“Mrs Thatcher has enjoyed two advantages over any other post-war premier. First, her arrival in Downing Street coincided with North Sea oil. The importance of this windfall to the Government’s political survival is incalculable. It has brought almost 70 billion pounds into the Treasury coffers since 1979. “Without oil and asset sales, which themselves have totalled over £30 billion, Britain under the Tories could not have enjoyed tax cuts, nor could the Government have funded its commitments on public spending. “More critical has been the balance-of-payments effect of oil … Bank lending has been growing … credit-card debt has been increasing at a phenomenal rate … which shows up dramatically in an increase in imported consumer goods. Previously such a boom and growth in imports would have produced a balance-of-payments deficit, a plunging currency and an immediate reigning-back on spending … Instead, oil has earned foreign exchange and also produces remittance payments from overseas investments bought with oil money. “The situation is neither stable nor healthy in the long term: but in the short term it allows the living standards of the majority to rise rapidly, even though the industrial base, the ultimate foundation of a successful economy, is still only achieving the levels of output of 1979. The fact that we have failed to use oil to build a productive and modern industry for the future is something historians will deplore.” Tony Blair - See more at: nationalcollective/2014/03/14/when-the-oil-runs-out/#sthash.1IvhRWDB.dpuf
Posted on: Sat, 15 Mar 2014 10:59:15 +0000