When the Iron Lady Ruled Britain

by Robert Chesshyre

  Mr Stewart, an electronics engineer, had been with Osprey at the start. When the company was in the doldrums, he quit to go to the Middle East, where he wandered the desert with a couple of Arabs dropping highly expensive electronic tools down oil wells to measure what was going on below ground. In a year he saved enough to put down a deposit on an Aberdeen house. He returned to work for a British company that was trying to penetrate the oil business – they have since succeeded. However, he found them conservative, seedy, fuddy-duddy and unglamorous, tied around with rules and regulations, and he was lured back to Osprey. He and the founder, who was then still with the company, had both worked for American firms and they injected American style into Osprey. ‘We try to have a healthy attitude towards the staff, keeping them in the picture with what’s going on. We practise leadership from the front, rather than pushing from behind. The oil industry has an aura about it that encourages an expansive approach; it does things with a certain style,’ said Mr Stewart. To compete in a business in which appearances count for so much, Osprey spends a great deal on marketing.

  The company opened offices in Houston and Amsterdam, bought a British electro-optics company, which manufactured night vision equipment near Brighton – ‘in the deep south’ – and went from strength to strength with its underwater cameras. The firm provided a ‘one-stop shop’, offering specialized packages used principally in the inspection of offshore installations for maintenance and insurance purposes. The equipment takes a beating, lasting only a couple of seasons even if well looked after, so the demand continues during recession. Several American competitors were ‘taken to pieces. We broke in and caused ructions.’ Mr Stewart said: ‘We were already saturating our own market, and suspected there might be a downturn.’ So Osprey sought, and won, Ministry of Defence contracts, and began building a market in oceanographic research – the main colour television camera on the Alvin vehicle which explored the Titanic was manufactured by Osprey. Even so, their 1986 profits were wiped out by the collapse of the oil price. There were some redundancies, and the 120-plus remaining staff were asked to take a pay cut. ‘We are not unionized,’ said Mr Stewart. ‘We hope we can look after people well enough for there to be no need.’ When I visited, Osprey was back on an even keel, and the directors aimed to double the five million pounds turnover within five years. ‘We can’t afford to grow arrogant or complacent; there are one or two very enterprising new companies in the United States,’ said Mr Stewart.

  Survival in Aberdeen required people to be fast on their feet. When oil was discovered, the Webster Tyre Company – founded in 1947 to manufacture and distribute remould tyres – had twenty-five sales and service depots and a retread manufacturing plant. It had grown to a three million pounds turnover, and employed three hundred people. Radial tyres were being introduced, and the retread business was dead. The company changed its name to Webco, and went aggressively after the North Sea market. Sticking with the rubber technology it understood, it developed seals, clamps, pipe coatings and insulations, securing an international leadership. Pipes manufactured in Japan for use on a production platform being built in South Korea were shipped halfway round the world for coating by Webco, and then shipped back again. After a short period of contraction, the company grew to a seven million pounds turnover by 1985. It was heading for its first one million pounds annual profit when oil prices collapsed, and, when I visited, was rebuilding painstakingly once again, like an optimist in an earthquake zone.

  The boss was George Webster, the founder’s son, a shy, plump young man in shirt sleeves. ‘We couldn’t,’ he said, ‘batten down the hatches, sell off the Jaguar and hope that it would all blow over. We had to act swiftly. Fortunately, the skills we had were applicable to industries other than oil.’ Once again looking for ways to develop rubber technology, Webco diversified into the car component industry, in which they already had a presence, buying a major company in Wiltshire, and two small companies which they moved to Aberdeen. The Wiltshire enterprise gave them a southern presence: Aberdeen, over five hundred miles from London, had proved to be a remote base from which to operate – ‘people thought this was the North Pole. It was difficult to make an impact,’ said Mr Webster. As I understood it, they had underestimated the problems associated with their new acquisition, but were pulling through with the bank’s support. Because of its diversification, Webco was then employing a record number of people.

