Background
The outcome of the February 1974 General Election saw the Labour Party, led by Harold Wilson, win the most seats. Prime Minister Edward Heath, leader of the Conservative Party, lost support from the Ulster Unionist Party and, although he entered coalition negotiations with Liberal leader Jeremy Thorpe, these broke down. The Labour Party then formed the new government, with a plurality of seats but without a majority. In October 1974, Wilson went back to the country to ask for a renewed mandate.
During this time, in Scotland support for the Scottish National Party had been increasing after the victory of the SNP candidate Winnie Ewing at the 1967 Hamilton by-election. The political instability surrounding the general elections of 1974 represented a time of intense political campaigning in the UK, which further brought the SNP to prominence. It was during this time that the slogan "It's Scotland's Oil" came to the fore with the February election seeing 7 SNP candidates returned, rising to 11 in October. Some well known MPs such as Tam Dalyell believe this was in no small part due to the "It's Scotland's oil" slogan employed by the Scottish National Party.
The economic background to the claim was the discovery of oil in the North Sea in the 1960s, and its coming on line in the 1970s. The majority of the largest oil fields in the UK sector of the North Sea were found in the waters to the north and east of the Scottish mainland, with the more northerly fields found to the east of the Orkney and Shetland islands. Aberdeen became the centre of Britain's North Sea oil industry, with many oil terminals such as that of Sullom Voe on Shetland and Flotta on Orkney and at Cruden Bay and St Fergus on the north east coast of Scotland, being built to support the North Sea oil industry. In the early 1970s, there was a great deal of economic turbulence with the 1973 oil price shock caused by the Yom Kippur War, resulting in rising inflation coupled with high unemployment, recession (also known as stagflation) in Scotland and the rest of the United Kingdom. Thus the economic argument that formed the basis of the slogan was that while Scotland was part of the United Kingdom, it lacked control over royalties and revenue from the majority of the oil which lay in the Scottish sector of the North Sea.
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