Blair think-tank calls for end to ban on new UK North Sea licences
Institute says new oil and gas exploration is needed to protect workers and slow the decline of the basin
Sir Tony Blair’s think-tank has called on the UK government to reverse its ban on new North Sea exploration licences and scrap the windfall tax on the oil and gas sector.
The Tony Blair Institute for Global Change, which is chaired by the former Labour prime minister, said new oil and gas exploration was needed to protect workers and slow down the decline of the basin.
It added that the windfall tax on the sector — which was introduced by the Conservative government in 2022 and extended by Labour — has deterred long-term investment and it should be “brought to an orderly close”.
“This is not about slowing the [energy] transition or denying the direction of travel,” it added. “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.”
The call is part of a TBI report published on Friday, which reiterates the think-tank’s criticisms of the UK government’s race to decarbonise Britain’s power sector by 2030, led by energy secretary Ed Miliband.
In a wide-ranging critique, the report argues that current energy policy is pushing up costs and making Britain uncompetitive at a time when China and the US are both pursuing “energy abundance”, albeit in different ways.
Calling for a reset of energy policy while keeping the UK’s overall goal to decarbonise by 2050 intact, it adds: “The UK’s real climate contribution lies not in the arithmetic of its emissions reductions, but whether it can demonstrate a model of decarbonisation that others have an incentive to follow — cutting emissions while keeping energy affordable, economies competitive and public consent intact.”
Blair led Labour to three successive general election victories and remains an influential figure in the Labour Party. Sir Keir Starmer as party leader and prime minister surrounded himself with many “Blairites”, including several veterans from the last New Labour government.
However, that wing of the party has seen its power diminished in the fallout of the Lord Peter Mandelson scandal and the departure of a number of previously senior Blairite figures in Starmer’s team in recent weeks.
The think-tank’s paper puts it more closely aligned with the energy strategy of the Conservative Party, which has also said it will scrap the windfall tax, allow new exploration drilling and take a slower approach to decarbonising the power sector.
The TBI has worked closely with petrostates the United Arab Emirates and Azerbaijan. A spokesperson said its work on net zero and energy was grounded in facts and data, adding: “Global fossil fuel demand has not disappeared, and energy security, affordability and decarbonisation must be addressed together.”
The current ban on new exploration licences in new fields in the North Sea was an election manifesto pledge of the current Labour government as part of its push to move the UK towards lower carbon forms of energy, primarily offshore wind turbines.
Ministers said in November that oil and gas drillers would be allowed to develop new fields next to existing ones, insisting this is in line with their commitment. The windfall tax is due to expire in 2030, unless oil and gas prices fall below a threshold before then.
A spokesperson for the government’s Department for Energy and Net Zero said: “The route to energy sovereignty, lower bills and thousands of good jobs in our communities is becoming a clean energy superpower.”
They argued that issuing new licences to explore new fields would “not take a penny off bills, cannot make us energy secure and will only accelerate the worsening climate crisis”.