Prime Minister Andy Burnham has indicated a potential shift in policy regarding North Sea oil drilling, stating that the resource is one "we can't ignore" at a time of tight government finances. His comments suggest a move away from the previous ideological ban on new drilling, acknowledging that North Sea oil revenues could help alleviate the cost of living crisis.
Experts estimate that lifting the ban on new drilling could generate approximately £25 billion in additional tax revenues for the UK over the next decade and support thousands of jobs. Shadow Chancellor Sir Mel Stride has urged the Prime Minister to "Get Britain drilling!" and to approve licenses for the Rosebank oil field and the Jackdaw gas field, with decisions potentially expected next month.
Whitehall sources suggest that the Jackdaw field could receive approval in time to begin supplying British homes this winter. However, a decision on the Rosebank field, which was previously described as "climate vandalism" by former energy secretary Ed Miliband, remains uncertain. Ministers are also reportedly considering requests from the industry to ease the windfall tax on energy profits, which has been cited as a factor hindering investment in the UK.
Sir Mel Stride stated that approving the Jackdaw and Rosebank sites and ending the ban on new oil and gas licenses would be a significant step towards addressing the cost of living and reducing energy bills. He criticized previous policies as "Net Zero madness" that increase costs for families and businesses.
Burnham's remarks represent a notable shift from the stance of former leader Sir Keir Starmer, who did not publicly state that developing North Sea energy would benefit the economy. The Prime Minister commented on the issue following a phone call with Donald Trump, who stated that Burnham had informed him of plans to "open up North Sea oil."
"I indicated in the phone call that I would take a pragmatic approach when it comes to the North Sea, and that is my intention," Burnham said. "There is a resource there. When people are struggling we can't ignore that."
While Labour's 2024 manifesto stated that no new North Sea licenses would be issued, Burnham's comments suggest the policy may be open for review. However, Downing Street has downplayed the prospect of an immediate policy change, asserting "no change" to the manifesto position. Nevertheless, his acknowledgment of the potential economic and financial benefits of North Sea exploitation is expected to increase pressure on Labour to take action.
Business and union leaders have also advocated for dropping the North Sea ban. Elizabeth de Jong, CEO of Fuel Industry UK, highlighted the importance of domestic production for high-skilled jobs, energy security, and the industrial future. GMB union chief Gary Smith emphasized the need for oil and gas for decades to come and warned that increased reliance on foreign energy sources leaves the country exposed.
However, Burnham's remarks have drawn criticism from environmental advocates. Tessa Khan of Uplift questioned the claim that North Sea drilling would lower energy bills, arguing it would ignore the impacts of climate change. Green Party leader Zack Polanski asserted that new drilling would exacerbate climate breakdown and endanger lives. Hilary McGrady of the National Trust urged the Prime Minister to "leave fossil fuels in the ground," citing extreme weather events in Europe.
The forthcoming decisions on the Jackdaw and Rosebank fields, expected next month, will serve as an early test of Burnham's new approach. Both fields were previously approved for drilling by the prior government but faced legal challenges from climate campaigners. Decisions on new applications will be made by ministers in a quasi-judicial capacity, with significant lobbying from both industry and environmental groups.
According to the trade body Offshore Energies UK, the two fields could generate nearly £30 billion by the end of the next parliamentary term. The owner of the Jackdaw field has stated it could supply gas for 1.4 million homes this winter, potentially reducing reliance on imports and mitigating the risk of a gas supply emergency.