  Don Riggs knew about roller-coaster fortunes perhaps better than any man in Aberdeen. He had left school at fifteen and driven a horse and cart on a farm. He became an engineer through night school, and spent five years on the road as an engineering inspector before starting a valve company in his native Cleveland. Seven years later his principal customers – the steel and chemical industries – went into severe recession. His business, which had been worth £1.9 million a year, halved overnight, and he clung on by his fingertips like a man at the edge of a cliff. He had already done business in Aberdeen, and later moved north to take full advantage of oil opportunities. By late 1985 his business was thriving, with a turnover of £2.3 million. Money, he said, had been no object; if a company needed a valve, it wanted it at all costs. In late 1985 he sensed that a slump was on its way. He sold his house (above its valuation), laid off many of his employees, ran down his stocks. ‘I’d seen it all once before. I took the bull by the horns, action based on what I didn’t do in 1979,’ he said. Much of Aberdeen refused to believe the worst. On Mr Riggs’s office wall is a cutting from the Aberdeen Press and Journal, dated 18 March 1986 – three months after he had battened down his hatches. It read: ‘City Beats Oil Drop: Cut-Backs Have Not Hit North-East.’ Beneath it Mr Riggs had scrawled ‘Quote of the Century’.

  Mr Riggs had the face of an Old Testament prophet, long and fringed with a beard, and strong engineer’s hands. Two of his competitors had gone under during the oil slump: they had overextended themselves to cope with the demand, he said. He himself, when I met him, was re-employing people. He had just bought a house – ‘a better-class small bungalow’ – for £47,000. It would, he said with clear pleasure, have cost £60,000 two years earlier. Business was seeping back. Valves have a limited life in the North Sea, and production companies, he forecast, were going to have to spend a lot of money in the years to come to sustain the oil. ‘There’s going to be one hell of a good market in my business over the next twenty or thirty years. It’ll see me out,’ he said.

  If Aberdeen showed insufficient drive and enterprise fully to exploit the opportunities off its coast, the presence of oil did, however, stimulate considerably more economic activity than takes place in most of Britain. Even if the city fell short of becoming a boom town on an American scale, it did attract bright, well-educated and ambitious people, and the oil stimulated many natives to launch themselves on risky endeavours. If the main chance had been let slip, many people took mini-chances. John Freebairn, on loan from Barclays Bank, ran the Aberdeen Enterprise Trust. When it was first mooted in 1984 at the height of the oil boom, some suggested the money would be better spent in depressed places like Tyneside. Mr Freebairn’s argument was that business ought to be promoted where the markets lie. The Trust was, therefore, in existence when the oil price plummeted, when inquiries from embryo business people doubled overnight to 120 a month. By 1987, Aberdeen had become the fastest growing enterprise area in Britain, with the highest number of new businesses surviving infancy. Mr Freebairn showed me several large albums of press cuttings about people the Trust had helped, ranging from the manufacturers of obscure technical bits and pieces for the oil industry to the man who had left oil after twelve years to start a farm raising pheasants (for shooting and eating) and quails. Both enterprises looked set fair. ‘Mad inventors, however,’ said Mr Freebairn, ‘are undoubtedly the most difficult to help. Britain does not take kindly to innovation.’

  As a bank manager by training, Mr Freebairn knew the difficulties of raising risk capital from banks – essentially, since banks make loans an
d do not take part of the equity, they are risking a great deal in return for only modest interest. But he had hopes that rich people with ties to north-east Scotland might invest, perhaps with a view to retiring in the area and taking a part-time interest in an enterprise they had backed. ‘A lot of money belongs here emotionally,’ he said. Of the people he had advised (the trust had no access to material assistance), one third were English and over half came from outside Aberdeen. However, the combined employment potential of the four hundred businesses helped by the Trust in its first two and a half years was puny. Average employment at the time of starting-up was 2·3 people per enterprise, and Mr Freebairn said he would have been surprised if more than twenty of the total had real employment potential. Success for a small business, he said, is survival.

