“Few nations are better placed to navigate the challenges ahead,”—Boris Johnson
This typically bullish Boris Johnson assertion in the March 2021 Global Britain in a competitive age publication has yet to be realised 18 months later. The most cursory glance over UK economic history sreveals a short-sighted ineptitude in strategic thinking, highlighted by the announcement of another 80% hike in energy bills in a country that is self-sufficient in energy. We kept building steam engines and similar dying steel or shipbuilding. Worse, we treated our North Sea oil bonanza as a cash cow.
North Sea oil fields divide equally between UK and Norway. But each chose a different path to exploit them. Given the greater economic clout of UK we could have made the better of the bonanza. But the Thatcher government sold off the assets and used revenue from oil to keep taxes low. and pay off debt
By 2016, Brent Crude price had dipped below $40 and revenue had slumped to £60 million. That year, Norway produced a similar volume of oil, but raked in £9 billion to their treasury. The difference? . While the UK privatised BNOC through Britoil by 1988, Norway’s oil and gas industry remains state-owned.
North Sea production was never permanent. While it was clear to all this wealth was finite (it peaked around 1990), the UK made no plan for the future. Contrast Norway’s consistent higher oil revenue on this chart with the UK’s, given in Union Myth-Take 5.
In 1990, while the UK was spending its windfall, Norway began a sovereign wealth fund –the Oljefondet. It now stands at over £1 trillion and funds Norway’s investments and social programmes. Whereas the UK take from this year’s oil price surge will be £17 billion, Norway’s NOK926 billion translates as £80 billion—twice ALL profits eked out of the UK sector. Had the UK government not pillaged and squandered its inheritance, Scotland could have been another Norway. It still can.
And, in case you’re wondering, in July 2022, Norway’s inflation rate was 6.8%. Before the present price hike, the average home consumed 3MW a year, costing £445. The price in Britain was £764 but will soon rise to £1,560
“Dear God, give us another oil boom. Next time we won’t piss it up against the wall.”—graffiti on a wall in Aberdeen