BP's announcement that it is pulling out of the North Sea, after 60 years of generating wealth for Britain, has raised questions about the impact of Ed Miliband's energy policies. The FTSE 100 company's decision to invest elsewhere is seen by some as a disaster for Britain, with critics pointing to Miliband's legacy as energy secretary.
Miliband's Policies Blamed
Miliband, who is no longer energy secretary, blocked new North Sea drilling and delayed the Rosebank and Jackdaw fields. He also increased the Energy Profits Levy from 25% to 38%, imposing an effective tax rate of 78% on North Sea producers, extended the levy to 2030, and scrapped a valuable investment allowance.
These measures are said to have engineered BP's exit. Prime Minister Andy Burnham, who is on holiday, has shifted Miliband to the foreign office, but the decision on Rosebank and Jackdaw now rests with new energy secretary Miatta Fahnbulleh, who has hinted at a more pragmatic approach but has yet to act.
Economic Consequences
BP boss Meg O'Neill urged Burnham to back Britain's fossil fuel industry, noting that the UK still gets around 75% of its energy from oil and gas. The drilling ban is seen as performative politics, as Britain continues to buy fossil fuels from abroad, potentially increasing emissions and costing the economy up to £165 billion.
The bigger threat is the potential shift of BP's listing from London to New York, which could trigger a similar move by Shell, the UK's second biggest company at £185 billion. AstraZeneca is also considering a US tie-up after being left fuming by the government's lack of support.
London Stock Exchange Decline
The number of companies listed on the London Stock Exchange has plunged from 2,365 in 2015 to around 1,530 today, with a third gone in 10 years. Losing three of the top 10 companies would be a national disaster, potentially ending the City of London's dominance.
While Burnham enjoys his holiday, Britain's corporate crown jewels are eyeing foreign shores, and the country is getting poorer. Miliband, who once called BP's profits "morally and economically wrong," may be delighted, but the implications for Labour's spending plans are unclear.
