The government will make it illegal to grant new oil and gas licences in the North Sea, the King announced at the state opening of Parliament, signalling ministers are refusing to yield to mounting criticism that the policy is costing the UK billions in tax receipts without environmental benefits.
Energy Independence Bill
As part of an Energy Independence Bill unveiled in the King's Speech, the government will codify its pre-election pledge not to explore new oil and gas fields, aiming to "take control of our energy security." In its 2024 manifesto, the Labour party made a ban on all new exploration and drilling licences in the North Sea a central element of its promise to transform Britain into a "clean energy superpower" by 2030.
Since taking office, Labour has faced increasing pressure to abandon the pledge, with critics arguing it stifles one of Scotland's most dynamic industries and fails to improve the UK's environmental footprint. Oil and gas still account for three-quarters of the UK's energy mix, and most of those fossil fuels are now imported, meaning other countries benefit from the job creation and tax revenues generated by drilling and refining.
Growing Calls to Rethink
Calls for ministers to reconsider the ban have intensified since the outbreak of war in Iran caused crude oil prices to nearly double in a month. Last week, Norway, which drills in the same North Sea area as Britain, approved plans to reopen three gasfields that had been shut for decades to help meet global fossil fuel demand caused by the closure of the Strait of Hormuz shipping lane.
Two of Labour's main political opponents, Reform UK and the Conservatives, have vowed to overturn the ban, arguing it would boost the UK's tax take and shield it from acute supply shocks. The ban, which the government claims will help Britain escape the "roller-coaster of fossil fuel markets," has also drawn criticism from the US ambassador to the UK, who has urged Britain to exploit its reserves in multiple interviews.
Shadow energy secretary Claire Coutinho accused her opposite number Ed Miliband of being "utterly deluded" for seeking to enshrine the ban in law. "He is not making us more independent. He is making us more reliant on foreign imports," she said.
