It's Scotland's oil
Encyclopedia
Scottish National Party
The Scottish National Party is a social-democratic political party in Scotland which campaigns for Scottish independence from the United Kingdom....
(SNP) during the 1970s in making their economic case for Scottish independence
Scottish independence
Scottish independence is a political ambition of political parties, advocacy groups and individuals for Scotland to secede from the United Kingdom and become an independent sovereign state, separate from England, Wales and Northern Ireland....
. It was argued that the discovery of North Sea oil
North Sea oil
North Sea oil is a mixture of hydrocarbons, comprising liquid oil and natural gas, produced from oil reservoirs beneath the North Sea.In the oil industry, the term "North Sea" often includes areas such as the Norwegian Sea and the area known as "West of Shetland", "the Atlantic Frontier" or "the...
off the coast of Scotland
Scotland
Scotland is a country that is part of the United Kingdom. Occupying the northern third of the island of Great Britain, it shares a border with England to the south and is bounded by the North Sea to the east, the Atlantic Ocean to the north and west, and the North Channel and Irish Sea to the...
, and the revenue that it created would not benefit Scotland to any significant degree while Scotland remained part of the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
.
The SNP campaigned widely in both the February 1974 UK General Election
United Kingdom general election, February 1974
The United Kingdom's general election of February 1974 was held on the 28th of that month. It was the first of two United Kingdom general elections held that year, and the first election since the Second World War not to produce an overall majority in the House of Commons for the winning party,...
and subsequent October 1974 UK General Election
United Kingdom general election, October 1974
The United Kingdom general election of October 1974 took place on 10 October 1974 to elect 635 members to the British House of Commons. It was the second general election of that year and resulted in the Labour Party led by Harold Wilson, winning by a tiny majority of 3 seats.The election of...
using this slogan. At the February election the SNP gained seven seats in the House of Commons
British House of Commons
The House of Commons is the lower house of the Parliament of the United Kingdom, which also comprises the Sovereign and the House of Lords . Both Commons and Lords meet in the Palace of Westminster. The Commons is a democratically elected body, consisting of 650 members , who are known as Members...
and 22% of the Scottish vote, rising to eleven seats and 30% of the vote in the October election. The idea behind the slogan has proven to be controversial in discussions surrounding the financial viability of an independent Scottish state and still resonates to this day.
Background
The outcome of the February 1974 General ElectionUnited Kingdom general election, February 1974
The United Kingdom's general election of February 1974 was held on the 28th of that month. It was the first of two United Kingdom general elections held that year, and the first election since the Second World War not to produce an overall majority in the House of Commons for the winning party,...
saw the incumbent Conservative
Conservative Party (UK)
The Conservative Party, formally the Conservative and Unionist Party, is a centre-right political party in the United Kingdom that adheres to the philosophies of conservatism and British unionism. It is the largest political party in the UK, and is currently the largest single party in the House...
government led by Prime Minister
Prime Minister of the United Kingdom
The Prime Minister of the United Kingdom of Great Britain and Northern Ireland is the Head of Her Majesty's Government in the United Kingdom. The Prime Minister and Cabinet are collectively accountable for their policies and actions to the Sovereign, to Parliament, to their political party and...
Edward Heath
Edward Heath
Sir Edward Richard George "Ted" Heath, KG, MBE, PC was a British Conservative politician who served as Prime Minister of the United Kingdom and as Leader of the Conservative Party ....
with a plurality of votes in the election, but without a majority of seats in the House of Commons after the withdrawal of support by the Ulster Unionist Party
Ulster Unionist Party
The Ulster Unionist Party – sometimes referred to as the Official Unionist Party or, in a historic sense, simply the Unionist Party – is the more moderate of the two main unionist political parties in Northern Ireland...
. The Labour Party
Labour Party (UK)
The Labour Party is a centre-left democratic socialist party in the United Kingdom. It surpassed the Liberal Party in general elections during the early 1920s, forming minority governments under Ramsay MacDonald in 1924 and 1929-1931. The party was in a wartime coalition from 1940 to 1945, after...
led by Harold Wilson
Harold Wilson
James Harold Wilson, Baron Wilson of Rievaulx, KG, OBE, FRS, FSS, PC was a British Labour Member of Parliament, Leader of the Labour Party. He was twice Prime Minister of the United Kingdom during the 1960s and 1970s, winning four general elections, including a minority government after the...
had four more seats in the House of Commons than the Conservatives, and after the breakdown of coalition negotiations between Heath and the Liberal
Liberal Party (UK)
The Liberal Party was one of the two major political parties of the United Kingdom during the 19th and early 20th centuries. It was a third party of negligible importance throughout the latter half of the 20th Century, before merging with the Social Democratic Party in 1988 to form the present day...
leader Jeremy Thorpe
Jeremy Thorpe
John Jeremy Thorpe is a British former politician who was leader of the Liberal Party from 1967 to 1976 and was the Member of Parliament for North Devon from 1959 to 1979. His political career was damaged when an acquaintance, Norman Scott, claimed to have had a love affair with Thorpe at a time...
