in - It's Scotland's oil

1 It is oommonplaoe, disooveryof:North'Seaoil and. entryto ~be EmCare factorsof majo~eoonomiosign~fioancefor 30otland~Alre~dybothiss"ea, ~heformer,featurewidelyintheSN' 'purpo~eofthi$paperistoreassesstheeconom ic argume~tsforanindependent,\Scotland~n the lightof thesedevelopmants,eapeoi~llythe discoveryof oil.\It willbe $hewnthatthe wholeframeworkwithinwhiohthe eoo~om1o'impli atioJ'of nationalismwerearguedhas impQttanceof thisis proo~bly~eaterthanis reco~isedat presentbythe majorityof the publicand itmay wellbe, therefore,thatthe ~isoove~yot NorthSea oil willoomett.

2 ' $omethingofa ~~ ~. oasefor Scottisnn~tionalismis, of course, ~n attemptto e: ~ ~ :iol' ;tosaythatSoottiahnationalis!!)ha:so",en !!)1tobmoraconcernedwitheconomio. ~ !ation,ofa. l~n~a 'maincauseof disoontentis tha co'Untr,y's'Uns~tisfaotoryeoonomicperfor mancooverthe lasthalfoentury,espeoially~he p~rsi$tentunemploymentand netemigrationaboveall in th~ Weatof environmentalconditione,espeoiallyin and aroundthe oityot Glasgow,~companyth~ ~ ~or~and are as muoha sourceof ~ ,t~as~pro"b'1emeh;;;.venotbelilDovercome ,nordo th~ylookas if th~ywillbe ~n the foresee~blofutur~.

3 The assertionthatSootlandwouldbe eoonomio~llyb~1tezoff independent;and it is for ~ "SOlarl!f9in' 's'undoubt$cUypooreoonomicp erformanoetheSNPcase"\1 ~dcredibility .lIio$tpeopleregardedboththeirstatistics and argumentsas SU$pect,andtheycon:eThuedto'Oijlievtr 'tlra:t ~ ~ '.disadvant~efromthe i~portanceof HerinSea oil is thatit r~i5esjustihiSissueina mOJ:'EIaou'teformtha~ ' pa$ ~e C~ ~i~stNat:l,onl.\li~~, .',.Thetraditiopale~ , ~8/,'beent~ apolit~oal1yindepe! ~ ~gain."Hl fi?~~ ~Onol'/)iQsovere1intr' , ~';& ~scaleoftheSoottisheoonomy,cni;moreofthe exteni!

4 ~eQointegratedwitbthatof the res~of the UK oVerthe 1~$ ).andneed~,afast~r:rateof '$heor th~ m:,bashad'inr~oentyears4!'if shei:sto~ "excessbbou%"t"eaouro' :thereb,cut dOWI1oothunemploymentand migration.'1'hereare threeprihoipalw~s, ~o bringthisa~out;First11oo~lseekto fosterand. protectSoottishindustryby mean:;of suoHmeasureswo~ldriskret~ 'sclosetradetieswi~hEngland,couldoauseda magefar in exoessofanybeMfitthatm~' ; ~:continuedmembe~shipof ~C and withdrawal,especiallywithEngland,WaA~aan dIrelandremai,ningmembers,, ,fiscalpoliciesmightbe usedto giveespeoiallylargepenefitsto nC~industria.

5 ! ' 'a. taxfrontier< ,asstillexists,betweenmostErnCcountri$s, but th~neednot makeit ' ~ $$Jl?YiJ14i1 Iri:; ~ maindisadvantageis that EnglandwouldPfobablyfeelobli~dto ';;;. SQott:i" equivalentiri grantsor tax allowanoesforindustryinEn;;1ishand, ;!.ealwaysbeenina positionfinano~allywhere,if sb~ wished,sh$ couldh~"emorethaJ' measureswhioha ScottishGovernmentwouldbe ableto' " It is herethatthe budg$tarypositlonof a Sootti$hGov~~nmentbeoom$ ~$ ;ab~yt,heTreasury' 'theKilbrandonComnlissionhave'shownthatp ubli~'.

