TODAY.AZ / Business

North Sea oil bonanza "played down"

23 January 2006 [21:27] - TODAY.AZ
Newly released papers show that, in 1975, the Treasury was alarmed by the prospect that if the Scots realised how much oil lay under "their" territorial waters, there would be unstoppable pressure for independence.

The secret papers, uncovered by BBC Radio 4's Document programme, prompted Sir Sean Connery, a supporter of the Scottish National Party, to attack London's "contempt" for Scotland, UK's The Daily Telegrpah informs.

"The UK is not a democracy," he told the BBC. "All the power leads to London."

Publicly, in the economic crisis of 1974-75, the Government played down the extent to which North Sea oil would help the economy of an independent Scotland. But in private Treasury mandarins saw the oil reserves as the only hope for Britain to avoid economic collapse.

They conceded that research showing that the oil would give an independent Scotland the most powerful economy in Europe was, if anything, an underestimate.

David Walker, now Sir David Walker the recently-retired chairman of Morgan Stanley, advised the Government that if foreign investors thought that Britain would lose control of the oil, it could lead to a run on sterling that would precipitate a meltdown in the City.

At the time, the Labour Government's policy towards Scotland was to move down a road towards devolution.

Sir David advised the Government to prolong negotiations for as long as possible consistent with Labour's manifesto commitment.

"The longer this can be played, the better," he wrote.


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