But Norway’s neutrality during the First World War, coupled with it receiving an invitation to establish a government-in-exile in London during the second, indicates a healthy relationship between the two. It’s said that diplomatic relations were strained, and questions raised in the House of Commons when in 1911 a Norwegian expedition led by Roald Amundsen became the first to reach the Geographic South Pole, in doing so beating the British Captain Scott’s Terra Nova expedition by a month. If you disregard the Norse invasions of Britain during the Viking Age, you still need to go back two centuries to the so-called ‘Gunboat War’ of 1807-1814 to find military hostility between the nations. Next time we won’t p*ss it up against the wall.”Īlthough never one of the great geopolitical rivalries, the relationship between the United Kingdom and Norway has had its moments.
In Aberdeen, the self-appointed oil capital of Europe, during the early 1990s recession a piece of graffiti appeared saying: “Dear God, give us another oil boom. That the two countries should be so far apart in terms of their current prosperity comes down basically to the British spending their profits while the Norwegians saved theirs. Since then, both countries have produced similar amounts of hydrocarbons: the UK has produced 42.8 billion barrels of oil equivalent (boe) and Norway 40 billion boe. The UK and Norway both began offshore exploration and production in the mid-1960s with the first oil discoveries made in 1969. According to the Natural Resource Governance Institute, “The two countries have equivalent geology and a similar resource base – the North Sea Basin is effectively split down the middle between them. Even if this is the case, the fact remains that the UK and Norway share a level playing field. In his book Before the Oil Runs Out, author Ian Jack makes the point that luck plays an “especially big part in dictating how near a tribe, a village or a country lies to a workable carbon deposit”. Today, the economic fortunes of the two countries differ vastly: in terms of GDP per capita Norway is currently the second wealthiest country on Earth (after Luxembourg), while the UK comes in 20th, with a GDP per capita of almost exactly half of Norway’s - US$52,291 (£38,961) compared with $102,907 (£76,686) (projected figures for 2022). This is exactly what Norway did, investing its surplus revenues in the so-called ‘Oil Fund’ which owns 1 per cent of the world’s stocks, is valued at more than US$1tn and, according to The Economist, is the largest fund of its type in existence. Heseltine says he would have preferred to see the money invested in a ‘sovereign wealth fund’, a state-owned financial instrument for securing long-term benefits for the nation’s citizenry. As the UK’s former Secretary of State for the Environment (and later Defence) Michael Heseltine said recently, Britain under Prime Minister Margaret Thatcher “squandered the windfall” on short-term consumerist policies such as subsidised housing and mortgage tax relief policies. What the two countries did with their surplus revenue has effectively mapped their economic futures for half a century. As a direct result of tax revenues and state investment in oil generated from the North Sea, Norway was able to consolidate its economic independence and resist joining the EU. In fact, during the 1980s, taxation on oil from the North Sea delivered to the UK’s Treasury (when adjusted for inflation) an average of £18bn per annum, or 10 per cent of its entire income. The Institute of Fiscal Studies stated that “the growth of North Sea oil revenues is the most important fiscal development in the British economy in the 1980s”. With the energy crisis of the 1970s a thing of the past, Time magazine reported that “the world temporarily floats in a glut of oil”. Second, while consumers sought an alternative to dealing with the inflated markets of the Middle East, rapid exploration of the North Sea’s continental shelf meant that economically viable oilfields were coming on stream at considerable pace. First, the price of oil had rocketed since the global political shocks of the Arab-Israeli War of 1973-4 and the Iranian Revolution of 1978-9. Both nations gratefully cashed in on a new gold rush ushered in by the alignment of two factors. Back in the 1980s, for a whole golden decade, it seemed that the sun would never set on the prosperity North Sea exploration brought to the United Kingdom and Norway.
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