Dissecting the McCrone Report, the official secret of Westminster

It appears appropriate to put this report into plain English, highlight its significant areas and make it very straightforward for the average person to understand the main thrust of this “official secret”.

The McCrone report is a document often referred to by Nationalists or those generally in favour of the restoration of Scotland’s sovereign powers as something of a mystic Holy Grail with regards to proving Westminster's lies and deceit.

For those who have read it, it’s shocking. The reaction to its draft by Westminster is even more so. The report was buried in the Whitehall’s vaults for 30 years under the auspices of the “Official Secrets Act”.

As we all know, the Official Secrets Act is there to protect The State form prejudicial interferences which may affect National Security. Therefore, we need to understand exactly what that is and how anything gets that designation. Was it appropriate in this instance?

Fundamentally a document can be classed as an official secret, if it contains information which is construed to be prejudicial to the State, basically the implication is the information could be used by enemies of the State, most often such classification would be seen in times of war and applied to military aspects of the State. A democracy really should not have official secrets of a civilian nature, especially during periods of peace.

Therefore, in the UK almost any official article prejudicial to the perceived security or interests of the State can be designated an officially secret document, and an individual could apparently have been prosecuted based upon character alone if it were even suspected they might have been thinking about discussing or disseminating it. Talk about character assassination.

Every appearance is that the UK government is substantially abusing its authority by invoking this heavyweight power against a peacetime document, which simply asks questions surrounding the implications of a mineral deposit discovered within one of its constituent nations.

It is clear this report was classified as an “official secret”, for to release it would have ended London rule. The pretext was it endangered the state as controlled by the UK parliament, and it had to be crushed prior to any distribution. The reason being, if it became public knowledge then attempts at suppression could easily be argued to violate UN charters on the rights of indigenous populations.

At a minimum, it could/should have lead to an entirely different Scotland today.

In reading the report it is obvious the Westminster government of the day put London before Scotland and chose, in time of peace, to enact legislation designed to protect the state against antagonistic foreign interests.

The only available interpretation here was that the London government viewed Scots knowledge of the report as an inimical foreign interest.

Reading the report it becomes clear why there was a cover up and why confusion, confabulation, lies and misdirection remain the apparent order of the day for many in the London establishment even as we head for another Scottish independence referendum – having won the first in 1979.

The report commissioned by Ted Heath in 1974, was written specifically to assess the implications for Westminster with regards to both the SNP and the EEC following the discovery of North Sea Oil. Heath lost the October general election to Harold Wilson. Both Labour and the Conservatives could have come clean and revealed this report. Neither did.

The paper began by acknowledging that “the whole framework within which the economic implications of nationalism were argued has indeed been altered”. Fundamentally the opening paragraph says it is a whole new ball game and Scotland’s just been gifted an unassailable 5-0 lead.

The document continues by highlighting the underlying causes of discontent in Scotland and acknowledges “these problems have not been overcome, nor do they look as if they will be in the foreseeable future”. McCrone is basically stating that under the political status quo, Scotland can only anticipate the status quo of poor health, deprivation and relative economic stagnation.

We can assume any government would not wish this for its electorate, no matter how small a portion. Westminster evidenced this is not the case in London. The only clearly available interpretation is that Scot’s don’t matter.

McCrone therefore concluded the opening overview with the statement “The importance of North Sea oil is that it raises just this [economic] issue in a more acute form than at any other time since the Act of Union was passed”.

In plain English – the discovery of the oil is a game changer and not one Westminster can defend against, it threatens the very existence of the British State more than anything else has in almost three centuries.

Fundamentally that statement put it into the realms of the Official Secrets Act. The report, if released, had every expectation of undermining the establishment within the British State.

The inappropriateness of burying this document was irrelevant in the eyes of the ruling government of the day; to make this an “official secret” was a fundamental requirement for Westminster. It did not matter that they were lying to an already deprived populous, who were no external threat. It had to be buried, before a strong campaign of disinformation could proceed. This led to the 1979 referendum which the Unionists still lost.

As the report progresses McCrone acknowledges that Scotland’s main impediment to national economic success is Westminster and its London-centric policies. He states it is “partly a question of the scale of the Scottish economy, but more of the extent to which it has been integrated with the rest of the UK [England] over the last 270 years”.

In his next paragraph he ties both unemployment in Scotland and migration from Scotland to the effect of the Union and its policies before stressing three ways an independent Scots government could prosper. 

He recommends protection of Scotland’s existing and new industries through taxes and tariffs, but indicates that there may be repercussions from the EEC; though he describes that what may come from the EEC is likely to be insignificant in comparison to the reprisals from England.

Basically he’s saying an independent Scotland shouldn’t expect Westminster to play nice.

He then suggests a Scotland implements a self directed fiscal policy, one which benefits Scots, not London.

McCrone makes the case that this independent Scotland could afford policies that England could not match. He’s basically warning Westminster at this point that they should expect to have an economic powerhouse as a neighbour, small in relative size but wielding far more power in this present world.

He then proceeds to discuss the Kilbrandon Commission and its ramifications, where Scotland was shown to need English subsidy. However, Kilbrandon had ignored oil revenues, and consequently showed the need for a reduction in an independent Scotland’s budget, a subsidy from England or significant borrowing.

