Scotland and the Union

Frank Doran Excerpts

Thursday 29th November 2012 Commons Chamber

[Mr Frank Doran (Aberdeen North) (Lab)]

Our debates on Scottish issues are often tribal, so I was not surprised by the comments of the hon. Member for Perth and North Perthshire (Pete Wishart) or the degree of fundamentalism he showed in his speech, although I was surprised at his arrogance and his assumption that after an independence referendum the Scottish people would enter some sort of nirvana. That is not quite consistent with our history at any time I can recall.

The way the hon. Gentleman approached the whole issue underlines one of the major problems with this debate: the lack of fact. If we look ahead at what sort of country an independent Scotland might be—and we need to, because that is one of the things that anyone taking the referendum seriously would want to know—we can see what the various sides of the argument are presenting us with. What the Scottish Government are presenting us with at the moment is: “We’ll keep the monarch”, “We’ll keep the pound sterling”—perhaps—“and the Bank of England as our central bank”, and “We’ll remain part of the EU,” although that is still an open question. I was quite taken by what Mr Barroso—in effect, the chief executive of the European Union, who should know a thing or two about these things—said about an independent Scotland having to reapply. Mr Salmond leapt to his feet and said, “No we won’t. I know better.” That is basically the way all this has proceeded.

We are not being presented with facts; as my hon. Friend the Member for Glasgow Central (Anas Sarwar) said, they are assertions. I would be a wee bit kinder than that: they might be aspirations, but they are more likely the product of politicians who want to remove difficult issues from the agenda before the referendum. We would see a very different Scotland afterwards if it were outside the EU, forced to create its own central bank and introduce a new currency. I mention the currency because the only other similar experience that I am aware of is when the Czech Republic and Slovakia split. I think it was the Czech Prime Minister who said that they had agreed to keep the same currency, but within a matter of weeks that decision was changed and a new currency had to be created. I cannot see a Scotland in the same situation being any different, even if I believed that that was the intention. However, what we know so far—about the monarch, the pound sterling, the Bank of England as the reserve bank and being part of the EU—does not sound very much like independence to me.

[Mr MacNeil]

Will the hon. Gentleman give way?

[Mr Doran]

The hon. Gentleman has intervened many times and thereby had more than 10 minutes already. I would rather make my own contribution to the debate.

It is important that we have facts. One area where that is most important is the economy of an independent Scotland. It is quite clear from all their forecasts that the current Scottish Government would rely heavily on North sea oil revenues. My hon. Friend the Member for Glasgow North East (Mr Bain) has already made the point from the Front Bench, but I want to give a bit more detail, because it is extremely important that accurate facts are readily available. The first point to consider about the oil and gas industry is just how volatile these commodities are. Prices can rise or fall very quickly. I am old enough to remember in the 1980s when the oil price went from $32 a barrel to $8 a barrel virtually overnight. We lost more than 50,000 jobs in the north-east of Scotland when that happened. An independent country would have found it difficult to survive that event. Unless we are talking about a prosperous middle eastern country with no resources other than oil, it is very dangerous to rely on oil and gas for the economy.

We have to look at the research. The most accurate and trusted UK commentator on the oil and gas industry is Professor Alec Kemp of Aberdeen university. For decades, he and his colleague Linda Stephen have studied the UK oil and gas industry, and their regular reports are respected and accepted throughout the industry. The most recent report looks at the prospects for activity on the UK continental shelf following the recent oil tax changes. The report is very detailed and considers the prospects for oil and gas production in the next 30 years in the UK sector. In the last two years production has declined, partly because of the tax changes in the 2010 Budget, but also as a result of the large increase in unplanned shutdowns. That has had an almost immediate effect on the amount of revenue coming into the Exchequer. Also, the North sea infrastructure is very old, and there has been a large number of unplanned shutdowns.

The report details scenarios in which the oil price is $70 a barrel, and the gas price 40p a therm. The potential number of fields in production in 2042— 30 years from now—will fall from 300 to about 60. In that same scenario, oil and gas equivalent production would fall from today’s level of about 1.8 million to 584,000 barrels a day. That is at a price of $70 dollars a barrel and 40p a therm. At a price of $90 dollars and 55p, production would fall from 1.8 million barrels of oil equivalent a day to 520,000. Most of the money and energy would go into decommissioning the North sea platforms that were being rendered redundant, and I do not think it appropriate for a new country to build its economy around the destruction of its most productive industry. We need to see many more such facts on the table before anyone can make a serious decision about what is best for our country.