Labour desperately needs to answer questions over North Sea oil and gas

Our new Energy Secretary, Miatta Fahnbulleh, who worked under Ed Miliband, has previously spoken against new oil or gas fields, so it was a (pleasant) surprise to many that she granted permission for drilling in Jackdaw.

This is where the Chancellor’s slip reveals something: was it the intention of Fahnbulleh to approve Jackdaw, or was she overridden?

And if she was overridden, who applied the pressure? Was it our new Prime Minister, or his Chancellor John Healey, who will have been looking to boost tax receipts ahead of the Budget?

While these are not decisions made by the Prime Minister, over the past few months we have seen Andy Burnham take more of a pragmatic approach than Keir Starmer, who included the ban on new licences in Labour’s 2024 manifesto.

Our new Prime Minister has framed the issue around energy security and British jobs, leaving the door open to both projects.

With the tax burden at its highest on record and growth for 2027 downgraded from 1.6 per cent to just 1 per cent, it’s little wonder that the Chancellor would be looking for revenue raisers, like Jackdaw and Rosebank.

It’s entirely feasible that the Energy Secretary has changed her mind from when she said “we can’t have any new oil or gas fields” and called using fossil fuels “irresponsible and shortsighted,” but the Chancellor’s slip-up does raise questions.

And that’s not the only question being raised about the Energy Department from the Budget this week.

Page 93 of the Office for Budget Responsibility’s post-Budget report says oil and gas tax receipts for 2026/27 are “based on the North Sea Transition Authority’s (NSTA) projection for total oil and gross gas production… which includes Rosebank”.

But what’s curious is that permission to drill at Rosebank, the large oil field off the Shetland Islands, has not yet been granted.

Which, once again, begs the question… what is going on in the Department for Energy Security and Net Zero?

When pressed in the House of Lords the day after the Budget by Conservative Lords about the inclusion of Rosebank tax receipts in the Budget papers, the Government Minister admitted it would

“need to be addressed” and “The OBR will have to republish the figures if Rosebank does not go ahead”.

The Government has kept relatively quiet about Rosebank, with Burnham saying in the House of Commons – just minutes before the Budget – that it “was obviously a matter for the Energy Secretary” and a decision would be made “in due course”.

So what does the Energy Secretary think? Well, only last week, DESNZ officials told the Guardian that Fahnbulleh was “minded to refuse” Rosebank.

But if it is the case that the decision-maker is considering refusing Rosebank, why is the Treasury including expected tax revenue that would be raised from that very field in its financial calculations?

And in the event that Rosebank is rejected, what does that mean for the financial projections the Treasury has made? Will they be forced to cut funding, will they borrow more to fill the gap or raise taxes yet again?

The Conservatives have been very clear about what Labour should do: approve Rosebank, overturn the ban on new oil and gas licences in the North Sea and enact our Cheap Power plan.