The monthly ICM poll for the Guardian came out today, with topline figures of CON 28%(-3), LAB 33%(+1), LDEM 14%(+3), UKIP 14%(nc), GRN 5%(-1). Tabs are here. There’s a movement from Con to Lab since ICM’s previous poll, but nothing that couldn’t be normal margin of error – the broader picture still suggests a very small Labour lead, with no strong trend (in November the average Labour lead was 1.6%, so far this month it’s 1.3%).

This is the first time since September that any poll hasn’t shown UKIP ahead of the Liberal Democrats. The previous one was also ICM, and apart from one unusual Populus poll in July you have to go right back to March to find polls from other company doing the same. ICM consistently show the highest level of support for the Liberal Democrats for methodological reasons. This is largely because of how they handle don’t knows – when people say they don’t know how they’d vote, ICM look at how they voted at the previous election and assume that 50% of them will end up voting the same way. This is based on recontact surveys of don’t knows after previous elections and has made polls more accurate in the past… but of course, we can’t know until May whether that will still hold true under the sort of political realignment we seem to be seeing this Parliament. Without the reallocation ICM’s figures today would have been LDEM 11%, UKIP 15% – so it would have been quite a high Lib Dem figure anyway even without the adjustment.

Ipsos MORI’s month political monitor is also due. Today’s Evening Standard reported some figures, but I assume they are saving up the voting intention figures for tomorrow. The data so far is here, and shows people’s optimism about the economy in general (as opposed to their personal finances) dropping to its lowest since last year. I wrote about similar findings from YouGov at the start of the month, so this does appear to be more than a single poll; people’s confidence in the economic recovery does seem to be faltering a bit.


149 Responses to “ICM/Guardian – CON 28, LAB 33, LDEM 14, UKIP 14, GRN 5”

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  1. First! I think.

  2. I didn’t know the ICM Party were polling as high as 11%, Anthony.

  3. …….Is this 5 point lead all about The Autumn statement giving Labour something tangible to raise on the economy i.e for the first it appears many voters are realising osborne has not cleared a mess up at all……and also Miliband appearing to weather the extreme storm of November….

  4. MrNameless – Ta. TIme for my Christmas holidays I think.

    TomChadwick – the curse of looking at polls is the error of trying to read narratives into changes that are probably just normal random sample variation. Most changes require no explanation beyond that.

  5. “Without the reallocation ICM’s figures today would have been LDEM 11%, UKIP 15%”

    Without the reallocation then what would be the % for the other parties?

  6. @Anthony

    Looks like a very strange break of 2010 Lib Dems, plus a huge upweighting required… I’m wondering if polling over possibly the busiest shopping weekend of the year was such a good idea…

  7. Regarding the adjustments ICM make – they are probably correct. Because this is Britain where people are shy about admitting who they vote for. I expect people are shy about admitting to voting for the LibDems and UKIP, and in Scotland, shy to admit Lab or Tory.

    The only party being understated is probably UKIP simply because their 2010 vote was so small there is very little to reallocate, so ICM hasn’t got a ready-made mechanism to correct for the embarrassment factor there.

    O/T – Obama has normalised relations with Cuba. Looks like he’s going to spend his final year really going for it on the foreign policy front. And if his “Banks not Tanks” sanctions on Russia succeed in toppling Putin he’ll retire happy that he has both Bin Laden and Putin as notches on his belt.

    I think there’s a very good chance that Putin will fall. According to Credit Suisse, 38% of Russian wealth is in the hands of just 110 people (you read that correctly) and those 110 are the ones being squeezed by the banking sanctions. How soon before they act to remove the Dear Leader?

  8. The reallocation principle is sound. It has been reasonably accurate in the past. The one problem this time around is the Ukip are polling much higher than in 2010 and the LDs much lower.

    The Con share looks rogue to me. Given they polled 37% in 2010, polling 28% after reallocation suggests that there were either very few Tory DKs, or that the Tories were even lower than 28% before reallocation. Seems highly unlikely.

