and it would be a mistake to see our future closely tied to hydrocarbons. Plus the money could be better used.

But we must bring to an end an era when the profits generated from large-scale national resources are taken from the wider population by a corrupt international financial hierarchy. Unaccountable financial interests should never be able to use assets belonging to the citizens of a nation to control and bully those citizens. Natural monopolies must not be used to extort profits from ordinary people. The development of energy production and distribution should be based on long-term planning of national need, not short-term punts on what will produce the fastest profits.

The Reid Foundation will soon publish a major report outlining how Scotland can develop its futureenergy supplies in such a way that energy generation will return into collective ownership, though in a radically decentralised form quite different from old centralised state enterprises. It will explain how we can return to the nationally-planned energy supply system which bequeathed us the remarkable National Grid.

These are realistic and achievable targets. Common Weal exploitation of other shared assets such as land and water should also be our priority.

Scotland needs to avoid playing the victim here – we were particularly targeted for lies and black propaganda but the deindustrialisation oil funded killed hope in great swathes of England and Wales as much as in Scotland. And the positive potential for the use of oil income was snatched from the grasp of ordinary people throughout Britain, too.

This, for me, is the irony of oil and independence. The strongest oil-related case for independence is not that Scotland has great oil wealth ahead, but that it has much less than it should. Scotland would have made different decisions than Thatcher. The development of the next generation of energysupply in collective ownership is a realistic proposition in Scotland. It is very hard to say the same at a UK level.

So, we have two futures. In one of them we repeat this whole sorry story again with foreign multinationals picking Scotland clean of its renewables wealth. In the other we share the wealth for national benefit. I have no doubt which would be the democratic will of citizens.

And so, on the pristine white walls of the Scottish Parliament, scrawled in the glistening black of North Sea crude, should be a simple message to those with the capacity to make the decisions about which of these futures we choose: we were defeated by the oil barons and their UK Treasury side-kicks. It must never happen again.

Robin McAlpine is director of the Jimmy Reid Foundation

5 Responses to “Let’s not revisit the oil con”

  1. Jim Osborne says:

    The point regarding developing renewable energy in Scotland is well argued….the renewables program must be built on a model of decentralised ownership of infrastructure. This in turn is predicated on a new bolder phase of land reform as has been argued elsewhere by Andy Wightman. The right of communities to purchase land must in circusmtances other than when it comes up for sale must be enshrined in the law….the principle on which the right to buy should be based is a “public interest test” and if a community can demonstrate a use for land that it wishes to acquire is in the greater public interest than its current use then the transfer should proceed. Thought will need to be given to the criteria which should underpin this public interest test but surely it will be easy for a community to demonstrate that the acquisition of land to build local renewable infrastructure which can facilitate further economic development meets a higher public interest than the use of that land for grouse shooting moor.

    The argument regarding oil and gas is not so convincing. Production in the North Sea needs to be run down and finally closed down over a relatively short time scale (8-10 years I would argue)….whether that can be best achieved by the state taking control of the run down or whether the energy companies can be left to do it is a point for further debate. Upsetting the fossil fuel companies by increasing production taxes may well serve the run down cause better …. the threat to pull out no longer has the same clout where the country is committed to run down of production. As I have argued in “Building a New Scotland” the revenues from North Sea production over 8-10 years is not sufficient to create an oil fund or other sovereign wealth fund and the revenues ought to be streamed via a National Infrastructure Bank 100% to support the renewables program and the related land purchases.
    The route to a sovereign wealth fund is through the nationalisation and collectivisation of occupational pension funds….a proposal to which I am now turning my attentions….any takers for a collaboration on this??
    JIM OSBORNE, Glasgow

  2. Jim Osborne says:

    I need to qualify my previous comment should anyone conclude that I think grouse moor has no public interest value. The criteria for a “public interest test” will have to include environmental sustainability elements and there may be sound environmental arguments for retaining grouse moor rather than hand it over for a community windfarm development. The environmental destruction in the 80s in Scotland’ s Flow Country in Caithness & Sutherland by forestry plantation on pristine and internationally unique blanket bog is a lesson to us all of the damage that can be done by excluding environmental sustainability criteria from a public interest test.
    Jim Osborne, Glasgow

  3. Hearthammer says:

    Surely the eventual outcome of renewables is for people to own their own means of generation, only falling back on central generation when renewables fail? Surely if people are offered their own power generation, the times when the power is not being used will see that excess power transferred onto the grid with the cash for this offset against future bills. This would then banish fuel poverty at the proverbial stroke and ensure power was available to all for little more than the initial government investment.

  4. stuartinthewest says:

    well nationalization would be great, I also think we should re nationalize telecommunication and now digital communications, as well as a host of different services. if we could go that way in the EU?

    for my rant I’d hope it would be on a multiple level of co-operative worker ownership, citizen-share holder-ship, as well as vetted private investors and local and central government. but apart from the individuals, who work in the business, the said national companies would be free from political interference except when it comes to price’s and work practice of course,

    off set sounds like a great idea but there is also a slovenly culture be it heat waste over use of cars over consumption of all kinds which has developed over the last 30 years in conjunction with neo-liberal culture, there are a lot of things that should be built or maintained in a national or cooperative level, but there is also the supermarket culture and the like which could go a long way to helping things in general. speaking of which,

    The only Tory idea I think I ever agreed with was the tax on sugar, or confectionery, it is cheaper to eat poorly than healthily in Scotland. and it is not a reflection of the true traditional diet we have here.

    You notice it when you live out here in Vancouver or down in London as I have and am doing at the present. not that I want to give up lorn sausage, it might be better not to be a staple, again I think proactive support buy government , for healthy food to be in the price rage for those that probably need it most might help. and education at school, celebrates really jumped on that zeitgeist.

    integrated schooling with life education school staff and teachers all participating home economics biology, gardening, canteen staff and grounds workers, working with kid’s and teachers to work out the connections in life. You could add in aspects of history, geography and Scottish cultural studies even language, might sound a bit hippyish, but might be more grounded if we now have such a young electorate.
    nationalized industries came from a time of strong national and communal consciousness that existed just after the war, for people to see relevance know we have to come to it through education, because we’ve lost to much, what you could of gotten away with if they are going to be able to access the future potential of Scotland and not find them self’s locked out of it buy, people poised for that opportunity which white settlers have seem to have been able to do for years, I live in the pleasant land of Canada, really it’s a trip Andy Whiteman.

    I don’t know if they do it but anyway I could go on

  5. Maggie says:

    The current planning system does not take into account who is going to build the wind turbines, this hands larger companies an edge over community run projects as they have people who understand the planning laws well and the financial backing to get these projects done.

    What fills me with concern is who will organize these community wind turbines? If the answer to that question is local government the counter argument to that is I live in Aberdeenshire and work in Aberdeen, local government has not been much of an inspiration so far. To put it mildly. It’s no better down South, ask the residents of Leith when the next tram is coming and as for the national disgrace that is some of the post apocalyptic parts of Glasgow the less said the better.

    The point being that local government is perhaps not the best at running business or implementing visions for the future, that is not it’s job, in my opinion it should be creating the conditions which allow business to flourish (as well as creating communities that care about their surroundings and making everyone feel like they are part of society ).

    There are examples of Wind turbine projects that have a direct benefit to the community and there are some examples of the exploitation of Scotland’s wind by foreign Energy companies. Which should be a priority of the current administration to try and discourage.

    A simple solution would be to give part ownership of any new scheme to the residents surrounding the scheme and to prejudice against multinational schemes at the planning level.

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