Tony Blair urges Labour to reverse ban on new licences for oil drilling in the North Sea

Tony Blair has called on the Labour government to reverse its ban on new licences for drilling oil and gas in the North Sea, echoing calls made by US president Donald Trump.

The former prime minister’s think tank said Sir Keir Starmer should cut the windfall tax rate on oil and gas firms, saying the government’s clean power plan is “leading the UK in the wrong direction”.

Labour has committed to plans to phase out production of oil and gas in the North Sea by restricting new licences for drilling and increasing the rate of the Energy Profits Levy.

But in a new report, the Tony Blair Institute (TBI) called on the government to lift its ban on new exploration licences and to cut tax rates on the industry, saying the measures have “sharply increased policy risk and driven capital out of the basin”.

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“New licences should be granted a clear framework, focused on projects that are commercially viable, less carbon-intensive than imported alternatives and compatible with a declining long-term production profile,” the report states.

“This is not about slowing the transition or denying the direction of travel – it is about making the transition governable. An energy strategy that ignores revenue, security and political consent in pursuit of symbolic purity will not endure – and it will not deliver the climate outcomes it promises.”

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The call echoes comments made by Donald Trump, who has described the North Sea as “one of the greatest reserves anywhere in the world” and criticised the UK for making it “impossible for the oil companies to go”.

“The United Kingdom produces just one-third of the total energy from all sources that it did in 1999 – think of that, one-third – and they’re sitting on top of the North Sea, one of the greatest reserves anywhere in the world, but they don’t use it, and that’s one reason why their energy has reached catastrophically low levels with equally high prices,” he said at Davos last month.

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The TBI also criticised Labour’s bold pledge to deliver “clean power by 2030” in a bid to curb bills and tackle climate change.

Under energy secretary Ed Miliband, the government is striving to ensure almost all of Britain’s electricity comes from clean sources such as renewables and nuclear by the end of the decade.

But the TBI said the plan has become an “exercise in measuring the wrong achievements”, dubbing it “climate theatre” rather than “climate leadership”.

“This is not to say that the UK needs less ambition. What it needs is a strategy that is grounded in today’s reality,” it said.

“Clean Power 2030 is leading the UK in the wrong direction. Replacing it with a clear focus on cheaper, abundant power is the only way to sustain growth, enable electrification and maintain public consent for climate action.”