When the Iron Lady Ruled Britain (27 page)

I thought of such squandered chances and the billions of wasted pounds they represented as I talked with grass roots entrepreneurs, who were usually desperate for pathetically small sums with which to turn their ideas into a reality that might revitalize their home districts and put at least some of Britain's unemployed back to work.

John Neil is a Scot who served ten years in the RAF as a caterer, and then ten years in civvy street – much of it as a surface worker for the Coal Board. He had been shocked by how little work was done at the collieries – ‘sure they work flat out,' he said, I've tripped over a few of them in my time' – and by how pampered most working people were, like dustbin men who moaned when refuse was not in correct bags. He himself had been warned to slow down by his workmates. He knew what hard work was. In his RAF days it had been nothing to work straight through a weekend. Once he had helped cook a meal for the Queen and Duke of Edinburgh, and an hour later had been on his hands and knees scrubbing drains.

He had wanted to start a takeaway food shop in a Durham town that had no such amenity. Despite the need, and despite Mr Neil's obvious diligence and his proven track record as a caterer – he had worked as chef in several hotels – the banks turned him down, and instead, with a £1,500 British Coal Enterprise loan, he had bought a mobile canteen, which he and his wife, Elizabeth, took out twice a day. His short-term ambition was to graduate to the preparation of ‘home-cooked' food for pub microwave ovens. I had a feeling that Mr Neil's abilities and Scottish determination would see him through, but a little more help would have strengthened his chances.

Whatever the bureaucratic tendency of British industry, at least some leading industrialists have become enthusiasts for enterprise. The most vociferous was Sir John Harvey-Jones, the former chairman of ICI. In 1986 he was invited to give the BBC television Richard Dimbleby lecture, and he took as his theme ‘Industry Year', which the nation was ostensibly marking. ‘If we think,' he warned us graphically, ‘we can get by with a bunch of people in smocks showing tourists around medieval castles, we are quite frankly out of our tiny minds.' When I saw him, he was equally forthright, ‘It's a sad commentary on our history and values that we should have to have an “Industry Year”. I haven't noticed the Japanese having one: it's Industry Year every bloody year in Japan.' He added: ‘There are still a lot of people in this country who believe and hope there's a way out … my problem is I cannot make the maths work.'

Sir John was an unlikely tycoon, with his unkempt appearance, taste in flamboyant ties and love of animals (he keeps donkeys). His first career was in the Royal Navy, largely as a submariner, which, he said, was ‘the biggest single formative experience that set my values.' He knew that ‘as an absolute oddball, there was no way I would have got to the top,' but his service exposed him first hand to classes from whom his education had cut him off. He discovered that they were ‘super chaps capable of anything.' He said: ‘The Navy taught one to communicate and care about one's people, to put them before oneself, and it taught other basic principles of leadership which industry doesn't teach very well.' The British, he said, live in pockets. If you go to a party, you meet people all of one kind – academics, lawyers, industrialists. In Germany, he said (he speaks fluent German), ‘a typical party would have an industrialist, a university professor, a judge, a banker maybe, a senior civil servant, a whole range of different people. Here we form ourselves into coteries.' This lack of cross-fertilization means that people with power in Britain have a poor understanding of the range of human experience. It has also meant that most people think of ‘business' as something way beyond their ken. The reluctance of people of my age to go into it was not just the powerful cultural pressures, but a feeling that we would be hopelessly incompetent at anything more daring than life in the corporate womb. That, though well paid, would be boring and a sell-out. Sir John had not been bored. Almost his first task at ICI had been to study the feasibility of a new factory on Teesside. The plant went ahead, and a quarter of a century later, the day before I met him, Sir John had diverted his chairman's plane to fly over it. ‘It's still working, still up to date, still employing people. I know that plant wouldn't exist were it not for my efforts as a 35-year-old,' he said with enormous satisfaction. He added: ‘Starting from where we are, I can't see how this country survives without a greater degree of manufacturing success than we appear to be setting our stall out for at the moment.'

