The final weekend before Andy Burnham enters Downing Street is being dominated by suggestions he will announce plans for new drilling in the North Sea. The incoming prime minister faces one of his first major policy tests: how to balance Labour's 2024 manifesto commitment to issue no new oil and gas licences with the pressing need for energy security and lower bills.
Burnham is expected to stick to the manifesto pledge of no new licences but will honour existing ones, according to reports. His deputy, Lucy Powell, told the BBC there would be a "change of emphasis" on North Sea oil and gas, describing it as "an important part of the transition" to clean energy. The operators of the controversial Rosebank and Jackdaw fields, given the go-ahead by the previous Conservative government, are having those decisions reconsidered due to a successful legal challenge. Environmental groups Greenpeace and Uplift argued that ministers had not considered the full climate impact from burning the fossil fuels those fields would produce. Both applications are subject to consultations that close in August.
“Explains Andy Burnham's stance on North Sea oil and gas and why his first policy test matters for UK energy security.”
The North Sea oil and gas industry has been under pressure for years. The windfall tax, introduced in 2022, has a headline rate of 78%, levied whether prices are high or low. The industry says this makes the North Sea one of the least favourable investment destinations in the world, and evidence points to investment drying up. Meanwhile, former US President Donald Trump posted on Truth Social that "the People of Aberdeen, in Scotland, are dancing in the streets" because Burnham will be "opening up, all the way, the invaluable North Sea Oil!" – though experts say that may be premature.
For UK readers, the outcome matters directly. North Sea oil and gas currently supplies about half of the UK's gas demand, and the country is still heavily reliant on fossil fuels for heating and electricity. Approving new fields could help stabilise bills in the short term and protect jobs in places like Aberdeen, but it risks undermining climate targets and the transition to renewables. Labour's 2024 manifesto argued that new licences would do little to improve energy security or reduce bills while accelerating climate change.
Q: Will Andy Burnham approve new drilling in the North Sea? No, he will not issue new exploration licences, in line with Labour's manifesto. However, he may approve development of fields that already have licences, such as Rosebank and Jackdaw, subject to legal and regulatory processes. His deputy says there will be a "change of emphasis" to a more pragmatic approach.
Q: What are the Rosebank and Jackdaw fields? Rosebank and Jackdaw are two large oil and gas fields west of Shetland and in the North Sea. They were approved under the previous government but are now stalled due to a legal challenge. A regulator called Opred is reviewing them, and public consultations run until August. Final decisions are expected after that.
Q: Why is the oil and gas industry unhappy with Labour's policy? The industry points to the 78% windfall tax and the uncertainty over whether new projects will be approved. Investment has fallen sharply. Unions and some employers want more support to ensure jobs and energy security during the transition. Labour argues that a controlled decline, not new licences, is the right approach.
What happens next is unclear. Burnham's first speech as prime minister will set out his domestic priorities, and he is expected to give "more breathing room" to households. The consultations on Rosebank and Jackdaw close in August, after which the government must decide. In the meantime, the new prime minister will have to square his climate commitments with the reality of high energy prices and a volatile global market. The North Sea's future will be one of the defining tests of his premiership.
