Andy Burnham walked into Downing Street on Friday with a promise to deliver “good growth in every postcode” — but within hours, the new prime minister was facing down the first major rebellion of his tenure over plans to reverse a ban on new oil and gas drilling.
Speculation is rife that Burnham will unveil fresh exploration licences for the North Sea, with sources confirming the prospect was the subject of “extensive” discussions among Labour MPs on Saturday. The decision, once expected as early as Monday, has now been pushed back. His team has refused to confirm whether new licences would be issued or whether so-called “tiebacks” — connecting new fields to existing infrastructure — would be used to avoid technically breaching Labour’s 2024 manifesto commitment not to issue new licences.
“Andy Burnham faces first Labour revolt over plans to reverse ban on North Sea oil drilling.”
The debate centres on two sites, Rosebank and Jackdaw, off the north-eastern coast of Scotland. Their licences were approved under the Conservatives but overturned last year by a Scottish court, which ruled that the environmental impact must be considered before drilling can go ahead. Ed Miliband, the energy secretary and a Burnham ally tipped for a senior cabinet role, has previously described the Rosebank licence as “climate vandalism”.
Burnham, who has promised to cut the cost of living, now faces a delicate balancing act. Mike Reader, a Labour MP and member of the party’s environment campaign group that backed Burnham for the leadership, warned that new licences would have “zero impact” on household bills because they would generate only a tiny fraction of the energy the UK needs. The threat of a backbench revolt is real, with climate campaigners and some MPs already mobilising.
The oil-and-gas dispute threatens to overshadow Burnham’s core economic agenda. He takes office as Britain contends with a series of global economic shocks, years of weak growth in living standards fuelled by underinvestment, and deep regional divisions. The Labour leader has pledged to transfer power from Westminster to local communities under a banner of “Manchesterism” — a reference to the economic revival of his home city, driven by private investment in knowledge-intensive business services, not the reopening of its cotton mills.
A strengthened industrial strategy will form the centrepiece of his plan to support growth outside London and the south-east, including a push to “safeguard sovereign manufacturing and production capability in critical sectors like steel, defence, energy, food and farming”. Britain’s manufacturing base has shrunk from about 30% of the economy in 1979 to roughly 10% today, though pockets of strength remain. But some experts warn that fetishising the industrial past is not the route to prosperity: high energy costs and competition from low-cost Asian hubs remain stiff headwinds.
With the public finances under pressure and time running out before the next general election, Burnham’s pledge to deliver growth “in every postcode” will be tested first not by economic data, but by the political fallout from a single drilling rig in the North Sea.