I had been searching for common threads that linked the entrepreneurs and business people I had been meeting. ‘Was there a formula for success?' I asked Sir John. He answered: ‘I see no correlation between business success and academic achievement. I take it for granted that a guy is intelligent and numerate. What makes for business success are rather esoteric characteristics, which are not uniformly spread – like courage, humour, balance and the ability to communicate and to listen. We have got to project business as being exciting. What I find most difficult is really persuading young people that I have a super life.'

By the time I got to Aberdeen, the ‘oil capital' of Europe, the good times were over. ‘Was the plane full?' asked the taxi driver, knowing the answer already since the London flight had not been full for many months. ‘Times,' he said, ‘are hard, business half what it has been.' He would head home after this fare: there was not much point in sticking about in the evenings any more. On a black Sunday night, as a sharp wind funnelled between the small cobbled streets off Union Street, the only signs of life were couples embracing in the shelter of doorways. Out at sea, lights twinkled as if someone had parked a promenade a few miles offshore: they came from the surplus oil exploration rigs, waiting, as dockers once had, for what demand for their labour there might be. In the harbour, lights also shone from the supply vessels, which were moored in hope of a charter on the ‘spot' market: a security man in a Land Rover stared vacantly at the dark water. Across the street a vast hoarding announced: ‘TO LET Victoria Tower. 78,449 sq. feet, with 140 car parking spaces. Can Divide.' Seagulls wheeled and screeched overhead. A train arrived at the station, and a scattering of men in orange oilcloth jackets, jeans and boots, slung their bags over their shoulders, hunched into the wind, and fanned out towards their lodgings. A flapping newspaper poster proclaimed: ‘City oil workers take pay cut.' Two of the men paused to absorb the message, laughed somewhat bitterly and moved on. At the hotel it was too late for supper.

I had come to Aberdeen for what seemed like a simple story. What happens, the British had asked themselves ever since the improbable discovery of oil deep beneath the hostile, cold North Sea, when the oil runs out? It had become a refrain in all national economic discussions. Was there, could there be, life after oil? The oil was seen as some form of providential gift, compensation perhaps for loss of empire. We, the British people, had done little to deserve it, but, with its blessing, we had a chance to transform Britain into an efficient modern economy, capable of competing with the French, the Germans, even the Japanese. However, it was more likely, we concluded in our pessimistic way, that, like pools winners unaccustomed to large windfalls, we would squander the cash and the opportunity. And, because the oil seemed a liquid form of fairy gold, we had a vision of it drying up as suddenly as it had come on stream, as if some giant tap would be turned off. We convinced ourselves that this fateful day was just around the corner. Aberdeen would then be another of our industrial museums like north of England smokestack towns and the Welsh valleys, a further landmark on the road to national bankruptcy. Aberdeen today, Britain tomorrow.

Articles in the London press appeared to confirm this simple storyline. ‘Bubbles' were bursting all over the headlines; oil rigs were ‘idle and forlorn'; Aberdeen's house market was a ‘nightmare'; ‘Lean times ahead', said the
Guardian
, ‘for oil capital'. Stories told of divers, once plutocrats earning £35,000 a year, driven destitute, selling their homes, their BMWs, taking their children out of private schools. Americans were leaving with the speed they had once evacuated Saigon – some, unable to sell their homes, simply threw the keys back at their building societies. City-centre pubs were said to be going bust; ten thousand jobs had been wiped out in a few months; and many of the unemployed had headed back to the depressed regions they came from – like
gastarbeiter
, surplus to requirements. The crash had been sudden.

I found Establishment Aberdeen defensive almost to the point of paranoia. In the panelled board rooms of lawyers, accountants and public relations firms, men in dark suits regarded me suspiciously. Was I another of the ‘doom and gloom' merchants, a ‘dismal Johnnie' come north to dramatize what one solicitor called ‘our wee hiccup'? A public relations official, representing much of blue-chip Aberdeen, said: ‘When the novelty of “boom” city wore off, the media in the south began to look for cracks, and last year they found them.' Edinburgh and Glasgow were, I was told, as guilty as London of dancing on what the local professional classes claimed to be an empty grave. John Condliffe, north-eastern director for the Scottish Development Agency, said: ‘Most of industrial Britain would like our problems, we're not in the basket case league. This is still Porsche town. I've worked in the Port of London, and know a dead industry when I see one.' The public relations official commented: ‘Aberdeen had a good fifteen years while other parts of the country were suffering, now it's Aberdeen's turn. The rest of Britain has been dying to get the “
ABERDEEN GOES BUST
” story. The danger is that if people think it is the end of the road, they will invest elsewhere. It is still a strong and diverse economy, and we must start paying more attention to the traditional side of things.'

