Peter Jones: SNP’s slip-ups on oil are revealing

Craig Murray hit the headlines after being vetoed as an SNP general election candidate. Picture: Getty

FAR from being ‘evil’ or ‘thick’, No voters had a much clearer understanding of the risks of independence, says Peter Jones.

According to Craig Murray, a former British ambassador and now a Scottish Nationalist, I and two million Scots who voted No to independence are either “evil, or quite extraordinarily thick”. What? Did he really say that? I’m afraid he did. It reveals a lot of things, but the point I want to pick up today is the absolute certainty that many Nationalists seem to have that they, and they alone, know the future, and the folly of that belief.

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The words he used were cited at the weekend when Mr Murray hit the news by revealing that the SNP’s party managers had vetoed any possibility that he could stand as a party candidate at the forthcoming general election.

The reason why need not detain us here. But I was so appalled by what he was quoted as having said about No voters that I looked up the blog he wrote in which the words appeared, more than once, I discovered.

His complaint is that the No majority had ensured five more years of Conservative government, which most of them would not want. This is because they would then get “tax cuts for the rich [and] benefit cuts for the poor” plus a long list of other nasty things. This, apparently, is why No voters are “unbelievably thick”.

The other motivation for voting No, according to Mr Murray, is that there are “hard-hearted right wingers” who relish the idea that the “consequences of what is coming will fall disproportionately on the poor, with even greater escalation of the UK’s astonishing wealth gap”. People who voted No on that basis constitute the “evil” ones.

Well, if you believe that everything in an independent Scotland will be better just because of independence, as many SNPers appear to do, then the use of “evil, or quite extraordinarily thick” as a description of No backers probably seems quite reasonable.

As I have said on many occasions, I do not hold to nationalism or any other ideology. I prefer to look at the evidence and go where the evidence leads me. And the evidence from the referendum, confirmed to an even greater extent since 18 September, told me that there was a better-than-evens chance of Scots finding themselves living in a country that was poorer than the one they had voted to leave.

The oil price collapse since September has made that even more probable. Independence would mean that the benefit cuts for the poor, the prospect of which so appals Mr Murray, would have to be even deeper.

Nationalists refuse to believe that is possible. The impossibility of this was asserted vigorously by online comments to last week’s column on the consequences of $60 oil. I especially enjoyed the comment by someone calling themselves Rod Stiffington that predictions of $74 oil in 2015, and $80 oil in 2016 was probably based on throwing darts at a dartboard.

No, it was an average from a Reuters poll of 30 highly-paid economists, all with very expensive computers and masses of data. But the dear Rod ignored this, saying: “If anyone can accurately predict world oil prices a year in advance, give me a call. I’ll make you rich.”

Ahem, as someone pointed out, the Scottish Government had already claimed to accurately predict oil prices, and had now been found to have been as bad as any other dart-thrower. Indeed, it looks like they have completely missed the board.

To me, what emerges from all this, as far as public finance planning is concerned, is the worthlessness of trying to predict what oil prices might be. Even more obvious is the danger of planning public finances on an assumption of high oil prices.

An economist friend of mine recently told me that he hates being questioned about future oil prices. He said that he had been asked that question several months ago and thought he had covered all the bases by saying it could be anywhere between $60 and $160. “Today it is $59,” he laughed, somewhat hollowly.

Given that the future is unknowable, for any government which gets a lot of revenue from a mineral resource, such as oil, the only sensible planning course is to assume that the price of the resource will be at the bottom of its historic range, yielding minimal revenues, and then anything above that would be a bonus which could be stashed away in a rainy day sovereign wealth fund, as indeed Norway has done.

Well, the SNP government continues to mouth these words saying, as John Swinney did only yesterday, that “oil is a bonus, not the basis of Scotland’s economy”. Unfortunately, that is just not true, and especially not true of Scotland’s public finances. If it was, I might have voted Yes. What many nationalists choose to forget, or didn’t know in the first place, is that it was several years after Norway first set up its oil fund before any payments from already flowing oil revenues were made into it. It used those years to cut public spending and raise taxes to bring the onshore public finances into a rough balance, so that the oil revenues genuinely became a bonus. Any year of unexpectedly low revenues now has, and this is the critical point, a minimal impact on public finances.

That could not be done in Scotland without creating even more austerity pain than is being endured now or is likely to come from the UK government. Some Scottish Government numbers provide the evidence. In 2012-13, total onshore revenues were £47.6 billion while total government spending was £65.2bn, a shortfall of £17.6bn.

To try and shift that balance to the point that oil revenues would be a bonus would inflict so much austerity misery that there would be rioting in the streets. Even middle-class people like me might be among the rioters, storming the Holyrood barricades. To not want that, Mr Murray, is not being “evil” or “unbelievably thick”. It is, I think, being sensible and rational.

And as for your exclusion from the SNP candidate ranks, might I suggest that it has little to do with your unwillingness to toe party lines over the bedroom tax or anything else, and a lot more to do with the probability that anyone who regards 55 per cent of the electorate with loathing and contempt is utterly unfit for public office.

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