Prime Minister Andy Burnham has indicated he will adopt a pragmatic stance on North Sea oil and gas drilling, acknowledging the potential role of domestic energy resources amid rising living costs and tight government finances. His comments mark a notable shift from Labour’s formal position, which, as outlined in its 2024 manifesto, opposes issuing new licences for North Sea exploration.
Burnham’s remarks came during a visit to Cumbria, where he addressed questions about a recent phone call with former US President Donald Trump. Trump claimed that Burnham told him he intended to “open up North Sea oil,” a statement not reflected in the UK government’s official summary of the conversation. Burnham said he conveyed his intention to take a pragmatic approach toward the North Sea, emphasizing that the resource “can’t be ignored” when households and businesses face financial struggles.
The Prime Minister stopped short of confirming whether this approach would include issuing new licences or expanding drilling on existing permits. Labour’s manifesto bans new licences, and Burnham has committed to adhering to this stance, though his comments suggest a potential review of the policy. This has elicited reactions within the party, with some Labour figures, including former energy secretary Ed Miliband, a known opponent of further North Sea development, likely to resist a policy shift.
Industry groups and some political figures from outside Labour have called on the government to lift the ban on new drilling. Experts suggest that approving projects like the Jackdaw gas field and the Rosebank oil field could generate up to £25 billion in tax revenues over the next decade and support thousands of jobs. Jackdaw, located east of Aberdeen, is expected to supply gas to around 1.4 million homes starting this winter if approved. Rosebank, situated west of Shetland, has been more controversial and was previously described by Miliband as “climate vandalism.” Decisions on these sites are anticipated soon, following consultations that have faced legal challenges from environmental groups.
Trade bodies and unions have voiced support for expanding North Sea production, emphasizing energy security and economic benefits. Elizabeth de Jong, chief executive of Fuel Industry UK, highlighted the importance of maximizing domestic fuel production to sustain jobs and strengthen energy supply. Gary Smith, General Secretary of the GMB union, stressed the long-term need for oil and gas and warned against increasing reliance on foreign energy imports.
However, environmental campaigners and political opponents argue that increasing fossil fuel extraction contradicts efforts to combat climate change. Zack Polanski, leader of the Green Party in England and Wales, criticized Burnham’s comments amidst an ongoing drought and recent wildfires, warning that new drilling would exacerbate climate risks. Similarly, Hilary McGrady of the National Trust urged the government to keep fossil fuels in the ground, citing growing threats from extreme weather events.
The government is also considering industry requests to ease the windfall tax on energy profits, which some business leaders say discourages investment in the UK energy sector. Meanwhile, economic pressures persist as inflation concerns continue amid volatile global energy markets and geopolitical tensions, with the Bank of England signaling potential interest rate increases later this year.
Burnham’s nuanced shift in tone towards North Sea resources reflects the complexities of balancing economic challenges, energy security, and environmental commitments as the UK approaches its next general election.