Such men argued that Aberdeen had been inaccurately characterized as a former one-horse town that had enjoyed a few mad oil-rush years, and was about to revert to its primitive, dozy previous existence. In the early days of the boom, Americans would ask before they arrived whether the streets were paved, and some newcomers had been amazed to find a solid city, rather than a picturesque outpost of scattered crofts. ‘We weren't going around in bare feet and kilts,' said one businessman. An accountant delighted in taking visiting Americans to the university and showing them an archway inscribed with the date 1494, which was only two years after Columbus discovered America. The city is an historic administrative centre, a seat of learning and medicine, and has a number of traditional industries, like fishing, textiles, paper-making, agriculture, all of which have boomed in their time. ‘Unemployment was never a problem,' said the lawyer. The gaping, worked-out granite quarry next to the ultra-modern offices of Britoil, Marathon and Conoco reminded oil executives daily that the extraction of natural resources had once before played an important part in Aberdeen's fortunes, and that Aberdeen had survived its demise.

The Klondike days were over, but oil production remained at near record levels, and would continue to make Britain self-sufficient in oil for many years into the twenty-first century. The oil price, the dramatic slump of which had caused Aberdeen's problems, was back in spring 1987 at seventeen to eighteen dollars a barrel from a low of $8.50 in the summer of 1986, and exploration resumed in the remaining North Sea oilfields. An American oil chief had forecast that Aberdeen would survive to celebrate its centenary as an oil city in the year 2069. Even at the bottom of the slump Aberdeen's unemployment level was under 10 per cent. ‘Most of the nation would give their eyeteeth to enjoy a “slump” like ours,' said one company executive.

There were clearly two realities. The ‘Granite City' was still firmly built on rock, or rather oil, but a great many people had been grievously hurt. Aberdonians with a stake in the solidity of the city denied the extent of the hurt, terrified that their assets might be talked down yet further: the city's losers, overwhelmed by a turn in fortune that had cast them capriciously from affluence to a struggling existence, were uninterested in the greater prosperity. What had happened over fifteen years was a microcosm of what had been happening to the nation as a whole since the Second World War. While Britain had been dragging parts of itself towards new technology and work practices that could stand up against the rest of the world, Aberdeen, through oil, had been suddenly exposed to the full force of international competition: at its simplest, a technological breakthrough by a rival could put a firm out of business overnight. A drop in revenue could throw thousands out of work, and millions of pounds could be wiped off the value of property. In Aberdeen there was no protection against economic reality, while in greater Britain the change had come slowly, nibbling its way through archaic industries, resisted by vested interest and by conservative instinct.

Aberdeen had become a laboratory for the processes of late twentieth-century economic fortune. Its relationship with the oil, pumping at a rate of 2.5 million barrels a day from the grey sea beyond the horizon, mirrored the larger national relationship. If Aberdeen, with its close proximity to the oil, had squandered its chances, what hope was there that the nation was being more prudent? If an ‘enterprise culture' was going to exist anywhere, it was here on the remote north-eastern brow of Scotland. Here one might find winners and losers on an American scale. The dip in the city's fortunes was a good moment to take stock.

Aberdeen is not everyone's cup of tea. American travel writer Paul Theroux visited the city while researching his book
Kingdom By the Sea
, a tour of the British (and Ulster) coast undertaken during 1982. Travelling clockwise from London, he was in a jaundiced mood by the time he hit the eastern shore. He had soured perceptibly as he journeyed: Blackpool – ‘perfectly reflected in the swollen guts and unhealthy fat of its beer-guzzling visitors' – had finally eroded what indulgence of British weaknesses he had begun with. In Aberdeen, a hotel gypped him, and two nightspots wouldn't allow him in: the ‘average Aberdonian', he concluded, was ‘a person who would gladly pick a halfpenny out of a dunghill with his teeth'. Nothing was to his liking, and his comments, remembered in some places word for word five years later, explained some of the prevailing suspicion towards visitors with ballpoint pens and notebooks.