  Three of the Trust’s alumni companies had been housed together at Number Three King Street, in the heart of old Aberdeen, close to the cathedral. Two had survived, but one had been swept away by the oil recession. The one that failed was Meridian, run by two young women graduates in psychology from Aberdeen University. Their idea had been to provide a recruitment service for middle-sized firms by offering personality assessments and IQ tests on job applicants. After attending a graduate enterprise programme at Stirling University, they launched in January 1986 on the eve of the oil crash. Within weeks hundreds of people were being laid off, and a sophisticated recruitment company had less chance than a sauna salesman in the Sahara. They folded ten months later owing five thousand pounds. With the collapse of the oil price, millions of pounds had been written off Aberdeen property values. Wages had come tumbling down; almost no one was untouched.

  A joiner told me that his hourly rate had plunged from nine to two pounds. A taxi driver was working evenings and weekends instead of nine to five, and was making less money – there were 750 cabs in town, which, according to most drivers, was two hundred more than the market could bear. A former professional footballer had had two salesmen’s jobs fold under him; he was trained as a plumber, but couldn’t find any work. The Aberdeen Citizens’ Advice Bureau reported a 16 per cent increase in the numbers of those seeking help – especially with marital problems; figures which were, said the Evening Express, ‘the legacy of the boom which turned to gloom’. A 24-year-old offshore production engineer, out of work for six months, was selling his Porsche. The Aberdeen Petroleum Club, an up-market country club, lost three hundred of its 1,100 members during 1986 and was forced to launch a membership drive. One of the city’s senior business figures couldn’t sell his eight-bedroomed ‘pile’, although he had knocked £10,000 off the price – ‘Don’t talk to me about houses,’ he snorted.

  Everyone had a property story: the reporter, ambitious to move to London, who had seen the value of his house dive by £20,000, effectively meaning he couldn’t afford to move; the helicopter pilot who had been transferred to England, and had had to leave his family behind because they couldn’t sell their house. Even the city’s Gordon Barracks stood forlorn and empty, waiting for a buyer. Aberdeen was ringed with modern housing estates rushed up by national development companies during the boom. Villages which once had half a dozen houses, a church and a bog, had become communities with three or four thousand homes. Every inducement was offered to buyers, including 100 per cent mortgages that covered carpets, curtains and kitchen equipment; there had been, I was told, joy rides in helicopters and weekends at Aviemore. ‘It was easier to buy a house than a car,’ said a solicitor. Ten thousand redundancies later these estates were plastered with ‘For Sale’ signs. In one notorious street – Lee Crescent North, in the Bridge of Don to the north of the city – there were sixty-one houses for sale the week I was there. The carpets were worn, the fine washing machines chipped, and there were no helicopter rides on offer; houses were worth up to 20 per cent less than the value of the original full mortgage. The Property Register, put out by the Aberdeen Solicitors’ Property Centre, swelled to more than twice its former size. Aberdonians had traditionally bought new houses on bridging loans before selling their own. Once the bottom fell out of the market, the system jammed solid. Solicitors, who act as agents for most property sales in Scotland, were widely blamed for lack of imagination: they didn’t know, said the critics, how to build property ‘chains’. They had had it, said the man who couldn’t sell his pile, too easy for too long. But the solicitors in turn were not kind about the buyers and were angry about a ‘Panorama’ programme that had interviewed people unable to sell. People who took out 100 per cent mortgages at prices above professional valuation had only themselves to blame, they said. It was mainly the English, I gathered, who had been caught: Aberdonians had been too canny to pay inflated prices and most Americans were shrewd.

  Johnnie Patterson, like Ted McDowell a Californian, was still in town after the crash because he too had married a Scot. By early 1987 he was clinging to the wreckage. He had come to the North Sea near the beginning, in his case aboard a rig that had been pulled out of Trinidad, refurbished in Florida, and towed across the Atlantic. He had worked for the same company, Santa Fe, for nearly seventeen years, rising to ‘senior tool-pusher’, top man on the job. It was his rig that had discovered the sizeable Thistle field. He had earned five thousand dollars a month clear of tax, which was handled by his company, and been given airline tickets once a year equivalent to a return fare to Los Angeles. Life had been good, and he had been planning to move to a smallholding outside Aberdeen so that his wife could have a horse.