  9. @CANDY
    Putin is just too liberal, hasn’t Josef Vissarionovich got any great grandsons knocking around?

  10. Roland
    Yes he has. One of his grandsons attempted to stand for president when Yeltsin first got elected. As you might have expected it was a maximalist programme focusing on discipline by immediate execution. For example to enforce the traditional voluntary payment of bus fares the first three people on each bus without a ticket were to be shot. The exception was he was asked about Gorbachev. Would he be shot? No said Mr Djugashvilli. Thats too good for him I will kill him myself with an axe. In contravention to any equality laws the parliament ruled he was not Russian and could not stand. Stalin does not seem to have shown much concern for his children. One son was captured in ww2 and killed himself by running at the electric fence, one was an alcoholic denigrated by his father and his

  11. daughter was spoiled but bullied and defected.

  12. barney

    In which way was she defected and was it as a result of being spoilt?

  13. Amazing spending figures for the EU election.

    Labour were best value per vote with the Lib Dems single MUP costing over 1 and a 1/2 million pounds.

    [Not personally of course.]

  14. [email protected]

    Just saw the stats. Ukip spent just below the Tories.

    Even the LD’s spent more than Labour.

  15. R and D
    As soon as I posted…
    The pressures are hinted at in a novelisation of a true story of the children of the party elite by Simon Sebag Montefiore.

  16. On the question of whether Jim Murphy will revitalise the Labour in Scotland vote my personal stance has been agnostic – I believe he is the most effective politician of the 3 contenders but I’m not sure he’s the right man politically to win over 2010 Labour voters who went Yes in the referendum.

    Anyway in recent days I bumped into an acquaintance who is a very senior Scottish Labour figure who I knew had backed one of the other contenders. After polite commiserations I made small talk to the effect of “It will be interesting to see what effect Jim has on winning back voters”

    The response was firmly of the “Murphy will be disastrously unable to win back Yes voters on the left of the party, we’ve got no chance.”

    I also asked about turnout numbers (as we’ve only had percentages published) and heard that the figures were depressingly low.

  17. @ RAF,

    The Con share looks rogue to me. Given they polled 37% in 2010, polling 28% after reallocation suggests that there were either very few Tory DKs, or that the Tories were even lower than 28% before reallocation. Seems highly unlikely.

    16% DKs, which I think is pretty standard for a phone poll? It’s identical to the Labour DK figure anyway. Conservative retention is 71%, which would be a bad but not atypical poll for them with YouGov. From what I can tell, the Tories’ own numbers are fine.

    The Lib Dems are what’s screwing everything up. Their sample is both internally bizarre and massively upweighed, and while we all know about the importance of the LD -> Labour flux the Lib Dems also contribute about 3% to topline Tory VI in a typical YouGov poll.

    In this ICM they’re only contributing about 1%. That’s bound to make a difference.

    (Although the Blue Team shouldn’t take too much comfort, because the Lib Dem -> Lab flux in this poll is also very low. So the Lib Dems are, in the immortal words of Chris Lane, too high, but the Lab/Tory lead is probably about right.)

  18. Er, the lead is right for this poll, that is. It’s one poll with a sample size of 1000; I wouldn’t read too much into it.

  19. A bit worrying for the Tories to be so low in a poll from what is normally their “best performing” pollster.

  20. Northumbrian Scot

    The surprise to me was how low the reported turnout was in the Union part of the electoral college. Some say it was just 10%. Findlay must have been very dissapointed.

    Time will tell if Murphy can make a difference.

  21. @Spearmint

    So what was the Tory VI before reallocation?

  22. Well as much as I am tempted to say ‘rogue poll’ and I personally can’t see what has happened to move the LD figures, we have had 3 recent polls showing a mini Lib Dem surge.

