Steel: oil fund failure a "major strategic error"

Former Liberal Party Leader David Steel has admitted that Westminster made a “major strategic error” in not setting up an oil fund upon the discovery of North Sea oil in the 1970s.

Lord Steel, who later served as the first Presiding Officer of the Scottish Parliament, said that he pushed the Callaghan government in 1977 to create a separate account for oil revenue which could have been used on major infrastructure projects but that he believes the opposition to creating an oil fund was down to the UK government wanting to spend the “bonanza” from the new revenues.

In 1974 Professor Gavin McCrone wrote a report which stated that Scotland would have had an “embarrassingly large tax surplus as a result of the North Sea oil boom”. UK governments kept this information under wraps until it was eventually released in 2005.

Lord Steel’s revelation comes on the back of comments made by former Labour Chancellor Denis Healey in May of this year admitting that the Treasury purposely played down the value of Scotland’s oil reserves in the 1970s because of the possibility of Scottish independence.

Commenting, SNP MSP Maureen Watt said:

“Today’s revelations from Lord Steel show just how short-sighted Westminster is when it comes to making decisions on natural resources with long-term consequences.

“Had the oil and gas resources off our coasts been invested wisely, we would be far better placed to grow our way out of recession by funding capital investments.

“The fact of the matter is that Westminster simply cannot be trusted to treat the North Sea oil & gas sector as anything other than a short-term cash cow to be squeezed at every opportunity to prop up the Treasury’s crumbling books.

“It has already been shown that with responsibility for managing our own resources, Scotland would be in a stronger financial position than the rest of the UK.

“The more recent history unravels – with former Labour Chancellor Denis Healey’s revelations and now this form Lord Steel - the more compelling the case for a Yes vote becomes.

“The only way the oil industry will be managed on a long-term basis to the benefit of people in Scotland is with the powers of an independent Scotland that only a Yes vote in next year’s referendum will secure.”


Westminster made “strategic error” in choosing oil “bonanza” over separate fund