WHITEHALL was gripped with fear in the 1970s that independence for Scotland, with the resultant loss of oil revenue to the Treasury, would plunge the rest of Britain into an economic crisis, according to previously secret documents just released.
Indeed, so great was the concern that senior Labour ministers at the time, including Denis Healey, who was the Chancellor, and the late Roy Jenkins, then Home Secretary, pleaded with Cabinet colleagues to put the brake on government plans for devolution.
While the prospects for the rest of Britain without oil were described as “grim”, the Treasury privately acknowledged that those for Scotland were so strong that Scots could have been one third better off than the English within a few years of separating from the rest of Britain. The revelations are contained in documents released under the 30-year rule from the Public Record Office at Kew and last night they led Sir Sean Connery, the long-time Scottish National Party supporter, to call for an inquiry into what he said was “collusion” to deny Scotland its proper share of oil revenues.
The documents show that in 1974 senior civil servants advised the incoming Labour Government to delay its promised devolution referendum in Scotland in order to prevent the destabilisation of the British economy. The advice was given against the background of a major electoral surge by the SNP that year on the back of its campaigning slogan “It’s Scotland’s Oil”. The SNP argued that an independent Scotland was economically viable and secured 11 seats at Westminster.
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The SNP’s electoral breakthrough created a feeling that Scottish independence was inevitable and sent shockwaves through Whitehall. It led one senior civil servant to tell incoming Labour ministers: “Progress towards devolution should be delayed for as long as possible, consistent with honouring the Government’s commitment to move down the devolution route and containing the SNP lobby in Parliament. The longer this can be played the better.”
Senior civil servants were alarmed that, if people in Scotland learnt the true worth of the North Sea reserves, it might prove the first step towards full independence.
The papers make clear that the Treasury was in no doubt that the SNP’s sums were correct — if anything, the Nationalists had underestimated how wealthy Scotland would be if it decided to go it alone.
One Treasury official gave warning of the impact on the rest of the British economy if Scotland moved towards independence and took control of North Sea oil. “The Scots have really got us over a barrel here,” he wrote. Another Treasury official predicted: “It is conceivable that income per head in Scotland could be 25 per cent or 30 per cent higher than that prevailing in England during the 1980s given independence.”
A referendum in Scotland was eventually held in March 1979 and while a slim majority of Scots voted for a Scottish Assembly, there were not enough “yes” votes to overcome the threshold of 40 per cent of the electorate that had been set by MPs in the Commons.
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NORTH SEA GOLD