    They were 10 with Populus on Monday, they were last 10 with them in mid Oct.
    They were 12 with Comres this week, a new record this year, I didn’t look further back as Comres have changed their methodology recently.
    And the 14 with ICM was last there in January.

    You can dismiss one poll, but 3 different polls in the same week from 3 different companies?

    Maybe it is some quiet constituency work happening behind the scenes. Good for them if that is the case, an MP who takes local concerns seriously is one to be valued.

    But we will have to wait a bit to make sure it is not just MOE.

  23. YouGov/Sun poll tonight: Labour and Tories level pegging again, Libs back up to 4th. CON 33%, LAB 33%, UKIP 14%, LDEM 8%, GRN 7%.

  24. NorthumbrianScot – ” I believe he is the most effective politician of the 3 contenders but I’m not sure he’s the right man politically to win over 2010 Labour voters who went Yes in the referendum.”

    He’ll be targeting No voters who are willing to vote tactically against the SNP. I don’t think he’s going after the Yes voters for the simple reason they are unreachable at this moment.

    There was a thread on the UK subreddit which essentially asked, “Scottish yes voters, does the oil price change your mind”.

    The responses were an incredible insight into the Yes voters’ minds.

    Some of them asserted that the “oil would just remain in the ground” and the No Scots tried in vain to explain loss of tax revenue and loss of jobs, to the bewilderment of the Yes Scots. But why would there be job losses, the oil would remain in the ground, they kept saying, oblivious to the idea of wells being decommissioned, and revenue having to exceed costs to make a well viable.

    And one Yes voter declared that it didn’t matter because “there was talk of Norway allowing us to join their oil fund”, which would apparently allow Scots to dip into it to finance a deficiency in revenue and create their socialist utopia! This is the Norway that refused to join the EU because they didn’t want to share. But apparently, the English were evil because they dissed the Scots by rolling their eyes every time they sent subsidies north, whereas the Norse who have never helped anyone in their history (but plundered lots) were going to be the substitutes and share their oil fund with the Scots.

    There’s no reasoning with such people. Judging by Quebec, they are lost for a decade, at which point they’ll finesse their change of heart by pretending they voted No in the Great Referendum all along.

    So Jim Murphy has to concentrate on No voters who may vote tactically for him, and Ed Miliband has to focus on England if he wants to be PM.

  25. @ Neil A,

    ICM’s not a phenomenally good pollster for the Tories- they had a 7 point Labour lead back in August.

    @ RAF,

    28%, according to them. (??? But that’s what the table says.)

  26. @RAF

    Your thoughts tally exactly with my acquantaince’s.

    The potential future worry is more Unions withdrawing financial support from Scottish Labour due to members being more attuned to the SNP.

  27. Candy
    I think that what you saying is for the most part true though J Murphy may not agree. From the second televised debate when the focus of yes moved to totally emotional grounds yes voters have been hard to communicate with. Very few ever wanted to speak about the realities of oil and none about the realities of the business rather than the tax take. I see that P Krugman notes in passing the Scottish separation issue as one of three that rate higher in risks to the world economy than a far left takeover of Greece. However Labour must keep explaining the realities patiently and consistently.

  28. @Candy – we had a less intense version of the oil debate here on UKPR, but the overall message was essentially the same – a fundamental disbelief within the Yes supporters camp that the slump made any difference to the promises made.

    Your characterization of some of the Yes voters is correct, I feel, but personally I think that winning them back hasn’t been helped by the fact that some of the No messaging was equally myopic and simplistic. BT and the pro union media outlets really missed the point of the debate, and tended to churn out equally intellectually vapid nonsense much of the time, and having done this, it is much harder to capitalise on fortuitous events if you’ve already been cast into the numptie basket by your opponents.

    A bit of quiet credibility on both sides wouldn’t have gone amiss, in my view.

  29. A bit of perspective on consumer confidence comes from the latest Markit Household Finance Index. It looks better (less bad) than ever.

