Third World Thatcherite Britain and the Grab for North Sea Oil

oil_rig

Last week both David Cameron and Alex Salmond held separate meetings in Scotland with the petrochemical companies in order to discuss the vital question of the ownership and future of North Sea oil. This is a vital issue. The Scots Nationalists I’ve talked to in the past have all been of the belief that not only should an independent Scotland have a right to the oil reserves off its coast, but that this would support the newly independent nation’s economy. Although this wasn’t mentioned in the news reports, Britain faces the same question. If Britain does not retain revenues from the North Sea if Scotland leaves the UK, then the British economy will plummet. It’s a question of economic survival.

I was taught at school that Britain has a ‘third-world economy’. This meant that Britain was like the various nations of the Developing World in that its economy was heavily based on primary industry. In the Developing World these industries were either mining – the extraction and production of diamonds, for example, or copper in the African Copper Belt, or the various nations around the world specialising in a particular agricultural product – groundnuts, bananas, coffee and so on. In Britain in the primary industry that fundamentally supports the country’s prosperity was North Sea oil.

The authors of the book Socialist Enterprise: Reclaiming the Economy (Nottingham: Spokesman 1986), Diana Gilhespy, Ken Jones, Tony Manwaring, Henry Neuberger and Adam Sharples, make exactly the same point:

Third World Britain

Under the Thatcher experiment, Britain’s underlying economic decline has continued and gathered pace. Only North Sea revenues now disguise its true extent. Without them it would be impossible to sustain the living standards which the working population currently enjoys. Britain’s present levels of employment, industrial activity and public services are all being paid for on borrowed time. (p. 20).

They then survey the way the Thatcher government effectively devastated the UK economy, while Labour unfairly got the blame for economic mismanagement.

It is worth emphasising how disastrous Tory economic policies have been for Britain in purely economic terms. The Tory Party has never succeeded in cultivating an image of compassion or concern for social justice: but at least, so the convention goes, it can be relied on to promote ‘sound’ economic policies and generally do the things that are in the interests of business growth. The Labour Party, by contrast, seems to have a acquired a reputation for economic mismanagement. The really remarkable achievement of the Thatcher Governments has been to find a set of policies which, while designed to make ‘economic efficiency’ the overriding objective in almost every sphere or our lives, has actually had the effect of making our economy less efficient – as well as having all the more predictable results such as a huge increase in social deprivation, inequality, injustice and division. As a result we are now in a situation where socialist economic and industrial policies offer the only serious hope not only of healing deep social divisions but also of reconstructing a viable and efficient economy.

Employment levels in manufacturing, construction and the public services plummeted after 1979. The international climate worsened, it is true, following the oil price rises of that year. All the major Western countries have faced increased unemployment during this period. But in Britain’s case, government policies have played an almost uniquely important part in creating a fall in national output and an increase in unemployment. By pursuing exceptionally high interest rates as part of the attempt to reduce money supply growth and inflation, and then letting the market determine the level of the exchange rate, the Tory Government precipitated a massive crisis in the manufacturing sector in the period 1979-81 – especially among companies which were relatively dependent on export markets or which had recently expanded investment or stocks in anticipation of sales growth. Meanwhile attempts to reduce public spending and borrowing resulted in a further deflationary effect: there was a particularly severe impact on employment as capital projects and welfare services were sacrificed to pay for the escalating costs of increasing unemployment – not merely a vicious circle but an insane one.

If we look at another traditional measure of economic success or failure, the balance of payments, we see a similar story. Since 1982, a surplus on manufactured goods has been replaced by large annual deficits – the first such deficits since the Industrial Revolution. Imports and import penetration have risen sharply in virtually every sector of manufacturing. These imports have, of course, been paid for out of oil revenues. But declining oil revenues will no longer be able to offset the growing manufacturing trade deficit in the late 1980s and 1990s.

They then go on to consider some of the contributing causes to British industrial decline, such as the price of British goods, lack of investment in research and development, and the lack of an education workforce, some of which is now extremely dated.

