Tuesday, 7 July 2015

Chokkablog Videos

I thought I'd try to summarise what I've learnt through chokkablog in simple video format.

This summary vlog runs through all of the material as quickly as I could manage.  It's for those (like me) who get impatient with people presenting stuff slowly.

The vlogs below run present the same slides in the same order but at a pace that allows more explanation, caveat and commentary. Hopefully you can find bits that particularly interest you if you are left with questions having viewed the summary blog above.

This first vlog looks at relative per capita expenditure levels between Scotland and rUK, explains why we can trust GERS data, shows that there is a £9bn onshore deficit gap between Scotland and rUK and illustrates how offshore (oil & gas) revenues sometimes close that gap.

This second vlog looks at the oil & gas forecasts that were used in the Scottish Government White Paper and demonstrates why even at the time they were clearly misleadingly optimistic. It also looks at data on the North Sea's declining tax yield to explain why an oil price recovery alone is unlikely to be enough to see a return to historical offshore revenue levels

This third vlog looks at the absolute levels of revenue generated and money spent in Scotland over the last 15 years to allow us to put the £8bn defcit gap in context and asks what we'd need to believe to expect tax increases, spending reductions or superior growth to close that gap

Finally this fourth vlog puts the UK and Scottish deficit figures in the context of other EU countries' deficit levels and asks whether Scotland would be able to sustain the deficit level we'd start with if we were to be an independent country

None of these videos suggest that Scotland couldn't be fiscally autonomous or even independent - they simply show the scale of the challenge we'd face, they explain where we'd start from.


Anonymous said...

You should call it Chokkavlog.

Keith Howell said...

Thanks for these brilliantly clear videos Kevin - I really enjoyed viewing them - not often said when economic material is being dealt with. These are topics that are usually tough to get to grips with - well done for delivering with such clarity and effectiveness! Much appreciated. - Keith Howell

Dave B said...

Very good videos, sharing where I can.

One of the things to consider when you refer about Norway, is that they have and produce twice as much oil as us. Twice as much oil revenue to put int an oil fund, twice as much to tax revenue to subsidise the economy etc. This is always something the nationalists conveniently forget to mention. Their model is currently unsustainable, if you google high wages and Norway. Worth some research.

You can get a lot of useful stats from the highly reputable BP energy stats book http://www.bp.com/content/dam/bp/pdf/Energy-economics/energy-outlook-2015/Energy_Outlook_2035_booklet.pdf

Anonymous said...

Yesterday's OBR forecasts for oil revenues were lower than the March figures see page 93 onwards. The outturn for 2014/15 was £0.5bn lower than in the March forecast used in the blog.


Anonymous said...


We will never have the 'right' figures to go for FFA or independence in your eyes. The economy is poor so we want to change the way we do things but we are not in a fit state to do that supposedly. So do we wait? Until a set of figures come along that show our economy is doing well? Ah, but then you answer that is only because we are subsidized and Westminster is what has made things better...

I have been in oil exploration for 27 years, there are massive easily accessible oil reserves in the Atlantic. They are only a secret to those who want them to be. There is no incentive to start drilling just now so like many of my colleagues I moved overseas. The North sea is still viable. It is hilarious to hear people like you who know nothing of the industry trying to tell us otherwise. The amount of disinformation put out by the UK government and perpetuated by you is incredible.

Kevin Hague said...

"Anonymous" (always "anonymous")

Not at all. I simply think those making the case for separation should offer a credible case that explains what we would do differently and how that would translate into economic outcomes. It doesn't need to be compelling, it doesn't need to be convincing - but it surely has to be at least credible?

I'm merely observing the scale of the challenge (as it's simplest - "find £8bn") and asking how it will be met.

I am quite willing to accept that the majority may be willing to vote for independence one day even if it makes us considerably poorer for several decades - but in that case front up and say it instead of hiding behind "oil is just a bonus" or similar nonsense.

I don't claim to have any insight into North Sea reserves and prospects - I just read what's out there and *observe* what's happening.

I'm not sure if your argument is "if we were independent these reserves would become viable" or "they're viable now but the idiots in charge don't want to have that revenue because they'd rather impose austerity" - if it's either of those you fail the *credibility* test.

If your argument is "in the long run oil might come to the rescue" then of course that's possible - but in which case be honest that it *is* all about the oil, oil is not a bonus and a vote for separation is a massive punt on future oil revenues. Oh, and explain how we'd fund the excessive deficit in the meantime ...

I absolutely believe that Scotland could be independent - the tax rises or cost cuts required are well within the bounds of what other EU countries do - but people like you do not help your cause if you argue against the economic reality that is staring us all in the face.

Ron Sturrock said...

God, another "I have been in oil exploration for x years"
I know all about the secret fields.
Could be a camp boss (catering) for all we know.

Anonymous said...

Anonymous/Hilarious, so gross profit (the taxable bit) per barrel on NS oil is plummeting, yet "easily accessible" oil reserves exist in the Atlantic seas (presumably off Scotland) but haven't been worth drilling for even when the price of crude was at its highest? Oh yes. And they're "a secret" that only a few people like yourself know? Of course. And Salmond didn't mention them at all during the referendum because.... erm, what exactly? He wants to keep them as a great big party-bag surprise? He thought it would be unfair to the No voters to reveal this additional oil wealth? You're not saying he wasn't told the secret either, are you??? And GERS didn't mention them because what, it's best that these Scottish Government economic forecasters are kept in the dark about a game-changing taxable resource like that?

Too little time in the decompression chamber for you, old son, because all that's just bubbles.

Anonymous said...

Kevin, great work as always. My bet is that we will see another referendum on independence within a decade, and the same baseless lies and wild economic fabrications will still be being trotted out to explain why Scotland will be so much better off out from under the jackboot that is rUK. When that happens, a handy pocket-size booklet (not mentioning any examples) which set out the real data would greatly help those battling a tide of ill-informed wishful thinking and well-stoked resentment masquerading as argument. I may be back to ask if I can borrow some of your charts...
Latest Anonymous

Anonymous said...

Great vlog. Loved it. If Darling had just made everyone watch that before indyref, wouldnt have been half as close as it was.

And youve moved the debate on from is scotlands economy in good shape (it isnt) to *why* in the name of God is a country like ours, with nothing particularly disadvantageous compared to our peers in Europe in terms of basic resources and infrastructure, running such a massive deficit? It just doesnt make any sense. Can you unpick that? The knee jerk Nat response would be simply poor management from Westminster (arguably true) or an artefact of the way the UK/Scot gov numbers are split. But at face value it certainly looks questionable.

Indeed it could quite validly be argued that our deficit is so high *because* weve been in the union. An earlier split would have seen a much smaller national debt as it would have been offset by oil. Advocating staying in the union because the defecit is so large could be compared to saying you need to stay in hospital because the medicine is making you worse. So some kind of quantitative counter to those theories would be interesting. If indeed they exist.

Anonymous said...

Amazing how many posters can say they think Independence is a good idea because they know of "secret" Oilfields that no-one else knows about. This is absolute rubbish, all exploration is widely communicated by companies doing the exploration because they need to keep investors informed and to encourage further funding for the companies involved. We live on an ever decreasing small plant where secret Oilfields already discovered but unannounced simply do not exist. (undiscovered ones may though nut are becoming less and less in the North Sea) Oilfields in the Altlantic are well known but its the technology has been the issue up till recent years to both drill and recover the Oil, no other reason foe them not being developed than that.