    The headline score of current finances is very marginally down to 42.7, which still suggests people are getting worse off. However, the workplace activity index, while down slightly, remains well over 50, and the future finance in the next year measure is up to 51.6, a record (although to be fair, this series only goes back to early 2009, so it’s a low bar).

    This is quite interesting, in that it contrasts with AW’s observation of people’s views of the economy as a whole. People are thinking they personally will be better off, yet believe the economy if getting worse. Will be interesting to see which one has greater salience in terms of VI.

  30. @Alec / Barney / Candy

    You won. Get over it. :))

  31. @Candy

    The problem is (according to the latest Yougov) Labour already have the support of 49% of the No voters. The Lib Dems have no one else left to lose (3%!!!) and the Conservative core vote of 15% or so (32% of No voters) are just not big tactical voters and aren’t really present in key Central belt SNP vs Lab seats anyway.

    There’s a few No voting Don’t Knows (8%) and he might shave 2-3% of the Conservatives but that would still leave Labour 10% behind the SNP who have support from a staggering 86% of Yes voters.

    Labour can only win in Scotland by appealing to Labour and Lib Dem voters from 2010 who voted Yes in 2014. YouGov show that 42% of 2010 Labour voters support independence and 37% of 2010 Labour voters plan to vote SNP.

    2010 Lab and Lib Dem Yes voters make up around 28% of the electorate. If Jim Murphy can’t attract any of these voters back to Labour then they’ll be lucky to get 20 seats in Scotland.

  32. Statgeek

    It will be interesting to see whether all/any of the Unionist parties decide to fight the May 2015 election in Scotland on aspects of Scotland’s place in the UK Union, and if so – which aspects.

    For all the parties, the decisions on the best strategies to adopt are likely to be rather more critical than usual. I suspect that those misinterpreting voter mood may get punished severely.

  33. @Statgeek – as my old rugby teacher used to tell us, ‘it’s not the winning that counts – it’s the grinding your opponents faces into the dirt’.

    More seriously however, I do think there is a problem. In my view, as a Scot, there are too many of my fellow Scots who have been fooled into the simplistic idea that Scotland’s problems all stem from Westminster.

    The narrative around this is sometimes painful, as evinced by the denial around the oil crash. To my mind, there was a significant level of never never land in much of the independence campaign, and the lack of realism really does make it hard to engage with those people on any meaningful level.

    For me, that’s a worry.

  34. @Oldnat – good to see you back.

    I’m rather hoping the debate in 2015 is about what the parties want to do for Scotland. My original premise when I raised the oil price issue a thread or two back was to ask whether it was in Labour’s interest to point out how awry Salmond’s projections had gone.

    I answered my own rhetorical question by suggesting it wouldn’t help Labour. Too many ears and eyes are closed to reason, and moving the debate on to what can be done now seems more appropriate

  35. @Barney

    As I remember it, according to Sebag Montefiori’s “Young Stalin” (a great read I say) Stalin did have one illegitimate son who ended up a French Jazz musician. Sounds like the sort of person who would make an excellent president of Russia to me!

  36. @Barney @Alec

    I think that the problem is that if you are emotionally invested in something it is very very difficult to accept you may be wrong.

    In many ways the Scottish subreddit is similar to the Russian subreddit, which I’ve also been reading for a few months out of curiosity over how they think.

    For ages you got uber Russians insisting that Russia could beat sanctions, no Russians ever set foot in Ukraine, they didn’t shoot down that MH plane and America was the great Satan.

    They used to post pictures of Putin riding shirtless on a Harley next to Obama on a bicycle as “proof” that Putin was stronger than Obama. Or Putin petting lions juxtaposed against Obama petting the White House kitten.

    It’s very hard to understand the mindset. You can understand people in the 1920’s misunderstanding the messages from images because movies and photography were in their infancy. But it’s 2014 with everyone having access to webcams, selfies and photoshop – surely everyone knows that appearance is not the same as substance? And that posing Brokeback Mountain style does not make you a “strong” leader.

