A group of Labour MPs has called on Prime Minister Andy Burnham to ease carbon taxes and support new oil and gas exploration in the North Sea, as the government prepares to decide on the future of key drilling projects. The Industry First Group, founded by Labour backbenchers Henry Tufnell and Steve Yemm, urges the government to cut carbon levies and approve new licences, including for the Jackdaw and Rosebank gas fields.
The government’s decision on Jackdaw is expected imminently, with consideration for Rosebank expected to take longer. Both projects have faced legal and political challenges despite prior formal approvals. Critics accuse the government of delaying the Jackdaw decision, suggesting political calculations around a forthcoming by-election in a seat once held by Labour leader Sir Keir Starmer may be influencing the timing.
Polling commissioned by the group indicates significant public support for expanded domestic energy production. One survey found 55 percent of respondents backing new North Sea drilling licences, while other data cited by the group suggest up to 73 percent of voters want increased industry backing, including more drilling. The group argues these measures are necessary to protect manufacturing jobs, support industry, and maintain energy security without compromising climate commitments.
The Industry First Group’s proposals include broadening industry allowances for carbon costs, potentially exempting some sectors from the UK Emissions Trading Scheme, and adjusting the Carbon Border Adjustment Mechanism that taxes certain imported goods based on their carbon footprint. They contend these steps could help preserve at-risk sectors such as chemicals, refining, ceramics, and oil and gas, while enabling domestic businesses to compete more effectively.
Labour’s manifesto for the 2024 election includes a ban on new North Sea drilling licences, putting the party in a complex political position as the debates unfold. Some Labour MPs and allied figures emphasize the need to balance environmental goals with economic and industrial considerations. Others within the party and environmental groups have expressed concern that expanding fossil fuel extraction could undermine the UK’s Net Zero ambitions.
As the government weighs approval of Jackdaw, the controversy highlights broader tensions over energy policy, industrial strategy, and climate commitments amid ongoing legal challenges and political scrutiny. The outcome may influence the direction of UK energy production and the country’s approach to decarbonisation in the years ahead.