"Threat of sanctions forced UK into devolution"

I was reminded in the Scotsman today about one of the more goggle-eyed Nat myths.

"Dr. James Wilkie, Isle of Barra 27/06/2009 10:07:14

Yes, Labour and Conservatives are all admitting now that devolution has been a great success, but none of them is prepared to come into the open and admit that it was finally introduced only after threats of international sanctions against the UK. The vile methods used by Labour in particular in their unsuccessful attempts to kill the devolution project are a stain on British politics. I would suggest celebrating the tenth anniversary of the Scottish Parliament by opening all the relevant records of the Cabinet Office and the Foreign and Commonwealth Office. However, since that would effectively indict those responsible I am not waiting in anticipation."

Now this is on the list to be myth-busted, but that will have to be later.

For the moment, let's just contemplate the sheer bonkerosity of it.

So, supposedly devolution was "forced" on the UK by "threats of international sanctions" - from the Council of Europe, so the claim goes.

So this must be known about by hundreds of politicians and diplomats across Europe. Yet not one of them has ever blabbed to a journalist. The only people who know the "truth" are our friend "Dr Wilkie" and his pals in the "Scotland-UN Committee". Curious, isn't it?

Then there are "the vile methods used by Labour in particular in their unsuccessful attempts to kill the devolution project".

Well stone me. I thought I had this recollection of Smith, Dewar and Brown being keen devolutionists, Labour being active in the Constitutional Convention, making a manifesto commitment, bringing forward a bill, holding a referendum and all the rest of it.

Turns out I was mistaken - the whole thing was an illusion.

There are some odd people in the world, aren't they?

(Mind you, this is because some of them are really disguised, alien shapeshifting lizards.)

The new Scotland Office oil paper

...is now available on-line.

Now this ought to be useful for number-crunching and myth-busting, but let's first comment that the standard of written English in it is dire. What happened to the smooth, Oxbridge-educated Humphrys and Bernards of legend?

Another thing is that the data presented is in "money of the day" rather than "real terms" - it is unadjusted for inflation. Compare their oil price v. revenue chart:


...with my one from a previous post, in which the numbers were expressed in real 2007/8 terms:

Now this makes no difference for statements like:

"• If all North Sea oil revenues had been allocated to Scotland there would only
have been 9 years out of the last 27 when Scotland’s finances would have
been in surplus.
• Including all North Sea oil revenues the last year of surplus was in 1988-89
and since then there has been 18 years of annual deficits with Scotland’s
spending being greater than the tax raised in Scotland."

(NB there is a "sic" applying to the second bullet point here.)

However, if they have come up with:

"• Even if all oil revenues had been allocated to Scotland the total deficit would
have outweighed the total surplus by £20bn since 1980-81."

..by adding up a time series of money-of-the-day numbers, it is bolleaux.

(And I think I need to put a "sic" against this one as well. I think what they meant to say was "Even if all oil revenues since 1980-81 had been... ...the total deficit would...".)

I think I'm going to fire up the spreadsheet and check this. Back later.

...

And we're back.

There are indeed a bunch of balloons at the Scotland Office.

Using their charts (so a bit rough and ready, since I don't have access to the underlying data) I have been able to replicate their claim of a "£20bn cumulative deficit".

They did, indeed, get to this figure by adding up a time series of money-of-the-day numbers.

Twits.

When you convert to real-terms 2007/8 money (using the Treasury's GDP deflator series), it turns out that on these numbers, over the period Scotland was a net contributor to the tune of nearly £12bn.

But this assumes 100% assignation of oil and gas revenue to Scotland, which we know is not true.

The other figure used in the paper is 82.5%, which is probably broadly right given the GERS / Kemp & Stephen work (see here).


On the 82.5% basis, Scotland looks like having a cumulative £44bn deficit using money-of-the-day (which is wrong), and £29bn in real 2007-8 terms.

Which is broadly the same bottom-line answer the Scotland Office paper got to, but by using the right data and the right sums rather than the wrong ones (sigh).

Despite the shoddy and politicised analysis, there is useful stuff in this paper. It demonstrates that, even if you go right back to the beginning of North Sea oil, "Scotland's oil revenues" have stayed in Scotland. That is a powerful fact.

I'm thinking of emailing the Murph, though, and recommending that he re-issue this paper with the right sums done on the right data...

New GERS 2007/8 - total Scottish deficit deepens

The new version of GERS - covering 2007/8 - came out today.

The bottom line is that

"In 2007-08, the estimated fiscal balance in Scotland, that is the estimated current budget balance plus estimated net capital investment, was... a deficit of £3.8 billion (2.7 per cent of GDP) when an estimated geographical share of North Sea revenue is included."