Nevertheless, I think the main point is still valid. Thatcher destroyed the British industrial base, and it is still only North Sea oil revenues, which is propping the economy up, despite the Tory and New Labour attempt to promote the financial sector. If Britain loses these revenues, then the British economy will collapse. My guess is that we would still be in the Developed World, but go from one of the most prosperous to one of the least.

The result of this would a further massive collapse in living standards, accompanied by bitter discontent. In the Developing World, mass poverty traditionally gave rise to extremist political movements – Marxist revolutionary groups, and the various Fascist dictatorships like those of General Pinochet, Manuel Noriega et cetera ad nauseam used to contain and suppress them. The same is likely to arise in Britain. This would effectively discredit all of the main political parties, as all of them have been influenced to a greater or lesser extent by Thatcher’s legacy. But those most effected would be the Tories as Thatcher’s party.

No wonder Cameron was up in Scotland last week trying to keep hold of North Sea oil. If that goes, then so does a large part of British prosperity and the Conservatives/ Thatcher’s image as the party of British prosperity.

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11 Responses to “Third World Thatcherite Britain and the Grab for North Sea Oil”

  1. Mike Sivier Says:

    Reblogged this on Vox Political and commented:
    “We are now in a situation where socialist economic and industrial policies offer the only serious hope not only of healing deep social divisions but also of reconstructing a viable and efficient economy,” according to the authors of a review covering Thatcherist Conservative economics, quoted in this article. The fight for North Sea Oil is the fight to prevent the population of the UK from discovering the true extent of Britain’s economic decline – that’s why Cameron is fighting so hard for it.

  2. Helen Maddock Says:

    The Rubicon was crossed back in the miners strike and the killing off of the fishing industry…….the rest is just time

  3. Barry Davies Says:

    Indeed it was Helen our heavy industry was systematically destroyed by government policy, however the Oil is under conflict because there is actually no real claim by either side for the areas in which it is extracted, even if mainland Scotland decides to secede there is no reason why the islands should be involved in that action.

  4. Joan Edington Says:

    I’m not sure what you’re getting at Barry. Scotland is not just the mainland. It is that plus all its islands.

  5. Third World Thatcherite Britain and the Grab fo... Says:

    […] Last week both David Cameron and Alex Salmond held separate meetings in Scotland with the petrochemical companies in order to discuss the vital question of the ownership and future of North Sea oil…  […]

  6. maynon2013 Says:

    privatization was all planned as part of the one world government agenda.by rothschilds bankers rothschild.com/gfa/our_clients/governments/

  7. Barry Davies Says:

    I may be wrong but I did read somewhere that the Islands could decide not to secede if the mainland does, not sure of the legality of it but apparently that was the case it was a piece that was saying about the points Salmond had not addressed.

  8. chunkyfunkymunky Says:

    Reblogged this on chunkyfunkymunky.

  9. Samuel Miller (@Hephaestus7) Says:

    Please add a “tweet” button to your blog.

  10. jaypot2012 Says:

    Although I feel desperately sorry for those who are suffering in the rUK I still feel that the only way to completely change the face of politics is by Scotland becoming independent.
    Scotland does not have just the oil, they have riches in exports that the rUK does not have. The devolved government have proven time and time again that they can, and eventually will, look after it’s own country and it’s people.
    This is a unique opportunity for Scotland as well as the rUK. Scotland can go it alone, even by keeping the pound they would still be able to look after their own, bring a better quality of life to their own and take away that chance of ever having a tory party and it’s cruel and vindictive policies.
    People are saying that labour would not be able to win an election if Scotland broke away, but they would be able to win – if Scotland had broken away from the union a hundred years, 50 years ago, then they wouldn’t have had labour MP’s anyway. The labour party should be making plans and policies incase the independence goes ahead. The tories are so bloody arrogant that they won’t make different plans and policies because they “believe” that they are going to continue as the government with or without a minority vote, they actually believe that they can win the next election!

  11. jaypot2012 Says:

    Reblogged this on Jay's Journal.

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