6 ExpenditUl"epeX" Sc:otlaJ:1dis UK average,whereaspu,bHc'revenuein $l~~htlYlowe~,largelybecauseScottish,inc ome$a~e $HmatestorSootlimdshowa.,"proportionatel ylar!er'borrowihg,req-ulreme11tthahforth elIt(asa ,.I })o~i'I: ioniac::oT1,fi:rmQci~nthGlmoatrocCln+.og ' ;oof'ScotlnndhJbud~tQ,:t'y, iono~X'X'ied9U~bytheJiJoonornioesThi$sho wsa 5cotti~hQu~rent'~ocvtintreqube1l! 'l1' StatistiosU~ito~ SEPPforIsurplusof a'netborrowing\~he1'eare"ofcourse,' 'Inthefir$tplaceit is not neoessaryto balancethe financeloansandvariousitemsof c~pitalinvestment, ~tic~larlythosewhichyielda return'by'borrowing" 'tE:!

7 N!aso,na~le;,otheritems~ 'timetotimepa;t"tioularlyifanexpansionaJ 'Y'budgetisnecessarytogener2a, higherlevelofeconomicaoii:i,vityinthe,eo onomy . ;a. netborrowingreq1~irementandwhihtthiswill norml3, ~$so;inthepreseniyear,for example,the 'borrowing!' 'tnereoordfigureof 4" 'bereasonabletofinanoe'byloan,thiswoulds til'1'J, Soottishdai'icitof ov~r .20Om.,a verysimilarfigurein1971/72to whatitl' ,-ha. figucouldoe coveredif it \!:x:ooptionally,it be toleratedas , ' ~ftha' $ :\<t6u1dinvolvea ' ~ 'bothfor;in'teres;;l'atesandmoneta!

8 ',' ..'\,'policy,unlessa substantialpar'tof it couldbe ScottGovernmentwouldtheref' 'totakesteps,to r(lduoethe '1" (,)1'1, ~uldb'eperfectly-possiblt, ,neoano,tprovokean intolerablesituation,espeoiallyif'defeno ewasoneoft)1Q,+l:emsout;.buttheywouldcX" f:lateabackgroundof acutebudgetary$.t~irtgenoyagainstwhich'i t is hardto see itbeing-pOSsibleto providea. :f' $ti!J1~l~sto encourageeoonomice:x; ' ~ demandfor exportsandm~ ~g~odsmo~e,co~petiti~eagainst,importsin ;respeotsdevaluntionwouldbe the obviousmeasurefor ;;!

9 OneconomyinSootland'sconditionwith per~istent~nemp~oymentta budgetarydeficitandprobablya ser10usadversebalanoeon the balanceof ,if the,latter,was pe~siatent,~t mightbe thatdevaluatiOnwouldbe inesoapable .'Exoha~g&rate.~djUat~~ntis, of C011~ae,the ulti~ateand moste teotiveweaponbywhichart eoonomicallysoverei,~ the sametImeavoidirtg' ')09of paymElnt~ ,ifScotlandcould'havedevaluedbya goodthump1~~25 ~ero~ntand madethe,~juert!f!4!!nt__ecreC';tiv$~inh~ lIJt:1ofcQettDtthiswould.' 1;)~ ~"solving$ 'seoonomioproblemsofthelasttwodeoades.

10 ,.tt,~ :,'be$tI.,B:r$'U-edthwtt1'\eI' :rate~~j'U;~tment,tnenot-malwa::}"ofdaE\ "ies,is not :t',the eoonomioc,;,seagainstSoottishnationalism h; ~ownto the .pro~ sitionthatan independentScotl~dwoul~not $ibletoQa:t'ry~ut an efte9~ be effective,devaluationinvolve~acountryin makinga out in its reallivin~stapdardsat leastuntilsuchtimeas,.,productionis~blet o the ScottisAlabourmarketis so closelylinket> r~stoftheUX th~titis~ '!d'tosee how realearninpcouldbeadjU$teddo~wardswithou tgiv;ngriseto the mostser~ ,suoha smalloountryhea~ilydependeht,on internatiOhaltrade,devaluationwould,ofoo urse,bave~erious~nflationa~yconsequenoes tsinceall im~o~tswouldris~ to a larga0lCtenton a GreatBdtainbasisand it is ha.