13 January 2016

Alex Salmond gambled Scotland’s future on a collapsing oil price


What was LBC thinking giving Alex Salmond his own radio show? The London-based talk-radio station is allowing the former SNP leader the run of the airwaves every Wednesday, shepherded by presenter Iain Dale.

The answer to that question (what was LBC thinking?) is, of course, clever old LBC, which is trying to expand its reach outside the capital and will now have tens of thousands of Nationalists north of the border tuning in online to hear their hero Salmond burble on and chuckle at his own (not very funny) jokes. He fancies himself as a man of the people, so he will also be good at talking to London taxi drivers and other callers.

I do hope that there is time though for Salmond to take a call or two about the oil price. In the referendum campaign of 2014, the SNP’s case was based on oil being at $110 a barrel. Oil is now standing at $31 a barrel and looks as though it has further to fall. BP is laying off thousands of workers in the North Sea and Aberdeen, and the “second oil boom” that Nicola Sturgeon spoke of in Shetland during the referendum looks some way off. The Nationalists’ sums on tax revenues – which looked optimistic at the time – were badly wrong.

That means that if Scotland had voted for independence – which right now would be ten weeks away – the soon to be independent country would be contemplating a massive black hole in its finances. Even under the indy-lite full fiscal autonomy – which the SNP has backed away from (funny that) – it was estimated by the independent IFS that there would be £7.6bn hole, and that was when oil was above $50.

Remember that post-independence the oil crash would not have been happening in isolation. Goodness knows what Salmond would have cooked up on the currency front, although if the London Establishment was telling the truth (and it was) when it said that there would be no currency union for Scotland with England, imagine how additionally unattractive the idea of rescuing Scotland would have been after oil fell through the floor. By now would a sensible Scot have grabbed the steering wheel from Salmond and forced the creation of a new Scottish currency? Even then, how robust and appealing would it be to investors? Would Scotland be begging to get into the Euro? Imagine the mess, happening right now, if the referendum had gone the other way.

Salmond is a gambler to his core. And like many a gambler he can shrug his shoulders, smirk when a bet goes awry and move on to the next adventure. But this was not the 3.45 at Kempton. This was not Frankel falling at the first fence at Ascot (yes, yes, there are no fences at Ascot, Frankel raced on the flat). The referendum involved the future of a country and its 5.3m people. The destruction to public services and economic distress that would have resulted does not bear thinking about. You think George Osborne has imposed austerity? Try imagining life in an independent Scotland in the second half of 2016.

Salmond makes much of his patriotism. Yet, he took a reckless punt with the future of the country he claims to love. While he strutted around the UN as the man who broke up the UK, Scots at home would have paid a very heavy price.

Iain Martin is Editor of CapX