This compares to last year's

"In 2006-07, the estimated fiscal balance in Scotland, that is the estimated current budget balance plus estimated net capital investment, was... a deficit of £2.7 billion (2.1 per cent of GDP) when an estimated geographical share of North Sea revenue is included."

Hilariously, "Hapless" Swinney is still attempting to spin things up by quoting only the current budget figures which show a tiny (~£200m) surplus. Always helps to only show half the result, doesn't it?

This change was utterly unsurprising as we already knew that North Sea tax revenues had fallen from £9.1bn to £7.8bn between 2006/7 and 2007/8.

Similarly, we already know that the 2008/9 North Sea revenue position will be a lot better - £13bn. The question for the overall balance is what effect the recession will have on other revenue sources and on spending, of course.

Another quick point to note that the Scottish geographic share of North Sea revenue is up from 84.5% in 2006/7 to 93.5% in 2007/8: this is a larger rise than expected last year, indicative of a faster-than-expected change in the balance of northern vs. southern production.

Of course, an increasing share of a decreasing quantity is not necessarily a good thing. All this means is that "Scottish" oil revenues were down 4.5%, while those of the UK fell by 13.8%.

The reported Scotland Office paper looking at overall historic oil revenues isn't on-line yet. Looking forward to this as it could be a valuable data source; previous work in this area (e.g. Taxpayers' Alliance) cut off around 1985 so omitted the oil revenues of the early 80s boom years.

Scottish "popular sovereignty" - I

Having tasted the delights of contemporary politics, let's go back to this notion of "the distinctive Scottish doctrine of popular sovereignty".

Now let us be clear. The claim we are contesting is not just that in Scotland (as in England and most of Europe) there was a process of shifting power from an absolute monarchy to the nobility and then to a parliament, the electorate for which gradually became more and more universal.

No, the claim is that in pre-Union Scotland there was an established "doctrine" that the "people" were sovereign, unmediated by any form of parliament.

Let's go back to the original fount - the 1320 Declaration of Arbroath (which for convenience I shall henceforth label the "DoA").

The first part of the DoA is a totally fictitious recitation of the historic roots of the Scots, together with a made-up list of ancient monarchs - these are the non-existent folks whose portraits you can see at Holyrood. (And yes, I do know that this sort of thing was par for the course in medieval declarations of independence, and that the Pope and the other senior people in the Church - to whom the DoA was addressed - were probably perfectly aware that it was cobblers.)

For our purposes, the important bit is this:

"Yet if he should give up what he has begun, seeking to make us or our kingdom subject to the King of England or the English, we should exert ourselves at once to drive him out as our enemy and a subverter of his own right and ours, and make some other man who was well able to defend us our King; for, as long as a hundred of us remain alive, never will we on any conditions be subjected to the lordship of the English. It is in truth not for glory, nor riches, nor honours that we are fighting, but for freedom alone, which no honest man gives up but with life itself."

Stirring stuff. An assertion that "we" would overthrow a king and choose another, in order to assert "freedom".

The problem with reading nearly 700-year-old documents is that the meanings of words change. (And this one was written in Latin, so there is a translation issue as well.) What did the authors of the document actually mean by "we" and "freedom"?

We can never really know. We do know, however that the "we" who attached their seals to the document were 49 nobles, sons of nobles and clerics (in those days, again sons of nobles). As I like to call them, Men with Fancy Titles and Hats.

It is as likely as not that, when this lot wrote "we" and "us", they meant "Us Men with Fancy Titles and Hats" rather than "The People" in the modern sense. And that by "freedom" they meant "Freedom of Us Men with Fancy Titles and Hats to choose which of us gets the Fanciest Title and Hat of all".

At this point we have to note, of course, that in England Magna Carta was in force, starting from 1215 and fully adopted as statute in 1297. This document also contained a lot of stuff about nobles having the power to decide who should become monarch, but also had much more specific and comprehensive rights for "freemen". The DoA may have had more stirring rhetoric, but Magna Carta gave much more protection for non-Fancy Hat wearers.

Which sort of trashes any claim that Scotland was "distinctively" ahead of England in the field of "popular sovereignty", does it not?

But we can look further at the historical record. If the DoA really was a declaration of "popular sovereignty" for "the people" as we currently understand it, then surely there will be further expressions and articulations of this over the succeeding centuries.

And as the pre-1707 Records of the Parliament of Scotland are now on-line and indexed, we should be easily able to find laws, decrees, speeches and resolutions attesting to this.