    Underlying it is a desperation to believe that what they were seeing was real. Allied with the belief that while white American presidents took down the Soviet Union a black American president couldn’t take down Russia.

    They’re learning the hard way that the words black and white are unimportant, the significant words are “American President”.

    Yesterday was the first day it dawned on them that they’re in trouble.

    Half of me felt sorry for them because they’re queuing up late into the night spending their savings buying Ikea furniture in the belief that it might hold it’s value (Ikea rubbish!) and they can swap it later for food as inflation climbs (as the ruble falls). Part of me was thinking, you enabled this to happen by supporting that idiot Putin.

    But I guess people have to learn for themselves, they won’t be told. In Scotland as well as Russia.

  37. Alec

    Surely the Unionist parties should be concentrating on how they can change the UK to become a more successful [1]country in which to live?

    Meanwhile, while not abandoning longer term aims, those parties who see benefits to everyone from reversing centralisation of power, should be articulating that vision.

    Hopefully, those in some regions of England will move on from “the simplistic idea that [their] problems all stem from Westminster”, but that they can do nothing about it.

    Believing that you can change your own destiny is a complex, powerful and stimulating idea.

    [1] Once upon a time, the 3 main Westminster parties would have had different concepts of what “successful” might mean

  38. @Alec

    It’s not really surprising that the public’s expectations for the economy have dipped, given that Cameron and Osborne very deliberately and consciously went out there to plant that idea in their heads.

    I am not sure whether this was political posturing (to feed the “we’ve almost fixed it but there’s still trouble ahead and you need to stick with us to get the job done” narrative) or preparing the ground for a difficult second term (ie knowing that there is likely to be another crisis and trying to avoid, in the event that they’re re-elected in 2015, getting all the blame for it). Maybe it’s a bit of both.

    But I wouldn’t expect people to ignore doom-mongering from the Tories.

  39. @Alec

    You miss the point. When the ‘yes’ inclined complain, they are told to ‘get over it’ (the indyref result).

    So those inclined towards ‘no’ have won, and will reap what they sowed, and will have to equally ‘get over it’.

    When you realise that people with no money don’t give a toss about the financial implications of their vote (little to lose), then you’ll be halfway to understanding some of the Yes voters.

    They are sick of the plastic, media-trained, Oxbridge types, and the plastic, nodding donkey, party faithful. The mortgage flippers and the expense leeches. The ones that crowd out the Commons for pre-holiday breaks, but don’t bother to show to debate things that are important to the people of the nation.

    I think I’m done. You try to take the oil price change as some logical reason for Scotland being unable to exist without rUK. Look ahead to when oil runs out. If Scotland is that unprofitable, it will be dumped like a stone. The truth is that Scotland can exist fine without the oil profits.

    Most of it has done so for 40 odd years now.

  40. @Candy

    It’s not so much the Americans destroying Putin as the Saudis punishing Putin for supporting their enemies in the region – Syria and Iran – and undermining the occasional cartel that is OPEC.

    Most ME members of Opec have no problem with oil falling to $45-50 a barrel. Russia does have a huge problem with this.

    If by allowing the price of crude to fall, the nascent US fracking market is also undercut and undermined, the Saudis will consider that a job well done.

  41. “38% of Russian wealth is in the hands of just 110 people (you read that correctly)”

    After the fall of the soviet union local oligarchs and western banks colluded in the looting of Russia. I wonder how many people the dramatic drop in Russian life expectancy during the period of full-on looting represent?

    Putin (slightly) reduced the looting hence why he has such a high level of public support and why the banks and oligarchs are trying to bring him down.

  42. @RAF – the current Russian crisis is over access to dollar loans which become due on 23 December – i.e. they are a consequence of the Obama Banking sanctions rather than oil. If it was oil the Venezuelans would be in trouble too, but while they are hurting they are not in meltdown.

