The McCrone report is a document on the Scottish economy written and researched in 1974 on behalf of the British Government. It was composed by Professor Gavin McCrone employed at the Scottish Office using some information that was publicly available at the time. The document gave a favourable projection for the economy of an independent Scotland with a "chronic surplus to a quite embarrassing degree and its currency would become the hardest in Europe". It also noted that the Common Market or EEC meant that Scotland could pivot away from the rest of UK (if required) for trade. The report became public in 2005 when new freedom of information legislation came into effect.
The McCrone report occupies a significant position in the debate over Scottish Independence: the memo from UK civil servants to government ministers was confidential. At the time of the first devolution referendum the London government claimed that there was far less oil in the North Sea and Scotland's economic prospects were far worse than the views in the McCrone report in order to influence the referendum outcome. The false numbers provided to the electorate were covered up by maintaining secrecy on their own report.
Report content The eighteen-page report focused on the likely effects of North Sea oil revenue on the economic viability of an independent Scotland. The report stated:
It concluded:
UK political environment The document was dated 27 February 1974, one day prior to the February 1974 general election, and was produced as part of a series of briefing papers for a new incoming government. This election produced a 'hung parliament' with Harold Wilson of the Labour Party as Prime Minister. Another general election was called for October 1974, which gave Labour a slim majority in Westminster. The Scottish National Party recorded 30% of the Scottish vote in the October election, their best ever result at that time.
On 25 February 1975, less than a year after the McCrone report was made, the Paymaster General, Edmund Dell, made a statement in the House of Commons on Petroleum Revenue Tax. Dell was asked by Gordon Wilson, the MP for Dundee East and the SNP's energy spokesperson, for what the British government expected the revenues from oil would be. Dell answered:
Dell's answer was drawn citing the numbers from the McCrone report. Far from a cover-up, promises of a significant windfall from North Sea oil were public knowledge and were widely reported in the UK and Scottish media. Despite predictions of high oil revenues being broadly reported in the national press, the Scottish National Party failed to make a significant electoral breakthrough in the subsequent 1979 general election, losing nine of its eleven MPs.
Publication and reactions The report came to light in 2005 when the SNP obtained several UK Government papers under the Freedom of Information Act 2000. The full provisions of the Act came into force on 1 January 2005. Even though similar figures to those in the McCrone report were widely reported in the 1970s, Scottish nationalists have regularly presented the report as being deliberately covered up to hide oil revenue forecasts from the Scottish public and prevent growth in support for Scottish independence.
UK oil production peaked in 1999 and had declined 67% by 2012,UK oil production was 150Mtoe in 1999, and had dropped to 49Mtoe by 2012. 90-95% of UK oil comes from Scottish waters. but petroleum still contributed £35bn to the UK balance of payments in 2011. The UK government took an estimated £6,530m in direct petroleum taxes in 2012-13 plus £6bn in income tax, national insurance and corporation tax from supply companies in 2011-12. As of 2012, around 45% of UK oil & gas employees were located in Scotland. The North Sea oil and gas industry as a whole contributed £35 billion to the UK Treasury in 2014.
In his evidence to the Lords Committee on the Economic Implications of Scottish Independence in 2012, Professor McCrone stated that Scotland's GDP would increase by around 20% if North Sea oil were counted as part of it.
In an interview for Holyrood Magazine on 19 May 2013, ex-Labour chancellor Denis Healey (who served in the Cabinet at the time the McCrone Report was submitted) stated: "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."
Gavin McCrone has rejected any suggestion that his report was covered up, writing in 2022; "There have been suggestions in the press that my paper was suppressed or in some way hushed up. This was not so. It was a confidential briefing for Ministers and never intended for publication, just as other briefing papers for Ministers are confidential."
See also Government Pension Fund of Norway Sovereign wealth fund Commission on Scottish Devolution Dutch disease Government Expenditure and Revenue Scotland Resource curse
References
External links The McCrone report - The National, 27 February 2019 Original McCrone Report, published 1975 Searchable re-typed version of the McCrone Report, including Cover Letter The McCrone Mythology: A 1974 memo written by Scottish Office economist Gavin McCrone has acquired a mythical status for Scottish nationalists. But how much of the mythology is true?, These-Islands.co.uk, 26 February 2025 How black gold was hijacked: North sea oil and the betrayal of Scotland Independent.co.uk, Friday 9 December 2005 Hansard, House of Commons, Jan. 2012 North Sea oil gave Scotland 'massive' budget surplus, say Government records Still raising eyebrows | Holyrood Magazine