The Importance of the McCrone Report and Scotland’s Future

Gerry Hassan

Scottish Review, March 6th 2019

There was major interest and debate last week about a UK Government paper on Scotland – the McCrone report – written nearly 45 years ago.

The McCrone report was written in March 1974 by then Scottish Office civil servant Gavin McCrone for ministers in the aftermath of the UK general election the month previous. It was subsequently given a wider circulation in government in April 1975 with a covering letter but remained publicly unknown and unpublished until it emerged as a result of a SNP Freedom of Information request in 2005.

The report looked at the implications for Scotland and its economy of the coming on stream of North Sea oil, including revenue implications, and what this could mean for the prospect of an independent Scotland.

‘McCrone’, in the years since its first publication, has achieved almost mythical status, particularly within pro-independence opinion, offering proof if it were needed of how the British state treats Scotland. Published last week by ‘The National’ this saw SNP MP Hannah Bardell say: ‘For decades Westminster have suppressed and oppressed Scotland in many ways. The McCrone report is just one example’; while SNP MP Joanna Cherry stated: ‘The story of the McCrone report is a salutary lesson in these Brexit times on what British Governments think they can do to Scotland and get away with’.

There is no doubt that the McCrone report has become mythologised. For some its non-publication was a ‘suppression’ (Lesley Riddoch) and a ‘deceit’ (Kevin McKenna). For its author Gavin McCrone – speaking to Douglas Fraser on last Sunday’s ‘Good Morning Scotland’ – ‘It is always represented as something that was suppressed. It wasn’t suppressed. It was background briefing for incoming ministers’ after the February 1974 election.

Labour ministers in the 1974-79 government, over the course of five years in office, were struggling with a whole host of issues. They were elected with no majority in the February election, achieved a slender majority in the October election, and lost it through by-election losses and defections in late 1976. Alongside this precarious parliamentary arithmetic, they faced collosal economic anxieties, inflation peaking at 27%, public spending constraints, alongside navigating the challenge of Scottish and Welsh devolution, and in particular, the electoral threat from the SNP.

As McCrone reflects now Scottish Office ministers, then led by Willie Ross, did not really favour devolution, but felt that circumstances meant they had no choice but to go along with such plans, commenting: ‘He did say to me once: ‘We have just got to do this now’. He hadn’t been a supporter of devolution, but the political situation made it necessary.’

Some at the time including Tony Benn, Industry Secretary between 1974-75 and Energy Secretary from 1975-79, and Bruce Millan who succeeded Willie Ross as Secretary of State for Scotland in April 1976 supported the idea of an oil fund. This would have been a UK Government Fund, not a Scottish one, but it met significant UK Treasury opposition, taking up its traditional position as being the kernel of economic orthodoxy and centralisation.

Shetland and Orkney established oil-related revenue funds and managed to negotiate successfully with the oil companies that could have offered an example for the UK Government or Scotland. One road not travelled was that of the 1979 Scottish Assembly not being set up. If it had been it might have taken succour at the Shetland and Orkney examples and used its undoubted leverage to create a Scottish related oil fund. Substantial oil revenues did not start flowing into the UK Treasury until after 1980, funding a decade of Thatcher mass unemployment – a Scottish fund could have acted as a bulwark and even aided economic regeneration. The Norwegian oil fund which has created the largest sovereign wealth fund was not established until 1990.

The McCrone report has created many waves over the years. When finally published in 2005, many Labour politicians admitted that if it had been published in the 1970s things could have dramatically changed. Tam Dalyell, arch-anti-devolutionist said then, that if it published in the 1970s, it could have aided independence: ‘In my view it might have done. It could have tipped the balance [in] a number of seats including mine. Oil was very much a totemic issue. It was new and it was dramatic. Politics at that time was very different.’ Denis Healey, UK Chancellor and head of the Treasury from 1974-79, similarly reflected in 2013: ‘I think we did underplay the value of the oil to the country because of the threat of [Scottish] nationalism … I think they [Westminster politicians] are concerned about Scotland taking the oil, I think they are worried stiff about it.’

The McCrone report, written at a time of bleak British crisis and upheaval, and of doubt even about whether it could be successfully governed, painted a very different Scottish future when the oil started following. This was a country that, if independent, would be transformed in McCrone’s words:

The country would tend to be in chronic surplus to a quite embarrassing degree and its currency would become the hardest in Europe with the exception perhaps of the Norwegian kroner. Just as deposed monarchs and African leaders have in the past used the Swiss franc as a haven of security, as now would the Scottish pound be seen as a good hedge against inflation and devaluation and the Scottish banks could expect to find themselves inundated with speculative inflow of foreign funds.

It is a fascinating document and, despite the worries of the decade in which it emerged, contains optimism, energy and hope. There is, in the words of Douglas Fraser speaking to McCrone a belief that ‘government could dream big dreams’ informed by a ‘can-do attitude’. This animating spirit informed the Scottish Office in the 1960s and early 1970s and saw a wave of action such as council house building, slum clearance, new roads and motorways, the development of new towns, the creation of the pioneering Highland and Islands Development Board in 1965, and the Scottish Development Agency (which became Scottish Enterprise) in 1975, the latter in which McCrone had a role. It was a very positive Scotland, one believing it could make the country a better place for its citizens, and the opposite of how McCrone is presented by many nationalists.

Yet many supporters of independence in today’s Scotland present McCrone as part of an establishment stitch-up. It fits into a black and white caricature of the British state, and of Westminster and its politicians whose intention is to control Scotland and deny it the right to decide its own future destiny. It presents in an overblown manner a belief that Scotland was deliberately deceived in a cover-up.

There are many problems with this outlook. For a start, it completely overstates the nature of UK Government to the point of undermining any critique. The nature of the UK political system was under huge stress in the 1970s and facing severe economic, social and industrial challenges. In the proceeding decades has become more unequal and unbalanced, and its political order fragmenting and failing. Any analysis of the current state of affairs that Britain finds itself in is weakened in its plausibility if it is just presented as a perfidious Albion.

Secondly, there is a deeper lesson for Scottish independence that has become more crystal clear in the aftermath of the 2014 vote. Some independence supporters feel frustrated, particularly since the Brexit referendum, that there is no sign yet of a second indyref, with some searching for conspiracy theories about why we are not heading to independence.

It is also attractive to chart an alternative Scottish path from the 1970s if the McCrone report had been published – as in ‘The National’ front page last week: ‘How Scotland’s future was stolen’. But romantic yearning for Scotland’s ‘Black Gold’ and what might have been has now passed, as Stephen Paton, online editor of ‘The National’ put it, saying McCrone was ‘an explosive indictment of Westminster’s relationship with Scotland, but the ‘economic opportunity’ it describes is gone. Our future depends on us recognising that.’

What the retro-nat tendency misses is that Scottish independence – as we know from 2007, 2011 and 2014 – as well as the SNP surge of 1974 in which the McCrone report was written – does best when it has a sense of positivity and belief in the good and capacity of the Scottish nation.

Why should that be surprising? The lessons of the past for the future is that whatever the mess the UK is currently in, the best political outlook for Scottish independence supporters is to embrace the sunny uplands of a bright Scottish future and seize it as your own. Leave the doom mongering and pessimism to others, resist the urge of ‘we wiz robbed’ history, and focus on the prospects of a future different from the Brexit wreckage enveloping Westminster and likely to do so for many years to come.