    @Mr Jones

    Putin has raided the Russian coffers just as much – he’s reputed to be worth the same as Bill Gates without having run any business… Don’t be fooled that the kleptocracy has gone away, the beneficiaries are just different from Yeltsin’s era, thats all.

    And Putin also colluded in shooting down a plane with 268 passengers including 8 Britons.

    If an Islamist had brought down the plane there would be outrage from the Kippers. But because it’s Putin who has done it, the reaction is, Oh Mr Putin, you look so gorgeous in your shirtless poses, you can kill as many Brits as you like. Which is pathetic really.

    As soon as that plane got shot down he and all the Russians should have known that punishment was coming their way. It was delusional for them to think they could get away with it – like the world is going to accept that anyone can shoot down planes whenever it amuses them.

  43. @Statgeek

    I too am fed up with the patronising sneering attitude of the No camp. So Yes voters are misguided fools? Yes, I am idealistic that is why I used to vote Labour. Labour’s theme song in ’97 was ‘Things can only get better’ but somehow a Yes voter that believes Scotland would be better off managing its own resources and making its own decisions is ‘blind to reason’.

  44. “Don’t be fooled that the kleptocracy has gone away, the beneficiaries are just different from Yeltsin’s era, thats all.”

    I know the kleptocracy put in place by western banks after the fall of the soviet union hasn’t gone away – as your original post illustrated. My point was even the slight reduction in looting since Putin is too much for the bad guys to accept and so they’re risking WWIII to get rid of him.

    “And Putin also colluded in shooting down a plane with 268 passengers including 8 Britons.”

    Yeah, right. The most he did was supply some SAMs so the Donbass rebels had some AA and somebody on the ground thought the airliner was a military plane.

    Cui bono.

  45. @Mr Jones

    Putin is part of the kleptocracy – that’s what triggered the current crisis.

    At the start of December the Russian central bank had $410bn in reserves, having already spent $80 defending the rouble. That is more than enough to defend the currency.

    The trouble began when rumours started to circulate about an opaque deal between the central bank and Rosneft and other companies owned by oligarchs. The market suspicion was that Putin had ordered the central bank to hand over the reserve to the oligarchs to pay their dollar loans, leaving it with nothing to defend the ruble. The market tested this belief by selling the ruble – and it fell like a stone despite the Russian central bank raising interest rates from 10% to 17%.

    Still believe Putin is not part of the kleptocracy?

  46. Been out of the loop for a few days, and without wishing to get into a debate about religion or politics I’m on the one hand disappointed about the whole The Interview situation (since when were New Yorkers willing to change their habits out of fear?), and on the other wonder whether the reaction would be any different were it to relate to a more democratic part of the world. Can you imagine if a film like that were released in relation to various parts of these lands at various points in the age of film?

    @ Neil A,

    ICM’s not a phenomenally good pollster for the Tories- they had a 7 point Labour lead back in August.

    That’s a relatively recent phenomenum: the Tories have long regarded ICM as a gold standard, given that they have proven themselves better than anyone else at mapping the shy voter factor. While no-one worth their salt would worry too much about any one poll, in relative terms this would concern them far more than an identical YouGov poll.

    One question I’d like to float is, treating the two blocs as equally sized because I’m asking this question in percentage terms, which group of voters will turn out in higher proportions in 2015: 2010 Conservative or 2010 Labour?

    Note that I’m not asking which set of voters will be the most loyal (I assume that will be Labour, notwithstanding that even if Scottish polling turns out to be wildly generous to the SNP, they are undoubtedly on course to lose a six-figure number of voters in Scotland), simply which one will turn out and vote for somebody in the highest proportions.

    I didn’t know the ICM Party were polling as high as 11%, Anthony.

    Good spot. Though I wonder whether anyone would have picked up on him making the reciprocal mistake in calling it the Lib Dem poll?

    [Not personally of course.]

