davidsberry

An early evening seminar at the Hume Institute led by the Chair of the First Minister’s Council of Economic Advisors is not everyone’s idea of entertainment but Paul Johnson, Director of the Institute of Fiscal Studies made it that for me. Much of his talk and most of the subsequent questions were about the British economy and its performance in relation to the rest of the planet. Given that the IFS out-gloomed the Treasury four years ago when the recession first hit, this was not stuff for the faint-hearted.

But what cheered me were a number of incidental observations. Paul was clear that cutting public spending was counterproductive. But he was also clear that what public spending there was needed to be well directed and that this was almost impossible to co-ordinate at a UK level. This can happen for well intentioned reasons: he cited excessive housing benefit but a paucity of spend on new affordable housing as unbalanced thinking.

Reading between his lines, what was obvious was that, whereas Scotland is forever being lectured on the advantages of being part of the bigger, beefier UK, its smaller scale and self-contained infrastructure make its future a much more manageable problem to solve.

Caught up in this recession, little has been said about how deep Western society was in trouble anyway prior to 2007. We had green targets and made laudable efforts in recycling, etc. But we are kidding ourselves that we were anywhere near a sustainable future and that a return to 2006 would solve everything.

For a start, we build towns and cities based on cars. Car use grows faster than public transport because it’s easier. But with oil back over $100 and petrol at $1.40, just how sustainable is that? The UK government (especially as it’s Tory) is all for development if it could just unleash the cash to do it. The result would be more urban sprawl, such as has covered the green fields of England over the past century. The proportion of spend on any infrastructure will be small and most of that confined to arterial roads.

Already, Scotland has gone down a different path; most of the houses built in the last five years have, thank to Scottish Government incentives, been affordable. These are seldom urban sprawls needing a car to reach but smaller estates near shops or even town centres as Scotland’s stock of brownfield sites is tapped into. Such closer, mixed communities are in themselves more self-sustaining, needing less transport in and out if there are jobs and shopping available within them; they also make less demand on services, whether it be police, health or social work.

Because the major mistake made by the Americans and aped most of all by the English is the omnipotence of the commercial imperative that has resulted in the urban wastelands that are Haarlem, Pittsburgh, South Chicago, Detroit, Watts, etc., etc. We in Britain are not far behind, as evidenced by the detonator of Stoke Newington that ignited a dozen other suburbs and inner cities across England last August. Why didn’t it happen in Glasgow, even though a couple of lads were trying to make it so? Because Scots society, flawed as it is, still has cohesion that has little to do with how much you earn.

So when Cameron announces further measures to curb immigration because 30,000 people were brought into Britain on inter-company transfers when the 20,000 cap on other skilled visas was not even being approached, we have to wonder whose priorities is it that the UK government is following. Scotland’s not full up and has always thrived on those who come here, whether Italians, Poles or English. One thing the Americans DO get right is welcoming those who will work hard, pay lots of taxes and benefit the country. But no-one seems to be asking why locals don’t have the skills these 30,000 people have.

Thankfully, some in Scotland are ‘getting it’. Scottish Power (a.k.a. El Poder Escocece?) is ahead of the game. Chairman Ignacio Galan has announced a £5bn refurbishment of the power grid across southern Scotland, which will required 300 new engineers and technicians. Despite last year’s slump in production in North Sea oil & gas (largely due to new draconian tax regimes from the UK Treasury) this month BP announced a £2bn investment programme mainly to exploit resources in the Celtic Sea west of Shetland.

Not being as sensitive to immigration as our Southern cousins, we Scots will again welcome whoever shows up to fill those jobs—and the pile of others still to be created as the renewables industry keeps growing to provide Scotland with a modern industrial base. And, as a small country, there is a fair chance that our universities will pick up on such potential and steer their courses towards turning out graduates in tune with the demands that will be made on them in the world of work.

Which, in turn, means that fewer of our skilled young people will feel the need to seek a more prosperous future elsewhere and again reinforce the social cohesion that helps and is helped by what is loosely described as ‘Scottish culture’. There are parallels here with Norway and Denmark. Yes, there are economic parallels and the numbers can be used to make all sorts of arguments. But what matters to people is their quality of life, their sense of being at home among friends and family, of belonging.

Small countries seem to be especially good at that, the more so when—like the Canadians with the Americans of the Danes with the Germans—they have some overbearing self-important bigger neighbour to the south of them. Ask a Canadian or a Dane what they think of their southern neighbour and you usually get the kind of answer that a parent gives about their unruly adolescent—wry with humour, obviously affectionate but glad now to be self-aware enough themselves to have found a more mature, civilised and sustainable form of living.

This week’s announcement by Ryanair of cuts at Edinburgh airport has been touted by the airline as a major blow to the growing airport and claims that passenger numbers are likely to decline from the present 1.8m to 1.5m passengers annually (out of a total for the airport of 8.6m in 2010). BAA, which still owns and operates Edinburgh replied that they “don’t know where Ryanair gets their figures from.”

