North Sea Oil
‘Luck, American investment, and the working class: they built Margaret Thatcher in the 80s.’
Tara Sallis | 21 November 2016

In a world where it feels like every sentence uttered in international politics has been drenched in a viscous pool of the stuff, it may be fairly surprising to hear that there was an era when oil had an even bigger part to play than it does now. Nevertheless, the undercurrents of the oil industry were better hidden back in the 1980s.

Margaret Thatcher is one of the most revolutionary and controversial figures in post-World War II British history. Love her or hate her, almost the whole Western world, in all its many political leanings, is still following the script that she wrote for neoliberalism. Planning the economy from the top and rigorous policy coming from Parliament was the paradigm of British economics for decades before she arrived. But Thatcher reluctantly dragged almost a whole party of sceptics and told them to put their faith in her policy of ‘monetarism’, a policy that generally involves higher interest rates and fiscal responsibility. Just to put this into context, the system that she proposed was completely untested with one exception: the floundering dictatorship of Chile.

North Sea Oil is a huge underwater oil reserve that will keep Scotland as a major producer for 30 or 40 more years to come. It was in the Thatcher era that the young men of our most northerly peninsular boarded ships and sailed out to try and complete what can only be described as an engineering miracle. Scottish weather is not forgiving at the best of times and the death toll crept up, most tragically in 1988, when 167 people died in an explosion on Piper Alpha. Nevertheless, American investors pumped their money into the project and experts watched, wide-eyed, as their country got a cut of the mysterious and lucrative oil market.

Meanwhile, in the warmth of her Downing Street residence, Mrs Thatcher decided to cash in her chips. Once production had picked up, around 10% of her Treasury income relied on North Sea Oil. A plummeting economy and a currency backed with no confidence was plaguing her, but oil brought value back to the pound. Spending could be increased at a time when mass unemployment had left the coffers empty, so the harshest bitterness of economic strife could be softened for some. Most importantly, Britain was self-sufficient in oil by 1980, giving all the political and economic benefits of not having to negotiate for this resource abroad. This was no fix-all, but it made the Thatcher years sufferable to enough people that she did not lose office and did get to keep on with her economic project. Without this oil boom, Thatcher may have become either as forgettable as John Smith, or as disastrous as James Callaghan.

Thatcher dedicated just a few momentary references to it in all the reflections she made on her time in office, since oil is not glamorous enough to make it into her biography and she would never admit how close to the edge she worked. But by keeping her office, North Sea Oil inadvertently allowed a revolution in economic thinking that has yet to be reversed. Perhaps when we picture the defining Thatcherites of that decade, it would be more accurate for us to picture a ruddy-faced, seafaring miner, even though Thatcher hoped that we would not. Luck, American investment, and the working class: they built Margaret Thatcher in the 80s. Hence, her reputation is still standing strong.

 

Image sourced under Creative Commons License.

James Routledge 2016