, the Labour Party led by Harold Wilson
Harold Wilson
James Harold Wilson, Baron Wilson of Rievaulx, KG, OBE, FRS, FSS, PC was a British Labour Member of Parliament, Leader of the Labour Party. He was twice Prime Minister of the United Kingdom during the 1960s and 1970s, winning four general elections, including a minority government after the...
ascended to power governing as a minority administration. In October 1974
United Kingdom general election, October 1974
The United Kingdom general election of October 1974 took place on 10 October 1974 to elect 635 members to the British House of Commons. It was the second general election of that year and resulted in the Labour Party led by Harold Wilson, winning by a tiny majority of 3 seats.The election of...
, Wilson went back to the country to ask for a renewed mandate.
During this time, in Scotland support for the Scottish National Party had been increasing after the seminal victory of the SNP candidate Winnie Ewing
Winnie Ewing
Winifred Margaret 'Winnie' Ewing is a Scottish nationalist, lawyer and prominent SNP politician who was formerly a Member of Parliament , Member of the European Parliament and Member of the Scottish Parliament...
at the 1967 Hamilton by-election
Hamilton by-election, 1967
The Hamilton by-election, in Hamilton, South Lanarkshire, Scotland, which took place on the 2nd of November 1967, was a milestone in the politics of Scotland...
. The political instability surrounding the general elections of 1974 represented a time of intense political campaigning in the UK, which further brought the SNP to prominence. It was during this time that the slogan "It's Scotland's Oil" came to the fore with the February election seeing 7 SNP candidates returned, rising to 11 in October. Some well known MPs such as Tam Dalyell
Tam Dalyell
Sir Thomas Dalyell Loch, 11th Baronet , known as Tam Dalyell, is a British Labour Party politician, who was a Member of Parliament in the House of Commons from 1962 to 2005, first for West Lothian and then for Linlithgow.-Early life:...
believe this was in no small part due to the "It's Scotland's oil" slogan employed by the Scottish National Party
Scottish National Party
The Scottish National Party is a social-democratic political party in Scotland which campaigns for Scottish independence from the United Kingdom....
.
The economic background to the claim was the discovery of oil in the North Sea
North Sea
In the southwest, beyond the Straits of Dover, the North Sea becomes the English Channel connecting to the Atlantic Ocean. In the east, it connects to the Baltic Sea via the Skagerrak and Kattegat, narrow straits that separate Denmark from Norway and Sweden respectively...
in the 1960s, and its coming on line in the 1970s. The majority of the largest oil fields in the UK sector of the North Sea
North Sea
In the southwest, beyond the Straits of Dover, the North Sea becomes the English Channel connecting to the Atlantic Ocean. In the east, it connects to the Baltic Sea via the Skagerrak and Kattegat, narrow straits that separate Denmark from Norway and Sweden respectively...
were found in the waters to the north and east of the Scottish mainland, with the more northerly fields found to the east of the Orkney and Shetland islands. Aberdeen
Aberdeen
Aberdeen is Scotland's third most populous city, one of Scotland's 32 local government council areas and the United Kingdom's 25th most populous city, with an official population estimate of ....
became the centre of Britain's North Sea oil industry, with many oil terminals such as that of Sullom Voe
Sullom Voe
Sullom Voe is an inlet between North Mainland and Northmavine on Shetland in Scotland. It is a location of the Sullom Voe oil terminal. The word Voe is from the Old Norse vagr and denotes a small bay or narrow creek...
on Shetland and Flotta
Flotta
Flotta is a small island in Orkney, Scotland, lying in Scapa Flow. The island is known for its large oil terminal and is linked by Orkney Ferries to Houton on the Orkney Mainland and Lyness and Longhope on Hoy....
on Orkney and at Cruden Bay
Cruden Bay
Cruden Bay is a small village in Scotland, on the north coast of the Bay of Cruden in Aberdeenshire, 26 miles north of Aberdeen.Just south of Slains Castle, Cruden Bay was the site of a battle between Danes and Scots under King Malcolm II in 1012...
and St Fergus on the north east coast of Scotland, being built to support the North Sea oil industry. In the early 1970s, there was a great deal of economic turbulence with the 1973 oil price shock
1973 oil crisis
The 1973 oil crisis started in October 1973, when the members of Organization of Arab Petroleum Exporting Countries or the OAPEC proclaimed an oil embargo. This was "in response to the U.S. decision to re-supply the Israeli military" during the Yom Kippur war. It lasted until March 1974. With the...
caused by the Yom Kippur War
Yom Kippur War
The Yom Kippur War, Ramadan War or October War , also known as the 1973 Arab-Israeli War and the Fourth Arab-Israeli War, was fought from October 6 to 25, 1973, between Israel and a coalition of Arab states led by Egypt and Syria...