  Eight months before I met him, he had been ‘let go’. He sat in his split-level living room – pool table, two televisions, Alsatian puppy, parakeet – dressed in Texan boots, open-necked plaid shirt and jeans, and listed his problems. His house, which had been valued two years previously at £95,000, had been on the market for six months, most recently at £75,000, and he had not had a single caller; his twin ten-year-old sons were in a boarding school and would have to be pulled out at the end of the school year if he didn’t get a job; he believed he now faced prejudice because he was an American and companies were nervous that he would be looking for ‘big bucks’. Twice he had been told that he was overqualified. Cost-cutting had led, he said, to labour agencies providing scratch drilling crews. ‘They expect these people to go out and drill an oil well. All I can see is screw-ups.’ However, he was an optimist after the American fashion, and believed something would come along by summer. If it didn’t, he would probably take his Scottish family back to California where he had some property, and seek work in the construction industry. His American nationality gave him an option not available to British oilmen.

  Where I did find a bleak sense of defeatism was in the offices of the trade unions. Since the boom days the unions had suffered two grievous blows – the drop in the oil price with the massive local redundancies that caused, and Mrs Thatcher’s successful assault on their powers. Their greatly altered fortunes were another of Aberdeen’s microcosms of national trends. Tommy Lafferty, of the construction section of the Amalgamated Engineering Union, sat alone in his offices wearing a yellow sports shirt and chewing the end of a large cigar. His walls were decorated with photos of giant oil platforms and the Sullom Voe terminal on which he had worked; occasionally he left his desk to point out with pride one of the platforms. He had started life as a steel erector, travelling the country on big jobs such as power stations, a ‘gipsy’ as he put it. His branch’s heyday had been during the construction phase, when a man might earn comfortably over £20,000 as a rigger, steel erector or scaffolder. But there were no union agreements with the production companies, and a man doing identical work once a platform had come on stream might find his wages cut by half. It was a difficult industry to organize at the best of times; during a recession it was clearly a nightmare. An official would have to stay offshore for a continuous 28-day stretch to meet everyone employed on one structure.

  Mr Lafferty was ‘angry, annoyed, disappointed’ by the turn in events. He said: ‘Once they no longer needed us, we were thro
wn to the wind, all in the name of commercial enterprise.’ All the perks had gone – the air fares, the paid waiting time, the generous notice, the taxis, the sick leave, the payments when the weather was too bad to put to sea. ‘I thought we had problems then. I wish to hell we could go back to them. Problems then were connected with working: now they’re all to do with not working,’ he said sombrely. ‘For every job that comes up, we’ve probably got twenty men chasing it. We get car loads, six at a time, travelling perhaps from Tyneside, sleeping rough. It’s pathetic.’ As we talked, the phone rang. It was one of his members who had been put ashore from a production platform for challenging the allocation of overtime. Although the man was not covered by an agreement, he was lucky in that Mr Lafferty knew someone with the company and had managed to get him reassigned to another platform. ‘Son, the protection I can offer you is nowt. Watch it, and don’t put your head above the parapet. Keep your trap shut,’ he said. It was not exactly fighting talk. To me he said sadly: ‘It couldn’t happen onshore. The shop steward would get the lads together, explain what had happened, and stop it.’

  Industrial tribunals heard almost daily claims of unfair dismissal. In one case an engineer said that he had been promised a salary rise after three months, which hadn’t materialized. Instead he had been asked to take cuts in allowances and bonuses, which meant that his pay would be 27 per cent lower than when he started. The company also froze all other wages, closed their sales department and made some workers redundant. The engineer resigned, complaining of constructive unfair dismissal. The tribunal, however, ruled that the company had acted reasonably. ‘We lose nine out of ten such cases,’ a union activist complained sadly.