31 Aug 2016
August 31, 2016

Oil and reason


Scottish unionist leaders are overjoyed with the present low price of oil. Talking down the job prospects of North Sea workers is to them a fair price to pay for the chance to argue that the present oil price represents proof that Scotland just couldn’t manage on its own. Yet of course if it’s true that the 2014 SNP oil revenue projection was unrealistic because it used the highest ever oil price, then it’s obviously also true that no meaning can be attached to present, doom-mongering unionist revenue projections based upon the lowest ever price.

Last week, Prospect magazine carried a piece by a well-known Scottish unionist which did some simplistic arithmetic around the current oil price and GERS and was entitled; “Scotland spends more than it earns—there’s nothing else to it”. Leaving aside the way the hilarious over-simplification of that title treats Prospect readers like fools, it’s clear that the very price volatility unionists have used in the past to invalidate high SNP projections is now being used by them to make what in their own terms are equally invalid low ones.

Scottish unionists have have often accused independence supporters of refusing to engage in intelligent argument on difficult issues. This has at times seemed a well-founded criticism. But it cuts both ways. The 2014 referendum was to a considerable degree an exercise in political polemics on both sides. Yes campaigners over-stressed the then high oil price, while No campaigners racked up the fear and told everyone that voting No was the only way of staying in the EU. To some extent, this is the binary nature of most political battles.

And yet because that claim of remaining in the EU was so fundamental to the claims of the ‘No’ to independence camp, and is in retrospect so completely wrong to the extent of invalidating the result, it has taken debate around Scottish independence on to entirely new ground. In this new context, there is very real scope for supporters of independence to win the day through insisting on reason and exposing dogma, and through confronting the most challenging issues which have sometimes been side-stepped in the past. Crucially, while in 2014 he unionists were able to scare the risk averse into staying with the status quo, now the risk averse are increasingly more likely to wish to avoid the Brexit horror which Scottish unionists champion. The boot, as it were, is now firmly on the other foot.

The piece referred to above, for example, sees a non-economist confidently summarise his own simplistic and partial analysis of a complex set of economic issues with with; “there’s nothing else to it”. This is dogma, pure and simple. It’s a unionist politician shouting loudly in the hope that he’ll drown out reasonable voices, urging Prospect readers not not look beyond the his simplistic nonsense and glimpse his strange pro-Brexit logic.

In respect of oil, of course, most projections have the price rising steadily over the next few years to around the mid-point of the two sides’ claims. This level, we’re also being told by orthodox academics in the field, is more than enough to generate another upturn in employment and production in the North Sea given the right international conditions and decent national policy. Moreover, energy economists stress that the oil price at any one time is less important to futures than reserves and the pace of technological advance. Meanwhile, Scottish unionists forget to mention that the present price makes offshore oil part of UK debt rather than being an asset, and naturally debt would be shared upon independence. The truth, of course, is that HM Treasury would under no circumstances accept the present low price as a fair valuation of the UK oil and gas reserves. So when unionists stress the low present oil price, they know their words are simply hollow rhetoric.

By way of summary, therefore, it’s perfectly reasonable to argue that oil and gas would play a useful part in the economy of an independent Scotland, but it’s important not to claim it would either be a clincher or a disaster. Meanwhile, most small European nations don’t have oil or gas reserves at all. Moreover, all developed economies run deficits, so the annual Groundhog Day repetition of the same old GERS arguments doesn’t really tell us anything at all about the economic viability of an independent Scotland. Comparing Scotland’s economy under UK rule to an independent Scottish economy is to compare an apple with an orange. Indeed, it’s easy to imagine the editor of Prospect, a respected foreign policy journalist, gently pointing all of this out to the writer of the piece and asking for a wee recognition of it in amongst his dogma. How else to explain the reluctant inclusion in the piece of: “None of this is to run Scotland down, or to say it is too wee or too poor to be independent. Scotland is wealthy today”?

As we move towards our next independence referendum, supporters of independence should insist on intelligent debate and expose unionist dogma wherever it rears it head (that is to say, all over the place). This will be challenging and difficult at times, but if the outcome of the last referendum is reversed it will be because dogma has been replaced by reason on the most important issues, and that this trend has moved the previously ‘unconvinced’ from No to Yes.

Economists, academics, experts diverge in their professional opinions as a matter of course, and the thinking they use to underpin their competing positions can easily become white noise to the general public. That may be annoying to them, but it’s just the way it is. Yet some ideas uttered by them can, if they articulate them right, help people gain a whole new perspective on important issues. So while it’s in vogue on the far right to rule out experts’ views at the moment, and of course we should recognise that experts often have their own hidden interests too, we should also be clear that if we ignore them altogether then we open up a larger space for those dogmatists (see Prospect piece above) to skew and distort public understanding.

The oil price and its place in a future Scottish economy? The place of fracking and other new technologies, or not, in an independent Scotland? Scotland’s management of its own debt? How an independent Scotland would increase its own growth? The Scotland/England border? The safety of pensions after Brexit? These are all questions supporters of independence can answer over time, whereas all the unionist Brexiteers have is the same old dogma, repeated ad infinitum in the hope the fear will work just one more time.

Over the coming months, fromnotoyes.scot will work to promote intelligent dialogue on the future of Scotland’s oil and gas, and on some of the other issues above. We’ll send out an occasional newsletter with summaries of the arguments and if you’d like to keep informed do simply email your email address in confidence to eric@ericjoyce.co.uk (addresses will be used only for the purpose of sending you the newsletter – proxy email addresses are absolutely fine. We’ll take your name off the list immediately if you request it).

In the meantime, do read Commonweal’s Robin McAlpine’s super piece on why we must engage fully with the economic questions questions asked by unionists. Because, in fact, while unionists think they’re rhetorical, they’re actually perfectly answerable by supporters of independence. That’s why reason is now more important than ever.