, resulting in rising inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
coupled with high unemployment
Unemployment
Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...
, recession
Recession
In economics, a recession is a business cycle contraction, a general slowdown in economic activity. During recessions, many macroeconomic indicators vary in a similar way...
(also known as stagflation
Stagflation
In economics, stagflation is a situation in which the inflation rate is high and the economic growth rate slows down and unemployment remains steadily high...
) in Scotland and the rest of the United Kingdom. Thus the economic argument that formed the basis of the slogan was that while Scotland was part of the United Kingdom it had no control over royalties
Royalties
Royalties are usage-based payments made by one party to another for the right to ongoing use of an asset, sometimes an intellectual property...
and revenue from the majority of the oil which lay in the Scottish sector of the North Sea, and it thus could not be used to benefit of Scotland economically.
Reality of the claim
Given that Scotland is not a sovereign stateSovereign state
A sovereign state, or simply, state, is a state with a defined territory on which it exercises internal and external sovereignty, a permanent population, a government, and the capacity to enter into relations with other sovereign states. It is also normally understood to be a state which is neither...
, it has no effective maritime boundaries
Maritime boundary
Maritime boundary is a conceptual means of division of the water surface of the planet into maritime areas that are defined through surrounding physical geography or by human geography. As such it usually includes areas of exclusive national rights over the mineral and biological resources,...
; and any claims Scotland may assert are subsumed as part of claims made by the United Kingdom. It could be argued that there is no definitive 'Scottish' sector of the North Sea in the same way there is a Norwegian
Norway
Norway , officially the Kingdom of Norway, is a Nordic unitary constitutional monarchy whose territory comprises the western portion of the Scandinavian Peninsula, Jan Mayen, and the Arctic archipelago of Svalbard and Bouvet Island. Norway has a total area of and a population of about 4.9 million...
sector or a Danish
Denmark
Denmark is a Scandinavian country in Northern Europe. The countries of Denmark and Greenland, as well as the Faroe Islands, constitute the Kingdom of Denmark . It is the southernmost of the Nordic countries, southwest of Sweden and south of Norway, and bordered to the south by Germany. Denmark...
sector, or indeed a UK sector. However due to the existence of two separate legal systems in Great Britain
Great Britain
Great Britain or Britain is an island situated to the northwest of Continental Europe. It is the ninth largest island in the world, and the largest European island, as well as the largest of the British Isles...
— that of Scots law
Scots law
Scots law is the legal system of Scotland. It is considered a hybrid or mixed legal system as it traces its roots to a number of different historical sources. With English law and Northern Irish law it forms the legal system of the United Kingdom; it shares with the two other systems some...
pertaining to Scotland and English law
English law
English law is the legal system of England and Wales, and is the basis of common law legal systems used in most Commonwealth countries and the United States except Louisiana...
pertaining to England and Wales
England and Wales
England and Wales is a jurisdiction within the United Kingdom. It consists of England and Wales, two of the four countries of the United Kingdom...
, constitutional law in the United Kingdom has provided for the division of the UK sector of the North Sea into specific Scottish and English components. The Continental Shelf Act 1964 and the Continental Shelf (Jurisdiction) Order 1968 defines the UK North Sea maritime area to the north of latitude 55 degrees north
55th parallel north
The 55th parallel north is a circle of latitude that is 55 degrees north of the Earth's equatorial plane. It crosses Europe, Asia, the Pacific Ocean, North America, and the Atlantic Ocean....
as being under the jurisdiction of Scots law
Scots law
Scots law is the legal system of Scotland. It is considered a hybrid or mixed legal system as it traces its roots to a number of different historical sources. With English law and Northern Irish law it forms the legal system of the United Kingdom; it shares with the two other systems some...
meaning that 90% of the UK's oil resources were under Scottish jurisdiction. In addition, section 126 of the Scotland Act 1998
Scotland Act 1998
The Scotland Act 1998 is an Act of the Parliament of the United Kingdom. It is the Act which established the devolved Scottish Parliament.The Act will be amended by the Scotland Bill 2011, if and when it receives royal assent.-History:...
defines Scottish waters as the internal waters and territorial sea of the United Kingdom as are adjacent to Scotland. This has been subsequently amended by the Scottish Adjacent Waters Boundary Order 1999 which redefined the extent of Scottish waters and Scottish fishery limits.
