Ian BetteridgeI am VERY tempted to write another long post about how the decision in the 1970s not to establish a Norway-style sovereign wealth fund in favour of simply using the oil money to prop up finances at the time, has done more damage to the UK than any other decision in history. LONG THREAD, SORRY.
Without it, Thatcherism would have been impossible. No oil money, and the welfare bill for mass unemployment would have been unsustainable. Without that unemployment, union power couldn’t have been broken, and privatisation would have been far harder.
It was oil revenues that bankrolled the unemployment, the destruction of manufacturing, the high exchange rate, the termination of British coal mining, and the big bang that turned London into arguably THE capital of global neoliberalism.
Oil revenues were used to cut taxes for business and the wealthy and to fund benefits during a wave of industrial closures. The oil money paid for tax cuts at the top and the benefits at the bottom. Despite Thatcher’s reputation as a prudent manager of finance, no money was set aside for the future.
The government could afford a long confrontation with the miners because it had both the fiscal cushion and an alternative energy supply. Without North Sea gas, a miners' strike long enough to threaten power generation would have been genuinely dangerous to the government's survival.
And then, to complete the insanity, Thatcher privatised the industry generating the revenues that were funding the whole operation. The British National Oil Company (BNOC) was privatised in two phases in 1982 and 1985.
BNOC was created by Harold Wilson's government in 1975, specifically to give the British state a direct stake in North Sea extraction rather than leaving it entirely to private multinationals like BP and Shell. It was our equivalent of Norway's Statoil, established around the same time.
And of course the government freed itself in stages from all its equity in BP: 51% state ownership in 1977, down to 46% in 1981, 31.5% in 1983, and fully privatised in 1987.
Labour built the institutional architecture to capture public value from a public resource; Thatcher dismantled it, took a short-term cash payment, and handed the long-term revenue stream to private shareholders.
Norway kept its equivalent. And that is why Norway has the money to subsidise EVs to the point where it barely needs oil for cars, and we do not.
glasspshr@ianbetteridge how would you imagine coal would have been phased out under the scenario of the British gvt keeping state control of the oil company?
@glasspusher Slowly, is the quick answer. And with proper support for the communities involved.
@ianbetteridge yeah. I’m a big fan of getting rid of coal while giving the miners training and jobs on the next thing.
@glasspusher Yep. For Thatcher, closing the mines wasn’t simply an economical choice: it was political warfare. It wanted to defeat the miners, not to support a transition out of coal.
kim_harding ✅@glasspusher @ianbetteridge There is a myth that Thatcher phased out coal by closing the UK mining industry, she didn't, she just replaced British mined coal with Australian mined coal... the phase out of coal came much later.
Clutha🏴🇸🇩🇺🇦@kim_harding @glasspusher @ianbetteridge
Thatcher’s enemy (according to her) was the unions. Nissan has proven UK staff can reach agreement with employers.
Thatcher’s enemy (according to her) was the unions. Nissan has proven UK staff can reach agreement with employers.
Kim Spence-Jones 🇬🇧😷@Clutha @kim_harding @glasspusher @ianbetteridge
There is the complexity that UK coal was not only deep-mined (expensive!), but also high in sulphur and thus not suitable for burning in a world aware of the problems of sulphur dioxide (remember acid rain?) The UK coal industry was doomed, its death merely hastened and mismanaged by Thatcher (and to some extent also by politically motivated Unions led by Scargill and friends).
There is the complexity that UK coal was not only deep-mined (expensive!), but also high in sulphur and thus not suitable for burning in a world aware of the problems of sulphur dioxide (remember acid rain?) The UK coal industry was doomed, its death merely hastened and mismanaged by Thatcher (and to some extent also by politically motivated Unions led by Scargill and friends).
@KimSJ @Clutha @kim_harding @ianbetteridge
Yes, we’ve had similar problems on our side of the pond. Mines close, and the workers and the community are left to rot. That is morally unacceptable.
My grandfather owned and worked a small mine in Pennsylvania. He died of black lung