When the second pit dispute erupted, Varley articulated Labour's argument that the miners had a strong case and the Government had mishandled the situation. Heath's creation of a Department of Energy under Lord Carrington led Wilson to appoint Varley as his "shadow", and he performed soundly during the snap election of February 1974. In the resulting minority Labour government, Varley at 41 became Energy Secretary.There was a combination of three factors: the absolute faith that North Sea oil would solve Britain's problems, instead of which the curse of oil struck, though on a smaller scale than usual; the assumption that the miners could not be taken on and had to be subsidized indefinitely; and the normal left-wing fear of nuclear power.
Varley and Michael Foot, now Employment Secretary, speedily discharged Labour's mandate of getting the miners back to work. The next challenge was the arrival of North Sea oil, which was expected to transform the economy; Varley announced that a State-owned British National Oil Corporation would take a 51 per cent stake.
He paid obeisance to coal by pouring money into the industry – while upbraiding the miners for absenteeism – and curbing the nuclear energy programme, rejecting a switch to the US-designed pressurised water reactor.
Thirty-odd years on we are still paying for those decisions.