McCrone report

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The McCrone report is a document on the Scottish economy written and researched in 1974 on behalf of the British Government. It was composed by Professor Gavin McCrone employed at the Scottish Office using some information that was publicly available at the time and some that was not. The document gave a favourable projection for the economy of an independent Scotland with a "chronic surplus to a quite embarrassing degree and its currency would become the hardest in Europe". It also noted that the Common Market or EEC meant that Scotland could pivot away from the rest of UK (if required) for trade. The memo from UK Civil Servants to UK Government ministers was classified “secret”; some have argued that this was to avoid fuelling independence sentiment in Scotland. The report became public in 2005 when new freedom of information legislation came into effect. [1] [2]

Contents

Report content

The eighteen-page report focused on the likely effects of North Sea oil revenue on the economic viability of an independent Scotland. The report stated:

UK political environment

The document was completed during the latter part of Edward Heath's Conservative government in 1974, just prior to the February 1974 general election. This election produced a 'hung parliament' with Harold Wilson of the Labour Party as Prime Minister. Another general election was called for October 1974, which gave Labour a slim majority in Westminster. The Scottish National Party recorded 30% of the Scottish vote in the October election, their best ever result at that time.

Publication in 2005

The report came to light in 2005 when the SNP obtained several UK Government papers under the Freedom of Information Act 2000. The full provisions of the Act came into force on 1 January 2005. [4]

UK oil production peaked in 1999 and had declined 67% by 2012, [5] but petroleum still contributed £35bn to the UK balance of payments in 2011. [6] The UK government took an estimated £6,530m in direct petroleum taxes in 2012-13 [7] plus £6bn in income tax, national insurance and corporation tax from supply companies in 2011-12. [6] As of 2012, around 45% of UK oil & gas employees were located in Scotland. [6] The North Sea oil and gas industry as a whole contributed £35 billion to the UK Treasury in 2014. [8]

In his evidence to the Lords Committee on the Economic Implications of Scottish Independence in 2012, Professor McCrone stated that Scotland's GDP would increase by around 20% if North Sea oil were counted as part of it. [9]

In an interview for Holyrood Magazine on 19 May 2013, ex-Labour chancellor Denis Healey (who served in the Cabinet at the time the McCrone Report was submitted) stated: "I think we did underplay the value of the oil to the country because of the threat of [Scottish] nationalism... I think they [Westminster politicians] are concerned about Scotland taking the oil, I think they are worried stiff about it." [10]

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References

  1. 1 2 "Original McCrone Report, published 1975" (PDF).
  2. 1 2 "Searchable re-typed version of the McCrone Report, including Cover Letter" (PDF).
  3. "North Sea oil 'could have made an independent Scotland as rich as Switzerland' - Switzerland - NZ Herald News". The New Zealand Herald. 15 December 2005.
  4. "The UK Statute Law Database-The Freedom of Information Act 2000 (Commenced No.5)order 2004". Archived from the original on 6 March 2009. Retrieved 27 January 2010.
  5. Earp, Mike (28 February 2013). "UKCS Oil and Gas Production Projections" (PDF). DECC. p. 4.UK oil production was 150Mtoe in 1999, and had dropped to 49Mtoe by 2012. 90-95% of UK oil comes from Scottish waters.
  6. 1 2 3 "House of Commons Hansard Debates for 25 January 2012". UK Parliament. 25 January 2012.
  7. "Statistics of Government revenues from UK oil and gas production" (PDF). HMRC. April 2013. p. 6. Retrieved 23 May 2013.
  8. "Oil and gas industry 'worth £35bn annually' to UK economy". BBC News. 23 April 2014.
  9. "Parliamentlive.tv". www.parliamentlive.tv.
  10. "Still raising eyebrows | Holyrood Magazine". Archived from the original on 7 April 2014. Retrieved 4 April 2014.