North Sea oiliness


(c) BBC


Apologies to regular readers who’ve tuned into this blog recently expecting to find me musing about my usual topics (James Bond, obscure British horror movies, graveyards in Edinburgh) and found me instead ranting and raving about the debate currently going on in Scotland about whether or not the country should vote for independence in the referendum being held this September.  My apologies, but some of the arguments flying around in this debate have been so stupid, and some of the personalities voicing those arguments have been so annoying, that I cannot help but rant, rave, wave my fists in the air and generally do a good impersonation of Rab C. Nesbitt.


Yesterday saw David Cameron gather together the UK cabinet and take them to Aberdeen.  The last time Aberdeen experienced such an event was in 1921, in the days of Lloyd George.  There Cameron insisted that the North Sea oil industry would be in much safer hands if Scotland voted to remain in the United Kingdom.  So let’s get this straight.  A UK Tory prime minister telling the Scots that the North Sea oil industry is best run from London?  That would be laughable if it wasn’t so – as recent history has shown – tragic.


Last month it was announced that a fund set up by the Norwegians at the start of their North Sea oil extraction programme had now become worth the equivalent of 100,000 pounds for every man, woman and child in Norway.  (Two days ago, meanwhile, it was announced in Scotland’s Sunday Herald newspaper that the biggest food bank in Glasgow had run out of food.)


What happened to Britain’s North Sea oil profits under the last Tory regime is a story of criminal waste, on an epic scale.  Whether you look at it from a Scottish or from a British point of view, the Tories squandered it during the 1980s and 1990s.  They used the money to fund their reshaping of the UK economy – the dismantling of traditional industries in the country’s hinterlands and the shifting of hundreds of thousands of former workers onto benefits.  It also went towards the creation of a brave new world of banking and financial services centred on the City of London, many of whose main players would wreck the British economy in 2008 through their corruption, greed and stupidity.  (Of course, as the bill for what happened in 2008 is being paid for, it’s the people stuck in that benefits culture that the Tories propagated a generation or two ago who are suffering under austerity measures.  When did a dodgy banker last lose all his income and have to depend on a food bank?)


In the early 1980s, I remember the Scottish Nationalists launching a poster campaign depicting Margaret Thatcher as a vampire but with oil, not blood, trickling down her chin and sporting the slogan, ‘No wonder she’s laughing, she’s got Scotland’s oil’.  The campaign was much criticised for being crude and nasty (which it was, to vampires at least), but it was, essentially, true.




Not that the Labour party has been much better.  During the days of Jim Callaghan’s Labour government in the late 1970s, a senior cabinet minister proposed the setting up of an oil fund along the lines of what the Norwegians were doing.  But the proposal was rejected.  As the journalist Andy Beckett noted in his book When the Lights Went Out – What Really Happened to Britain in the Seventies, “(i)nstead, the great North Sea windfall would continue to be treated as an ordinary source of Whitehall revenue and swallowed up by the day-to-day needs of hungry governments.  Not for quite a time… would it be obvious that this had not been a wise strategy.  In 2008, the economist John Hawksworth of the accountants PriceWaterhouseCoopers calculated that, had Britain’s tax revenues from North Sea gas and oil been invested rather than spent, they would now be worth £450 billion, and would give the British government control of one of the world’s largest sovereign wealth funds.”  The minister who pitched this idea for a British oil fund was the Secretary of State for Energy, Tony Benn – a man now synonymous in the London political and media establishments with the ‘loony’ left.


But to return to my original point – having a British Tory prime minister lecture the Scots about how to run the North Sea oil industry is like having Hannibal Lecter give a talk to the National Union of Census Takers about how to cook liver.


(c) Huffington Post



Yesterday, I posted comments similar to what I’ve written above on an online newspaper thread and got several angry responses.  One line of response was that the Scots could hardly belly-ache about what’d happened to North Sea oil revenues when two of their biggest banks, Halifax Bank of Scotland and the Royal Bank of Scotland, had been instrumental through their mismanagement in necessitating the great banking bail-out of 2008.  To that I can only say that both had been tainted by the deregulated insanity that the Tories let loose in the City of London in the 1980s and 1990s.  As a long-term customer of the Bank of Scotland, I know that when it merged with England’s Halifax Building Society and became HBOS it seemed to transform overnight from being a rather stolid outfit to being a recklessly corporate one. 


And if the Scottish banks were responsible for a lot of the damage in 2008, I think this reflects the fact that Scottish banks have traditionally been a large part of the British banking sector – banking being a rare example of relative English-Scottish parity since the Act of Union in 1707.  Historically, banking seemed something that the Scots were particularly skilled at – it was a Scotsman, William Paterson, who helped found the Bank of England in 1694.  Mind you, thanks to Fred ‘the Shred’ Goodwin, that reputation for Scottish banking excellence is now well and truly dead.


I also had replies claiming that London’s financial sector, fashioned indirectly by North Sea oil revenues, is a legacy of 1980s / 1990s Conservative rule that Britain can still be proud of.  Despite what happened in 2008, one person claimed, it remains immensely powerful and important and outstrips anything that, say, Germany’s financial sector is capable of.  Well, overall, Germany’s economy is still bigger than Britain’s and it’s more healthily balanced.  Its traditional manufacturing industries were allowed to evolve too over the past 30 years, rather than being knocked on the head.  (I remember walking along a street in Berlin a few years ago and seeing a huge queue of excited Germans standing outside a car showroom.  They were queuing to have their photos taken, proudly, beside the latest model to have been unveiled by BMW.) 


I have no doubt, though, that London will continue to grow and become even more of a shining financial citadel than it is now – certainly with the likes of Boris Johnson around to defend it against allegations of impropriety and wheeling-dealing.  Mind you, I suspect the growing disparity between it and the rest of the country will eventually inflict more disunity on the United Kingdom than any amount of campaigning by Scotland’s pro-independence movement.  People in the North East of England, for example, were no doubt miffed at the release of figures about transport spending in Britain in 2011.  According to these, £5 was spent on the average North-Easterner – compared with £2731 spent per head of population in London (


Finally, a pertinent link:


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