Another voice

The North Sea Bubble

Auberon Waugh

kGeCently I was dining with the owner of agreat 1, reek shipping line, a cheerful, intelligent, "nsPitable man whom I had never met before. 'Ye were talking about this and' that when suddenlY, between the fish and meat courses, he

gave a great sigh and remarked that he had a

tons of tanker laid up. I made what seemed to be the appropriate noises of sYMPathy and smirked at the butler to say, yes, ,._Perhaps another glass of Lynch Bages 1957

i :nght be in order, if only to carry us over these terrible times.

8ut I wasn't going to get off so lightly. No sn Fnner was the wine poured out than my host :-Lant over fixed me with his glittering eye like "-Le Ancient Mariner, and started telling me the storY of the North Sea Bubble. He could hardly have chosen a worse person to tell. I rolled my eyes and whistled politely as millions and Lilillions and billions and billiards cannoned and inundered around me. His English was excelient: but he might just as well have been talking

his native Greek. I can't remember any of his 'Igures or arguments, whether we have ;invested one billion pounds, or ten billion, or a

ndred billion in the North Sea oil fields, or Wtlh a `It. Multiple of this figure we have borrowed _gamst future profits, nor do 1 see that it __natters in the least. But yet I know, where'er I that there hath passed away a glory from Ohe earth. We have lost the game of billiards, n..'r ball is in baulk and we are snookered in every direction. 1‘,'"‘Then I first heard of the North Sea oil fields knew I was no mineralogist, nor was I any ; eat shakes as an economist, although I nearly aa-ssed my Prelims in that subject sixteen years eogoIt was purely in my role of political nerresPondent, as I then was, that I greeted the s with unbudgeable scepticism. This was .7'..a.tise after watching several generations of I-Miticians on their knees for a deus ex machina

to rescue them from the consequences of their own and their predecessors' feckless dishonesty, I could see that unless something turned up very soon we were going to be faced by that ultimate disaster about which politicians can still only talk in whispers; in other words, the British lower classes were going to have to start working again. This, of course, is what politicians mean when they talk about the unimaginable catastrophe around the corner and the destruction of our democratic institutions. More particularly, perhaps, they mean that they will all lose their jobs, and remunerative perks, while their enjoyable feelings of power and importance might well end bobbing up and down in the Thames, towards Waterloo and the Port of London. Judging that this prospect might not excite the same degree of popular dismay they talk sentimentally about British standards of living instead, of our lovely British jobs, handed out on the lollipop principle for every British citizen to suck as of right in his own little corner.

It is no disproof of God's existence to say that if He didn't exist, man would have had to invent Him. Rather, in fact, the reverse. The basis of much argument in the field has always been this, that He is philosophically necessary, ergo He is. The same law does not, however, apply to less sublime matters. My own scepticism about the oil may, if I am honest, have been as much due to the wish being father to the thought as it is to the breast-beating gullibility of those two arch-villains of British history, Heath and Wilson. In the event of North Sea oil proving as abundant and as accessible as we were at first given to understand, I could see no likely advantage accruing to me or to my class. Such benefits as the Government did not seize to cover further increases in public expenditure would almost certainly be distributed to the working class, and although it may seem a dog-in-the-manger attitude to grudge them anything I find it increasingly hard not to reciprocate their own animosities. With the best will in the world, one cannot really pretend that excessive prosperity becomes them well: the children grow obese and their teeth fall out, the parents make hideous noises and smells and the face of England is mutilated to satisfy their proletarian tastes and appetites.

That, at any rate, is my point of view. In the event, of course, there would probably have been no sudden acquisition of wealth because all likely profits would have been mortgaged many times over before the first drop of oil came to the surface in loans to keep our glorious standard of living afloat for the interim.

Parallels with the South Sea Bubble of 1720 seem to be amazingly exact in almost every aspect except that in 1720 it was the investing and saving classes who were made bankrupt while this time it will be the nation. Then, it will be remembered, the South Sea Company agreed to take on three fifths of the National Debt in exchange for some trading concessions in Spanish America which proved much less valuable then had been thought.

This time, our entire solvency, not to say membership of the Western community of nations, depends upon a prospectus which any child of six can see is doomed. However one dresses up the figures, the hard fact remains that a barrel of oil which costs 25 cents to bring to the surface in Saudi Arabia will cost about $6.50 in the North Sea, and the cost of transport is not a significant factor. Within that difference, there can be no question of establishing a competitive trading position, or any trading position at all. Whatever the Arabs say now, they are bound to lower their prices as soon as North Sea oil brings about a significant reductions in their sales and if they reduce them enough the European tariff wall will simply establish a high-cost industrial enclosure unable to trade on equal terms — or, indeed, on any terms — with the rest of the world.

In other words, the Arabs will knock out the competition and restore their own monopoly, raising their prices again when the danger is past, whenever they feel like it. The North Sea investment is a gigantic white elephant, explicable only in terms of democratic politics and the art of procrastination. In reality, there are only two choices open to the West unless it can discover a new, cheap source of power: either to sequestrate the oil-producing areas of the Middle East in an old-fashioned imperialistic war, with all its attendant risks — this is the course of action which Kissinger seemed to favour originally, until he discovered it did not have popular support in the new, radicalised United States — and the course 1 have always urged, which is to continue printing money as fast as possible for the Middle Eastern Currency Mountain while they try and spend it as fast as they can until such time as their oil reserves are exhausted when we repudiate the balance and start drilling in the North Sea again with a new currency designed by Oliver Messel.

Of one thing I am reasonably confident, which is that when the North Sea Bubble finally bursts I shall be proud of my little nest-egg of Krugerrands, bought from a legacy at £96 each a few years ago and now showing a healthy loss of 25 per cent. I think I have hidden them where the government won't be able to find them, and my one slight doubt is over how I will respond to torture.