Ed Miliband discusses Labour's plan for publicly-owned energy
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Labour's plans for North Sea oil and gas were plunged into chaos amid claims that Ed Miliband had banned new drilling there.
Reports suggested that the Energy Secretary had told regulators not to approve a further round of excavation slated for confirmation in the coming weeks.
It could mean that companies would have wasted millions of pounds on preparing their bids.
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Experts warned such a move would trigger a wave of legal action. Unions have also attacked the plans.
Sharon Graham, Unite General Secretary, said: “It is quite frankly irresponsible for Labour to keep ploughing ahead with the guillotine ban of new oil and gas licences when there is no clear plan for jobs.
“We simply cannot let go of one rope before we have hold of another. Until we have clear plans and more importantly investment, we should not be turning off the taps.
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“In a less stable world, we cannot rely on imports nor offshore our carbon responsibilities.”
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The applications, from companies seeking to exploit up to 35 new North Sea areas, were submitted as part of the 33rd offshore oil and gas licensing round initiated by the last government in autumn 2023.
It saw 76 oil and gas companies submitting 115 bids to drill for oil and gas across 257 “blocks” of the North Sea, Irish Sea and East Atlantic.
The NSTA said these would boost UK oil output by 600 million barrels.
Bids for up to 35 areas were still awaiting a decision from the North Sea Transition Authority (NSTA), the regulator, when the election was called.
On Wednesday afternoon the NSTA said that applications were still being considered, despite the change in Government.
Ed Miliband at a Cabinet meeting in London (Image: Getty)
A spokesman reiterated the NSTA’s pre-election statement that: “Further consideration is being given to a small number of remaining applications and a few more may be offered at a later date.”
However, a statement from Mr Miliband’s spokesperson said: “We will not issue new licences to explore new fields, and will not revoke existing oil and gas licences. We will manage existing fields for the entirety of their lifespan.”
Mr Miliband’s department hit back at the claims, which were initially reported in the Telegraph, saying they had been fabricated.
“This piece is a complete fabrication – it invents meetings and decisions that have not taken place,” the spokesperson said.
“As previously stated, we will not issue new licences to explore new fields. We will also not revoke existing oil and gas licences and will manage existing fields for the entirety of their lifespan.
“We are working with the North Sea Transition Authority to ensure a fair and balanced transition in the North Sea.”
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They added that nothing had changed from the position it set out in Labour’s manifesto ahead of the election.
The manifesto said the party would “ensure a phased and responsible” transition away from drilling in the North Sea that would recognise “the proud history of our offshore industry and the brilliance of its workforce”.
It also acknowledged that oil and gas production would be a part of the UK energy mix for “decades to come” but will focus on transitioning the UK away from its reliance on fossil fuels with the establishment of state-owned energy firm GB Energy.
Presiding over new licences would have been deeply embarrassing for Mr Miliband, a committed opponent of oil and gas.
Mr Miliband and Chancellor Rachel Reeves have also pledged, when in opposition, to raise taxes on UK oil and gas production profits from 75% to 78% and to slash the industry’s investment allowances.
Next Wednesday's King’s Speech, at the state opening of Parliament, is expected to outline more of Labour’s plans for taxing UK oil and gas – including allowing existing fields to keep operating.
Labour’s policies have attracted widespread criticism from within the energy industry which points out that the UK spent almost £27billion on imports of crude oil and over £21billion on gas imports last year.
Claire Coutinho, Shadow Secretary of State for Energy Security and Net Zero, said: “Ed Miliband has overridden the advice of business leaders and the unions to commit an enormous act of economic self-harm.
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“This ideological move puts both our energy security and 200,000 jobs at risk. We will still need oil and gas for decades. Labour have just made us more reliant on importing it from abroad with as much as four times the carbon emissions.
“Who will benefit? Putin, China, and exporters in Qatar and the US.”
A spokesman for Offshore Energies UK, the industry's trade association, said: “Both government and the North Sea Transition Authority have confirmed this story is inaccurate. Industry continues to champion a homegrown energy transition.”