Letter from Scotland: 22nd March 2014

The history of Scotland could well be written up as a search for energy. We began by cutting down the Caledonian forest, then cutting up the peat bogs, then mining the coal, then building hydro-dams and nuclear power stations, then drilling for oil offshore, and now building wind farms – on and off-shore. This week, the plan for one of the world’s biggest wind farms was given approval – 326 turbines 14 miles out in the Moray Firth.

Chancellor George Osborne 'Glee' at the estimates for oil
Chancellor George Osborne
‘Glee’ at the estimates for oil
Energy-related history can give us as much insight into our country’s character as the battles between the clans or the royal families, or the disruptions caused by religious sects or the industrial revolution or the class struggle. Would we, for instance, be having a referendum on independence if it wasn’t for “Scotland’s oil?”

The Chancellor, wisely or not, strayed into this minefield in his budget statement on Wednesday. George Osborne announced, with some glee I thought, that the official estimate of oil and gas revenues from the North Sea over the next four years had been downgraded by £3bn to £22bn and it would leave an independent Scotland, he said, with a shortfall in its government budget of £1,000 per head of population.

Nicola Sturgeon, the SNP’s deputy leader, responded by saying Westminster’s estimate of oil revenues “goes up and down like a fiddler’s elbow.” And besides, it took no account of the rise in revenue expected from the increased production which will surely follow the new investment by oil companies in the North Sea.

Freeze on whisky duty
Freeze on whisky duty
Mr Osborne pleased Scotland a little better when he announced a freeze on whisky duty, a cut in the tax on beer of a penny a pint and a cut in bingo tax to 10 per cent. How his major changes to pensions work out will have to be seen. Will retirees drawn on their pension pots and spend the money now or will they invest in annuities and the new pensioner bonds ? Scotland’s finance industry will be waiting anxiously to find out.

On Tuesday, the Scottish Labour Party published its “white paper” on further devolution. Finally, after some internal wrangling it seems, we have Labour’s alternative to independence. The Scottish Parliament, it says, should have more control over income tax, 15p out of every 20p. It should also take over the administration of housing benefit (allowing it to abolish the so-called “bedroom-tax”), some disablement benefits and the work training programme.

Crucially too, the Scottish Parliament should have the power to increase the income tax rates on the highest earners and reform the property tax system. The party leader Johann Lamont said: “ The Scottish Parliament would then have the power to reverse the Tory cuts for the rich and ensure that those with the broadest shoulders should bear the greatest burden.”

Meanwhile the Tories have been outlining a totally different direction of travel. At their conference in Edinburgh last weekend, their leader Ruth Davidson said: “We shouldn’t be digging deeper into people’s pay packets. The Scottish Conservatives are committed to cutting the tax bills of working Scots.” She talked of rewarding the “everyday grafters” and the “working class” and shaking up the “amoral” welfare state. Revolutionary stuff indeed.

The Thin Red Line History will not repeat itself
The Thin Red Line
History will not repeat itself
This, while a real revolution has been going on in the Ukraine…a president ousted, the province of Crimea lost. The small Ukrainian community in Scotland has so far supported the new pro-western government in Kiev. But I can’t help the thought that “it’s Russia’s oil” which will determine the outcome of this crisis. Back in 1854, the 93rd Sutherland Highlanders bravely held the “thin red line” against the Russians at Balaclava. But I doubt if we can do the same this time. Indeed, we shouldn’t attempt it. The referendum in Crimea has been decisive. We should accept the result, as hopefully we will do in Scotland in September.

Worrying though all this is, we won’t escape war or history during the Edinburgh Festival this summer. The programme has just been announced by the outgoing director Sir Jonathan Mills. One of his main themes is war, especially “the war to end all wars” which began 100 years ago this year. The programme includes Benjamin Britten’s War Requiem, “All Quiet on the Western Front” by the Thalia Theatre of Hamburg and Shostakovich’s Leningrad Symphony performed by young musicians from the Ukraine.