Home / Robert Farley / Oil! Black Gold! Scottish Tea!

Oil! Black Gold! Scottish Tea!

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Oil platform in the North Sea.jpg
“Oil platform in the North Sea”. Licensed under CC BY-SA 3.0 via Commons.

You cannot build socialism on a giant pool of hydrocarbons, Scotland edition:

If an independence referendum ends in a vote to leave, subsequent negotiations can take some time – so Alex Salmond was keen to make sure that, in Scotland’s case, talks would not drag on too long. He set March 24 2016 as Scotland’s Independence Day. History does not record, alas, what celebrations he planned – but we do know what kind of a future he promised. More generous pensions, a fairer education system, protection from welfare cuts – all bankrolled by huge oil revenues which the SNP expected to come flooding in from the North Sea. Now all that has changed, and changed utterly.

Just as the discovery of North Sea oil transformed the prospects for Scottish nationalism in the 1970s, so the collapse of the oil price has destroyed its economic rationale today. America has mastered fracking and doesn’t need to import much oil now; this has helped depress the price of a barrel from $110 to $30. Such prices mean less North Sea tax revenue, but the average motorist is also spending about £30 a month less at the pumps. For the UK, the stimulus from cheap petrol generally balances out the effect of lower North Sea receipts: a country of 60 million can absorb such shocks. A separate Scotland could not.

Had the referendum gone the other way, Salmond would be preparing his first Budget by now. In all likelihood he would be in a state of blind panic. His White Paper on independence envisaged Scotland enjoying almost £8 billion a year in oil revenue by this stage. But that was before the crash. The forecast today is just £100 million, some 99 per cent less than the SNP imagined. So the first question a newly-independent Scotland would have to answer is how on earth to fill the £7.9 billion black hole.

But hey, throw some of that oil together with reactionary nationalism, and you’ll have a stew that will be sure to get the neoliberals hopping mad! And that’s worth it, right?

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