So, we've got the 1320 Declaration of Arbroath, and then we've got the...

...ah

...er

...um.

To be continued.

Calman Report published

Well well, the Calman Report is now out - all many hundred pages and multiple documents.

Nothing very surprising - devolution of a big chunk of income tax and some other small specific taxes, corresponding borrowing powers, a bit of adjustment of which things are devolved versus reserved, and some recommendations to make Holyrood work better itself and for better coooperation with Westminster.

The tax recommendation is quite clever. It isn't the level of the devolved rate which matters as much as the fact that the Scottish Parliament will have to make a positive decision in every budget about what that rate will be - the current option of doing nothing and just accepting the Barnett grant will no longer be possible.

I like the fact that the report puts things in a global context - despite the usual idiots (e.g. Mike Russell) shouting about "messy fudges", it is evident that most of the rest of the world operates multi-level government, and they are all fudges of various sorts - there is no unique "logical solution".

I have a couple of wonderings about the implementation. Firstly, legislation needs to happen at Westminster, and it will be interesting to see how Calman fits into all the other constitutional tinkering now being considered - term limits, PR, Lords reform, "English votes for English laws", and so on.

The other one is on the taxation and borrowing power. Having a power to borrow is all jolly and nice, except for the fact that we are already borrowed to the hilt against our existing revenues - so any additional Scottish borrowing will almost certainly need additional Scottish taxes. That would be an interesting argument for someone to try and make.

The key thing to watch for now will be whether the parties which sponsored the report now accept the results, and what they say about committing to implementation - both in Edinburgh and more importantly London.

If implementation commitments make it into all three of the main parties' General Election manifestos, then we wouldn't need to muck about having a pointless referendum, would we?

The "Saudi Arabia" of renewable energy

Grrr.

Here we go again. The potential of the Pentland Firth to produce electricity from tidal energy.

Gratuitous use of a phrase of meaningless Salmond / Nat spin which is guaranteed to get me reaching for my calculator.

"Saudi Arabia". Nice phrase, isn't it? Evoking images of us all wafting around in armoured limousines and never having to work.

Shame that it's utter crap, when you look at the numbers.

The Sustainable Development Commission - which is a pro-renewables government body - estimates in this report that the entire power production potential of the Pentland Firth is some 12.7 TWh per year.

That would require over 1600 separate tidal turbines totalling almost 3000 MW in capacity, operating at a load factor of around 50%. This would, of course, take decades and multi-billions of pounds to develop, since tidal stream turbine technology is not yet commercial.

Oh golly gosh. That's as much power as a new 1700 MW baseload conventional power plant (coal, gas or nuclear) would produce, running at 85% load factor. (1700 x 365 x 24 x 85%...)

So, far from being the "Saudi Arabia" of renewables, the Pentland Firth is more accurately the "Peterhead", "Longannet" or "Torness" of renewables. (1600 MW gas, 2300 MW coal, 1300 MW nuclear power stations, respectively.) Obviously worth having and providing a few high-tech jobs in the locality, but hardly a "Saudi Arabia" with the spin-worthy images of sheikhs and limos, no?

Can I rub it in a bit more?

According to BP, in 2008 Saudi Arabia produced 515 million tonnes of oil. Burning that would produce 6012 TWh of heat energy, which a 45%-efficient power station could transform into 2705 TWh of electrical energy.

So the "Saudi Arabia of renewables" equates to less than 0.5% of the real Saudi Arabia.

It's also only 3.35% of the UK's oil production (72.2 Mt in 2008).

Shall we look at the money side, too?

In 2008 oil prices averaged $97.26/bbl, and Saudi production in barrel terms was almost 3.8 Bn bbl. So the market value of that Saudi oil was $367bn. (The UK's production was worth $51bn.)

Using a wholesale electricity price of $100/MWh, the total market value of a year's Pentland Firth output would be $1.27bn. Only 0.35% of the real "Saudi" again.

And let's consider government tax revenues. Oil is specially taxed and yields large amounts of government revenue, while electricity is not. The only revenue the UK government sees is ordinary corporation tax from the owners of power plants, and as we know there is quite a lot of flexibility in where these multinational companies declare their profits have been earned.

On top of that, not a single tidal machine will be deployed in the Pentland Firth or anywhere else without the generous subsidies provided via the Renewables Obligation and paid for by consumers, i.e. us. So far from being a source of revenue, tidal power would be an additional cost for us all.

The point of this? Tidal power and other renewables may, possibly, be a good thing. But do not let shifty politicians like Salmond con you into thinking they could be some sort of energy or revenue substitute for North Sea oil as it declines, because it just ain't so.