Perhaps Theroux's words had been taken to heart. I stayed longer, and visited after the oil price slump, which no doubt had had a chastening effect, but I found the people hospitable and helpful beyond average. The only hint of what Theroux perceived came when I tried to interview ‘Honey', a woman who provides such necessary oil town services as striptease and kissograms. She had apparently been featured in a ‘Panorama' programme, reading the
Financial Times
to gauge the state of the oil industry before making her own business decisions, and was clearly the thinking man's stripper. On the phone she agreed readily to meet me, and we arranged to have lunch. Later there was a message to call her. She was sorry, her business manager was angry that she had arranged to see me. Why? Money, she supposed. Could I ring him? and she gave me a number. I didn't bother. Out of the several hundred interviews and conversations I conducted for this book, that was the only time anyone hinted that his (or her) wisdom was worth money.

John Condliffe, of the Scottish Development Agency, is an Englishman, as were many of those I met, including Dr Geoff Hadley, the politically independent convenor of the Grampian Regional Council, who led a minority ruling coalition which included the Scottish Nationalists! Small towns grown suddenly big often boast of their cosmopolitan ways, and in Aberdeen I suspect this was true of the oil boom years. Apart from the Americans, who came in all shapes from Texans in Stetsons to Harvard business graduates, there were French, Dutch, Germans, Norwegians. Aberdonians had enjoyed having foreign neighbours and foreign children in their schools. Accustomed to the task of straightening out ignorant fellow Sassenachs, Mr Condliffe told me about the oil. Britain, he said, was the fifth biggest oil producer in the world, out producing every member of Opec (Organization of Petroleum Exporting Countries) except Saudi Arabia. Britain consumed 1.6 million barrels a day itself, leaving 30 per cent of total production for export. ‘You can fall,' he said, ‘a very long way from there, and still be a substantial oil producer.' In addition to the thirty-six fields in production, another thirty to forty had already been discovered, and, subject to the world oil price, advances in technology and British fiscal policy – the government gave the oil industry a handsome tax break in the 1987 Budget, would eventually all be exploited. Every field was finite and oil production is always a slope going down, but the North Sea is likely to last for at least another forty or fifty years, and very few industries could look forward with certainty to that kind of future.

Although British oil costs a great deal to extract by Middle Eastern standards, a world barrel price of twenty dollars or more would make further development worthwhile. When the Forties field was discovered – Britain's first major oil strike – the price had, after all, been a mere three dollars a barrel. What was true was that the government's direct take from the North Sea had already declined dramatically, and would never rise again. Future development costs meant that the days of big profits, and therefore tax revenues, were over. But both Aberdeen and the nation could look forward to sizeable benefits for a generation to come.

For the moment, Aberdeen was suffering a ‘development gap', but, with stability ahead, Aberdeen and Britain had an opportunity to create an oil service industry second only to the Americans, which might have an export potential long after the oil itself had finally run out. Most of the other oil producing nations in the ‘free' world couldn't, according to Mr Condliffe, ‘ride bicycles'. We had, he said, less than 3 per cent of the world oil service market, but it ought to be possible to raise that to 10 per cent. However, why Britain should do better next time round, when margins will be so much tighter, than it did in the first fifteen years, was never fully explained to me. A popular bumper sticker from the darkest days of 1986 read: ‘Please God send us a second oil boom, and this time don't let us piss it up against a wall!'

If Aberdeen wasn't facing ruination, it had certainly come to the end of a spree. When oil fetched forty dollars a barrel, cost was immaterial. An American oilman told me: ‘Five years ago no one asked the price. They wanted to know, was it on its way yesterday? You'd say “Yes, what would you like?” If they haggled over the price they might lose production, and that would cost millions. Now is the time to squeeze the vendors. They don't need it yesterday or even tomorrow. Logistics are less important than the money side.' Mr Condliffe said: ‘They were talking telephone numbers. They didn't care what it cost; the urgency was to come on stream. All that's gone out of the window. Now they've got to be cost effective rather than time effective. They are no longer prepared to pay through the nose.'