In fact, looking closely, Ryanair’s plans consist of operating six, rather than seven planes from the hub. The net effect would be to end the service to Berlin and cancel plans for flights to Malmo, Murcia and Talinn. Sounds serious, until you realise that they will still fly to 35 destinations from Edinburgh, including four in Germany.

In fact, there are over 130 places you can fly to direct from Edinburgh, from Sumburgh to Newquay in the UK , from Alicante to Zurich or Tampere to Tenerife. While passenger figures for Edinburgh have dropped by around 5% from their 2007 peak of 9m, most of that drop has been in holiday flights to the sun as people have budgeted tighter for their holidays and some have opted for ‘staycations’ that don’t involve flying.

The drop has been steeper in aircraft movements down 15% from its peak (129,000 to 109,000). But this implies more efficient loading of aircraft (= full seats), which is obviously more profitable for airlines.

On the other hand, business traffic has been steady, helped by the constant addition of new destinations. Key among factors in Scotland competing in the world is the ease with which our business can access markets elsewhere and with which foreign business and tourists can access Scotland. Edinburgh has been the premier airport in Scotland when it comes to doing that so the variety of links is crucial. This is highlighted in ranking the passengers heading for various destinations.

Most Popular Destinations from Edinburgh Airport (source: Wikipedia)

Favourite recreation destinations like the classic Dublin stag/hen night trip are down appreciably but business destinations like London City or Newark NJ show growth. As evidenced here, flights outside the UK account for around 45% of all passengers. This means we are well linked to the rest of the world but the massive numbers for Heathrow almost certainly hide significant numbers in transit to elsewhere in the world.

Although BAA announced last October that they intended selling Edinburgh Airport, this was due to the Competition Commission requiring them to divest themselves of either Glasgow or Edinburgh. Projections for traffic are healthy, with an estimated 25m passengers expected to pass through Edinburgh in 2030.

So Ryanair’s outburst of temper and withdrawal of flights appears to be, at best, a ploy in negotiations for gate charges at the airport. At worst, it is another outburst from their colourful Chief Executive, who is always up for a little publicity, Michael O’Leary. Ever since he hit the headlines handling baggage at Dublin in 1995 he is rarely out of the news. I think his Ryanair service direct to Blarney is the one that should be cancelled.

One fact that is almost wholly unappreciated outside of the oil business is the obligingly shallow nature of places like the Gulf of Mexico and the North Sea. To landlubbers, the sea looks pretty much the same anywhere and, since it gets dark and eerie much below 40m depth, what does it matter? In some cases, the shallowness can have useful effects, such as enabling causeways to be built between islands in places like Orkney and Eilean nan Siar, but mostly, it’s just sea, isn’t it?

Students of paleogeography have unearthed (unsead?) some interesting history in that the North Sea was once much smaller and some 10,000 years ago, it was possible to walk from Yorkshire to Jutland, provided you splashed across the combined Humber and Rhine at some point. En route you would have passed a chain of highlands that are now being called the Dogger Hills.

Location of the Dogger Hills

As ice age snows melted, sea levels rose and the lower-lying parts flooded. Evidence that the area was inhabited are dredged up by fishermen on a daily basis. The last to submerge were the high Dogger Hills, which now lie submerged 18m-60m below the surface. The Geology of the Dogger Bank notes “a buried relief at an average level of 3 m below the sea floor was discovered. Most likely this relief represents a former glacial landscape covered with soft sediments.” So a drowned world exists out in the North Sea.

Curious as this is, you may be wondering what all this has to do with the price of cheese. Let’s imagine that the UK Govt felt threatened by Scottish independence. How could they secure a better share of the North Sea oil billions that would otherwise fall to Scotland? Well they already did that once in 2000 when the Blair government shifted the agreed maritime boundary where Scots jurisdiction ran to put 6,000 sq. km into England. If you head due East from the Forth, you actually run into England.

An evil-minded Westminster might consider a little land reclamation. With the sea bed barely a building height below the water, it is not inconceivable that an island of several sq km could be reclaimed by a ring of rock ‘seerapp’ armouring, within which sundry landfill materials could be dumped to create dry land. Its official purpose, being 100 miles closer, would be to provide close support for North Sea installations and act as a base for the many offshore wind farms being contemplated for the area. With supply bases, helicopter and rescue facilities and even a tanker and pipe terminal, it could be a business in itself.

But its covert purpose would be less obvious. At that latitude, it should be under English jurisdiction, which makes it part of England. In turn, that would cause a redrawing of the equidistant boundary that caused so much fuss when first drawn in 1999. Because it would actually steal considerably more North Sea bed than the original grab. In fact, it would place England as the dominant benefactor from North Sea oil and gas, even if Scotland would still dominate the Norwegian and Celtic Sea.

The "Dogger Effect" What if the English Reclaimed Dogger Bank?

If all this sounds implausible, then consider what similar investment has done to turn three rocky islands called Macau into one of the fastest growing (literally) places in the world as it passes 28 sq km in size by filling in large sections of the Pearl River estuary.