The growth of North Sea oil revenues is the most important fiscal development in the British economy in teh 1980s. Yet it is one which does not impinge directly on individuals-we do not see the activity which yields these returns nor are we direct recipients of them. Perhaps it is for this reason that there is little understanding or analysis of the impact of North Sea oil on the British economy. The purpose of this article is to set out a framework for such understanding with directly oil-related activities-there are already several substantial discussions of these topics (e.g. Page, 1977, Robinson and Morgan, 1978, Gaskin, 1978). Our concern is to elucidate the effects of the growth of the oil sector on the non-oil economy.