    I’m sure UKIP could come up with an argument that she does. Just as an aside, while reconfirming that their MEP is indeed female, I did a search on a very well known search engine for “Lib Dem MEP 2014”. The first result (the Lib Dem official page for MEPs) described itself as “Complete list of the Liberal Democrat MEPs, with links to their homepages”.

    Anyway, on the topline Lib Dem figure, until pretty recently* I’d long felt that ICM were ultimately closer to Lib Dem VI at the time than anyone else, because in about 10% of constituencies the Lib Dems will retain huge proportions of votes that they wouldn’t have a cat in hell’s chance of getting from the same voters under any system other than FPTP. On top of that there is a considerable embarrassment factor about coming out as a Lib Dem at this point in time (2015’s equivalent to the shy Tory factor), so the chances of a tactical admitting to it this far out from polling day are quite low.

    What makes this poll an outlier is that without ICM’s uniquely aggressive reallocation the Lib Dems would already be on an abnormally high 11%. For context, here is a list of the last time other pollsters had the Lib Dems at 11% or higher, taken from the UKPR list:

    Comres: 12% on 14th December
    Ashcroft: 11% on 6th July
    Yougov: 11% 20th May
    Populous: 11% on 13th April
    Ipsos-Mori: 13% on 12th March
    Survation: 12% on 15th January
    TNS: sometime in 2013 (they don’t poll often, and frankly once I got that far back I was only looking out for Opinium).
    Opinium: Unless my eyes deceive me they last had the Lib Dems on 11% on 23rd April 2012.

    * what changed recently? I think the improved fortunes of the United Kingdom Putin Lovers in England, the National Socialist Worker’s Party in Scotland and to a more modest extent the political wing of Greenpeace all over the island, makes it much harder for the Church of Clegg to make modest recoveries from their low-points in this parliament in seats they were never in contention for. In 2012 or so, it was a reasonable assumption that the Lib Dems would ultimately receive some trickleback from their lowest point of the parliament, from 2010 voters who are not happy with choices the Lib Dems made but felt that on balance they’re a less terrible option going forward than Labour or the Tories. They really cannot afford to put resources into seats where they can’t win and one of those other parties has already stolen a march on them, so it’s almost impossible to see how they now get that trickleback.

  47. I am no expert on oil – or anything. Here is my tuppenceworth, even so.

    It is not just the oil price that affects the decisions of companies about where to drill. It is the tax take by the Treasury. Currently the marginal tax rate on the oil and gas rate is 81% to drop to 80% in January 2015.

    In 2011 the industry was faced with another tax increase. That prompted postponement of a couple of major projects. It also prompted the representative body of the industry, Oil and Gas UK, to ask Price Waterhouse Cooper to calculate the total tax take from the industry by the Treasury excluding the new, increased tax rate.

    PWC calculated that the figure was £30 billion. From memory (I may be wrong) the contribution by the supply side to the industry was not included. £30 billion is a large part of the Scottish budget for that year. It is also around 5% of the total take for the UK Treasury. Oil and gas revenues are important to Scotland and the rest of the UK.

    What the companies want is not what they get. Extracting oil from a field is a long-term process and companies benefit greatly from a fiscal regime that is stable and fairly predictable. It is not just the oil price that affects investment decisions by the oil/gas industry. It is the whole fiscal deal as well.

    The Wood Review tells of the ineptitude of the UK government in the management of the oil and gas industry. The central recommendation (not the one that got the headlines, though) was that management of the industry be removed from the Department of Energy and Climate Change and passed to an independent operator – from the industry. This had the overwhelming support of the industry. It says something when the department that commissioned the report into an industry is told in the report that it is not fit to manage that industry.

    What Wood says is that DECC does not have the resources (numbers and knowledge) to manage a mature field – that is the North Sea. Wood contrasted the resources available to DECC with those available to other North Sea operators, the Netherlands and Norway. Both apply considerably more in the way of resources to the industry.

