THE author of the secret report which outlined how oil could have spectacularly boosted the economy of Scotland has revealed he has begun to change his mind about independence because of Brexit.

Professor Gavin McCrone said he was “frustrated and fed-up with what was happening in London” and believed a Norway-style option might be best for an independent Scotland if the UK leaves the EU.

In a wide-ranging interview with Good Morning Scotland yesterday, the former senior civil servant again denied his explosive report had been deliberately suppressed but expressed his disappointment that an oil fund had not been set up in the 1980s by the Tory Government.

The National last week became the first newspaper to publish the report in full – and our coverage then went viral on social media.

Asked yesterday how he felt about it surfacing, the former senior civil servant and Oxford academic said he found it “quite amusing”.

He said he had forgotten all about it until some of its contents were revealed by The Herald in 2005.

The main reason he wrote the report, he said, was because of his concern that the Tory Government had done nothing to secure the oil revenues.

However he said he was also concerned because the traditional arguments against Scottish independence were completely overturned by the worth of the oil revenues.

At the time, there was a huge surge in support for the SNP in Scotland but McCrone said he could not have predicted that so many SNP MPs would be elected in 1974.

“I did not know what would happen in the election – that was not foreseeable except that one felt that a lot of people in Scotland felt something needed to be done about North Sea oil and it was not being done,” he said.

He had written the report, he said, as background reading for incoming ministers at the time of the 1974 election. “I was concerned at that time that the outgoing Conservative Government had really done nothing to secure the oil revenues for the exchequer,” he said.

“That seemed to be negligent. I said the oil revenues might be as much as £3bn and that seemed to take everybody by surprise.”

McCrone said the Tory Secretary of State for Scotland, Gordon Campbell, “had been told” he could say the revenues from rents and royalties would be £100m a year by 1980. “I predicted they would be between £1500m and £3000m so it was rather different,” he said.

Asked in particular about the part where he wrote that an independent Scotland’s economy would be boosted by an almost “embarrassing” degree by the oil revenues, McCrone said he had written it to “shake people up a bit to get some attention from ministers and others”.

“I think it did,” he said, adding that it had been classed as secret because it was thought to be “sensitive material”.

McCrone said Westminster was initially a “bit baffled” by the upsurge in support for the SNP.

“I think there was a tendency to brush it aside and think it would just go away but clearly it was not going to,” he remembered.

There were two elections in 1974 and in the second the SNP won about 30% of the vote.

“If it had gone up to 35% or 36% it would have been a complete landslide so it was quite a precarious position for the Government,” said McCrone.

The incoming Labour Secretary of State for Scotland, Willie Ross, had not been a supporter of devolution for Scotland but McCrone said he realised the political situation made it “necessary”.

However he said when the Labour Government took over, the country was in an economic “crisis” and was in no position to set up an oil fund.

“The revenues did not become substantial until after the Labour Government,” he said.

ASKED what he would suggest to those still making the case for independence, McCrone said he was still in favour of a fund.

“The oil revenues are much less than they were and of course there is the huge costs in clearing up the oil fields and things like that, but I still think the oil should be treated as something special and if possible put into a fund rather than just used for ordinary public expenditure.

“I think that was the mistake the UK Government eventually made. They did not put it aside at all – they just used it to finance unemployment and other things.”

He added that while he had said in his report that an independent Scotland would have a strong currency because of the oil this could have been a “resource curse”.

“You would have to prevent the exchange rate rising too much,” he said. “If it rises too much then it squeezes out the rest of the economy.”

However, he said the UK exchange rate had been allowed to rise anyway in the early 80s and that, combined with the “tight” monetary policies of the Tory Government, had caused a lot of companies to go bust.

Asked about the Scottish Independence referendum in 2014 he said it was “commendable” that the Scottish Government had produced a White Paper, pointing out that nothing similar had been produced for Brexit.

However, he said he thought some of the difficulties an independent government would face had been “glossed over”.

“The transition would have been painful because we have a budget deficit in Scotland,” he said. “That is not unique as most of the UK has a budget deficit.

“Nevertheless that would have to be dealt with because you can’t go on borrowing forever, and that means either cutting public expenditure or raising taxes. What you really need to do is get the economy growing much faster so you get higher tax revenues. It would all be very tricky and would have to be carefully managed.”

Asked if he knew how that could be achieved, he said he didn’t think anyone did.

He added: “Of course in 2014 the oil revenues were much higher so the budget deficit was much smaller than it would be now.”

He said the currency issue was also “tricky”.

“I think inevitably you have to retain the link with Sterling for a few years because it is too chaotic otherwise, and would be very damaging to the financial sector to be chopping and changing, but in the end an independent country has to have its own currency and it has to find the right value of the currency to ensure there is full employment and balance of payments.”

With regard to how he now feels about Scottish independence, he said his preferred option was for the UK to remain in the EU, with Scotland remaining part of the UK as it was the “simplest solution”.

However he said if Brexit went ahead and that resulted in a vote for Scottish independence then there were a number of choices.

“You could either remain tied to the rest of the UK or you could apply for full membership of the EU which would be a problem and would mean having a border with tariffs and things with England,” he said.

“Or you could do what Norway has done and try and be in the single market, but have your own ability to do trade agreements with other countries, which could actually be the right solution because it could give Scotland many of the advantages of being in the EU but also retain links with the rest of the UK.”

He said that even if Brexit happens he would still have difficulty in deciding to support Scottish independence. “There would be a big upheaval which could be damaging, and you know there would be a problem with the budget and so on, but one does feel pretty frustrated and fed up with what is happening in London and that does change one’s attitude a bit.”

Asked how much it changed his attitude he laughed and said: “I suppose quite a bit.”