Andy Burnham faces his first confrontation with Labour MPs if he announces new oil and gas drilling licences when he becomes prime minister, insiders have warned. Speculation is rife that Burnham will unveil plans for drilling in the North Sea after being installed in Downing Street on Monday.
Manifesto pledge and internal divisions
In Labour's 2024 manifesto, the party pledged to honour existing exploration licences but not issue new ones. Burnham's team has not confirmed details of any proposals or whether they would involve new exploration licences or so-called 'tiebacks'—connecting offshore fields to approved production facilities via pipelines.
One source said the prospect of new drilling was the subject of 'extensive' discussions among MPs on Saturday, many of whom worry it could affect the climate while having little impact on energy bills and security. The debate centres on two sites, Rosebank and Jackdaw, off the north-eastern coast of Scotland.
Legal and political context
Licences for the proposed sites were approved under the Conservatives but overturned last year by a Scottish court, which ruled the government must consider environmental impact before allowing new drilling. Energy secretary Ed Miliband, a Burnham ally tipped for a senior cabinet role, has previously described the Rosebank licence as 'climate vandalism'.
Burnham, confirmed as Labour leader on Friday, has indicated cutting the cost of living will be a priority. However, Mike Reader, an MP and member of Labour's environment campaign group, said new licences would have 'zero impact' on household bills as they would generate a tiny proportion of the UK's energy needs.
Union and expert opposition
The party is divided, with some trade unions and MPs urging Burnham to support the oil and gas industry centred on Aberdeen. Others want a shift to renewable energy for long-term security. Experts argue new North Sea gas licences would have little influence on prices as the UK is 'highly integrated' with European and global markets.
'If Andy is looking to cut the cost of energy, [new licences aren't] going to touch the sides,' said Reader, who also sits on the energy security and net zero select committee. 'It will not do anything to job security, long term, in Aberdeen. We have to continue to remove this fossil fuel dependency from the UK.'
Climate and energy security concerns
In March, the Guardian reported that hundreds of new North Sea licences granted by the Conservatives during 14 years in power produced just 36 days of gas. Tessa Khan, executive director of Uplift, said approving licences would suggest Burnham is 'not taking the interests of ordinary people very seriously' and prioritising 'the interests of very profitable oil and gas companies'.
'As for our energy security, 80% of the oil we produce in the North Sea ends up being exported,' she added. 'That's not going into people's cars or British industry. There is very little oil left in the North Sea, and a field like Jackdaw would only make a 2% difference to how much we have to import to meet our gas demands.'
Bob Ward, policy director at the Grantham Institute, said remaining oil and gas in more inaccessible places requires higher operating costs, locking in high consumer prices. Lee Hunter of the Fire Brigades Union noted extreme weather incidents are becoming the 'new normal' for firefighters, adding that new licences 'would pour more fuel on the fire while doing nothing to bring down people's energy bills or improve our energy security.'
Burnham will become prime minister on Monday, expected to set out plans to take water and energy companies under public control and initiate a major council housebuilding programme.