    Let’s have a look at Statoil, the state oil company of Norway -67% of which is controlled by the state. Thus the state involves itself directly in decisions affecting the industry including where and when to drill. Statoil is one of the richest companies in the world. It explores for oil and gas in over 30 countries and employs thousands of employees. It produces a million barrels of oil daily and in 2013 was the company that found the most barrels of oil.

    Statoil pays close attention to research in the industry. The typical recoverable volumes from a field for the industry is about 35% of oil/gas. Statoil has pushed that to 50%. While Wood was recommending the removal of DECC as industry regulator, Statoil was opening a new research station. It is dedicated to the task of raising recoverabilty to 60%. Statoil also has a large oil fund which is to be used, I think, to pay Norwegian pensions.

    None of this got much attention in the media. The focus was Wood’s comment that, in his view ,the SNP was too optimistic about volumes recoverable from the North Sea. Wood believed that 16 billion barrels was recoverable rather than 24 billions. What he did not say was that repeatedly in his report he states that 24 billion barrels is recoverable from the North Sea.

    That deals with the North Sea. It does not deal with what may be discovered and extracted to the west of Shetland.

    Nor is oil and gas Scotland’s only energy resource. It is estimated that there are 17 billions tons of coal under the Forth which can be extracted by burning the coal in situ. There is also shale. For the moment, I say nothing about wind.

    So how would an independent Scotland manage its energy resources? Would it make the mess of it that DECC has done? Would it emulate the Norwegians?

  48. Anent oil. Is it too difficult to manage the ups and downs of the oil price? A proportion of the yearly sales volume can be hedged. In the good years of oil prices manage sales and volumes held so that you may build up a fund to tide you through the less good times?

    Alec, I thought there was a fairly good basic understanding of the oil/gas industry among many Yes supporters. There was certainly perhaps too much optimism about how easily it might transform the fortunes of an independent Scotland.

    My experience was that there was less understanding among No supporters of the oil/gas industry, particularly Conservative supporters. I recall a conversation I had with a Labour No supporter about the Wood Review and the oil industry. He told me later that I almost persuaded him to change his voting intention. He may have been gently teasing me but at least I think he was recognising that there was some strength in the argument that Scotland has many energy resources.

  49. It never ceases to amaze me how keen political supporters of all parties are to quote organisations that the party would more often than not write off as biased, irrelevant, clueless, wrong and so on. That said, I probably make Sam look like an oil expert by comparison.

    By taxing a finite necessity at an extortionate rate, you are taking in silly money in the short term, and delaying the point at which your supply of that resource will be depleted in the longer term. In that very narrow respect, with emphasis on the phrase “very narrow”, the UK’s most basic fiscal policy towards fossil fuels is not unlike Norway’s at all, though undoubtedly the similarities largely end there.

    As for reserves, there is precisely one appropriate response to the various estimates about remaining barrels: what’s there is there – and a robust policy would plan for a middle-of-the-road estimate but be able to survive a worst-case scenario. I was absolutely dismayed about the quality of debate on this matter during IndyRef, from both sides to be fair.

    My biggest criticism of the nationalists’ approach to the issue is that the perception from many swing voters was that theirs was a fiscal strategy which would be made or broken on the accuracy of long term oil forecasts. Their response went too strongly on trying to argue that the revised forecasts were overly pessimistic, and too little on trying to convince people that their plans were not too dependent on the resource in the first place.

    Certainly the unionists were just as bad though – the nationalists were entirely right to try and debate debate how the money had in the past, should now and would in the future be spent. And regardless of the absolute value of the remaining resources, whether government policy was maximising the value to the country of whatever was left, in the broadest possible sense of the phrase.

  50. Sam,

    It’s very easy, if you don’t make oil taxation a big part of your fiscal policy, and you have your own currency floating free on the exchange markets. So Norway manages, but Russia and Venezuela are up a certain creek without a paddle.

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