McCrone disagreed with Kilbrandon, noting even then without oil, it would be feasible for an independent Scotland to balance the books. Achieving this end primarily by no longer contributing to the extremely high UK defense budget and by implementing a modest devaluation of the Scots pound. Other potential implications were viewed by McCrone, but none were seen as “deal breakers” on the path to independence. He noted that with the advent of oil, the Kilbrandon Report was a dead duck; however, Westminster used it most effectively.

In the report, McCrone went so far as to suggest without considering the discovery of oil, that the above measures would be enough to stimulate the economy, provide jobs and growth and put the nation on a firm footing.

With the discovery of oil he noted, it might be difficult to contain the rise in value of the Scots pound.

It’s useful to understand that Scotland under UK fiscal policy has seen more than a 100% currency devaluation since the McCrone report. Under Westminster’s stewardship our current high point in Scotland is that we’re now stumbling into “Austerity”. No one can predict what might have happened had we the control of our own fiscal levers for the last thirty five years, but we can safely say it would have taken several administrations exhibiting unforeseen levels of gross incompetency to take us anywhere close to the area Westminster has us today. Effectively in the time since this report was written nothing has changed.  

McCrone then concludes his opening gambit by saying that for Scotland to succeed, Scotland requires economic sovereignty.

Economic sovereignty is what our upcoming referendum is truly about.

McCrone then proceeded to discuss the oil issue in greater depth – making it clear he was simply referencing Scotland’s “traditional” industries to this point as he clearly states “the analysis in the last section is based upon the situation as it appeared before the discovery of North Sea Oil”.

McCrone begins the section on oil’s implications by stating the department of trade and industry is hiding the revenue data from the public, the values he assigned have been removed or redacted from the original report by the UK government, it was apparently done with a black marker.

The document concludes that paragraph by saying the “significance of this [omission of true value] has probably not been appreciated by the public”. Or in other words “I believe the public has no idea of how much you are lying to them by omission”.

McCrone then attacks Westminster for rubbishing SNP claims about values and mismanagement of resources without making available documentary evidence, but acknowledges the government’s case was being bought by the Scots voting public who were being led to believe the SNP figures were “pretty wild”.

He then alluded to how Norwegian policy supported the SNP claims of Westminster incompetence. He went so far as to use the phrase “This has shown the total inadequacy of government arrangements to secure revenue…” before concluding the section with the clear and unambiguous statement “all that is wrong with the SNP estimate now is that it is far too low”.

So, the SNP grossly underestimated the oil revenues, Westminster used the media with all its might, convinced the Scots that the SNP estimate was “pretty wild” on the high side and that it would “run out soon” while all along, London was fully aware that the SNP was grossly underestimating as only Whitehall had the real data.

That’s on top of the fact Scotland already had a viable economy even without the oil.

The report then advanced into the realm of oil revenues on Scotland’s balance sheet, concluding that she could fundamentally be in better position than Norway presently discovers herself, with the statement “What is quite clear is that the balance of payments from North Sea Oil would easily …. transform Scotland into a country with a substantial and chronic surplus”.

This is worth repeating. Scotland would have no deficit, Scotland would have no debt.

McCrone went on to state that these numbers and statements were based on estimates that were already very conservative and consequently, the true picture for Scotland was much brighter than that painted above.

Interestingly the document then goes on to discuss the ability of England to claim a proportional level of North Sea Oil based upon a UK asset claim and demand disbursion based upon population ratio, effectively giving England over 90% of North Sea Oil reserves. The report threw this assertion out with both the baby and the bathwater. It stated “Dispute on these matters might well occasion much bitterness between the two countries, but it is hard to see any conclusion other than to allow Scotland to have that part of the continental Shelf which would have been hers if she had been independent all along.”

McCrone concludes this section of his report with the following summary, a summary as accurate today as it was over thirty five years ago.

“lt must be concluded therefore that large revenues and balance of payments gains would indeed accrue to a Scottish Government in the event of independence provided that steps are taken either by carried interest or taxation to secure the government ‘take’.

“Undoubtedly this would banish any anxieties the government might have had about its budgetary position or its balance of payments. The country would tend to be in chronic surplus to quite an embarrassing degree and its currency would become the hardest in Europe with the exception of perhaps the Norwegian kroner”. 


McCrone hypothesized that a Scots pound would be worth 20% more than Bank of England issue within two years, with little to no downside in the Scots economy. 

“Just as deposed monarchs and African leaders have in the past used the Swiss franc as a haven of security, so 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 a speculative inflow of foreign funds”.

Effectively this can be taken to read that there would have been no banking collapse or credit crises in an independent Scotland, whereas what happened under Westminster’s guiding gauntlet is now a matter for the historians.

The McCrone report concludes with a reasonably detailed examination of steps the Scottish Government could take to ensure Scotland’s prosperity over the longer term; there were surprisingly few negatives or cautionary aspects.

If this 1707 Union were a private contract, Scotland would carry none of the UK debt and in the upcoming negotiation for independence, Westminster would be open to severe penalties for fraud and deception.