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Time to tap in to the idea of an oil fund

THE history of North Sea oil is a restless one; it has a habit of haunting the present.

This weekend, two pieces of that history have returned to the fore of the referendum debate.

When he gave evidence to Holyrood's Finance Committee last week, the former government economist Professor Gavin McCrone remarked he once wrote a paper on a Scottish oil fund.

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Given he also authored one of the most famous reports on North Sea oil, the Sunday Herald and Scottish Government sat up and took notice.

In 1974, McCrone predicted that burgeoning oil revenues could make an independent Scotland "as rich as Switzerland".

The country would "tend to be in chronic surplus to a quite embarrassing degree and its currency would become the hardest in Europe, with the exception perhaps of the Norwegian kroner".

Successive governments kept the explosive "McCrone report" a secret for 35 years and, for many, it now symbolises Westminster duplicity.

McCrone's 1976 oil fund report, now unearthed by this paper, is equally striking.

The proposal had a clear dual purpose: to invest in areas of the UK worst affected by economic problems, such as west central Scotland and Merseyside, but also to dampen "separatist" grievances that could end in a "constitutional crisis" and Scotland leaving the UK and taking most of the oil revenue with it.

A year later, as the government discovered in its archives, McCrone also produced a draft green paper on the benefits of North Sea oil.

Written with an eye on possible publication, it lacked the sharp political language of the original but contained the most memorable line.

"If we allow this precious asset to be used without leaving something in its place for the future we shall rightly be condemned in the eyes of succeeding generations," it predicted.

Even a generation later, such prophetic words can provoke anger and regret; the sad, sinking feeling of a great opportunity missed.

No fund was created, and instead the UK spent every penny of its oil taxes, while Norway saved and invested and now holds £500 billion.

The past also has lessons for the present.

Alex Salmond says independence would allow Scotland to create its own oil fund. No-one is under any illusion that this would be easy amid rolling austerity.

All governments, of all complexions, face unpalatable choices over competing priorities.

A Scottish oil fund would require years of patience from voters, and a determined and cross-party effort by our politicians.

But it is surely an effort worth making.

We should look to the future, not the past.

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