Recent evidence by Kemp and Stephen (1999) has tried to estimate hypothetical Scottish shares of North Sea Oil revenue by dividing the UK sector of the North Sea into separate Scottish and UK sectors using the international principle of equidistance
Equidistance principle
The equidistance principle or principle of equidistance is a legal concept introduced in maritime boundary claims.The phrase denotes a concept of political geography and international law — that a nation's maritime boundaries should conform to a median line equidistant from the shores of...
as utilised under the United Nations Convention on the Law of the Sea (UNCLOS) - such a convention is used in defining the maritime assets of newly formed states and resolving international maritime disputes. The study by Kemp & Stephen showed that hypothesised Scottish shares of North Sea oil revenue over the period 1970 to 1999, varied to as high as 98% dependent upon the price of oil and offset against taxable profits and the costs of exploration and development.
Nevertheless a Scottish share of North Sea oil is never formally alluded to as part of Scotland's net fiscal position and is treated by HM Treasury
HM Treasury
HM Treasury, in full Her Majesty's Treasury, informally The Treasury, is the United Kingdom government department responsible for developing and executing the British government's public finance policy and economic policy...
as extra-regio resources. The BBC
BBC
The British Broadcasting Corporation is a British public service broadcaster. Its headquarters is at Broadcasting House in the City of Westminster, London. It is the largest broadcaster in the world, with about 23,000 staff...
economist Evan Davis
Evan Davis (journalist)
Evan Harold Davis is a British economist, journalist and presenter for the BBC. In October 2001, Davis took over from Peter Jay as the BBC's economics editor. He left this post in April 2008 to become a presenter on BBC Radio 4's Today programme...
however reported prior to the 2007 Scottish Parliament election
Scottish Parliament election, 2007
The 2007 Scottish Parliament election was held on Thursday 3 May 2007 to elect members to the Scottish Parliament. It was the third general election to the devolved Scottish Parliament since it was created in 1999...
that the Barnett formula
Barnett formula
The Barnett formula is a mechanism used by The Treasury in the United Kingdom to adjust the amounts of public expenditure allocated to Northern Ireland, Scotland and Wales automatically to reflect changes in spending levels allocated to public services in England, England and Wales or Great...
already allows Scotland to sustain higher levels of per capita
Per capita
Per capita is a Latin prepositional phrase: per and capita . The phrase thus means "by heads" or "for each head", i.e. per individual or per person...
public spending
Public finance
Public finance is the revenue and expenditure of public authoritiesThe purview of public finance is considered to be threefold: governmental effects on efficient allocation of resources, distribution of income, and macroeconomic stabilization.-Overview:The proper role of government provides a...
relative to the rest of the UK, which is approximately equivalent to its disproportionatly high annual contribution of tax revenues to the central UK Treasury from Oil production. However Scotland's per capita spending growth, relative to the rest of the UK, has in recent years, been nominally reduced by the operation of the Barnett formula, in order to bring public spending levels into line with the UK average, in a phenomenon that had been dubbed the "Barnett Squeeze".
Recent evidence
Evidence unearthed in late 2005 under the Freedom of Information Act has shown significant UK government concerns over the rising tide of Scottish Nationalism during the early part of the 1970s and the consequences that this may have had upon ownership and control over the UK's North Sea resources. A reportMcCrone report
The McCrone report was a dossier written in 1974 by Professor Gavin McCrone, a leading government economist, for the Conservative UK government into the viability of an independent Scotland....
written by the Scottish Office
Scottish Office
The Scottish Office was a department of the United Kingdom Government from 1885 until 1999, exercising a wide range of government functions in relation to Scotland under the control of the Secretary of State for Scotland...
economist Gavin McCrone for ministers in 1974 indicated that with ownership of North Sea oil, an independent Scotland would have "embarrassingly" large tax surpluses. The report also stated that the economy of an independent Scotland, with control over the majority of UK North Sea oil revenue, would have one of the "hardest" currencies in Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
and that "for the first time since the Act Of Union
Acts of Union 1707
The Acts of Union were two Parliamentary Acts - the Union with Scotland Act passed in 1706 by the Parliament of England, and the Union with England Act passed in 1707 by the Parliament of Scotland - which put into effect the terms of the Treaty of Union that had been agreed on 22 July 1706,...
was passed, it can now be credibly argued that Scotland's economic advantage lies in its repeal."