Sir Keir Starmer is reportedly under mounting pressure from cabinet ministers to reconsider his stance against new North Sea drilling, as the ongoing conflict in Iran continues to drive energy prices higher. This development follows a significant intervention by former Prime Minister Tony Blair, who urged the current premier to abandon key green commitments.
Economic Pressures Mount
Sources have indicated to The Times that ministers are cautioning the government about overlooking the broader economic advantages that could arise from domestic oil and gas production. While Sir Keir has consistently argued that new drilling in the North Sea would not reduce domestic oil prices, given their international determination, some ministers and industry figures are now challenging this assertion. They contend that boosting domestic production could strengthen the pound and reduce costs across the economy.
One Whitehall source explained: "People keep saying that it 'won't take a penny off' bills. But if it improves your balance of payments, it helps your currency, potentially letting you get more for your money on all sorts of goods. Even small changes make a difference at scale. It might get us a few more solar panels and batteries for the same price too."
A second source added: "There's a growing feeling that we've boxed ourselves in with a line that's technically true but politically useless. People hear 'it won't cut bills' and assume there's no economic benefit whatsoever."
Labour's Manifesto Commitment
In its 2024 manifesto, Labour pledged to issue no new licences for exploring new oil fields, arguing that such a move would "not take a penny off bills, cannot make us energy secure, and will only accelerate the worsening climate crisis." However, pressure to revisit this position has intensified after Iran's blockade of the Strait of Hormuz—a critical shipping route for one-fifth of the world's oil and gas—sent energy costs soaring.
Climate Experts Weigh In
Despite the political pressure, numerous climate experts have dismissed the notion that drilling the UK's remaining reserves would lower prices or enhance energy security. Dr Anupama Sen from Oxford University's Smith School of Enterprise and the Environment told The Independent: "Oil and gas are priced on international markets, wherever they're produced—so the idea that more North Sea extraction will bring down bills is misleading."
Professor Gavin Bridge, a fellow at the Durham Energy Institute and UK Energy Research Centre researcher, described the North Sea as a "highly mature basin" in "long-term decline." He stated: "It has been drilled for over half a century, so available new supply is now very small relative to overall market demand. Squeezing additional output from the North Sea will have a negligible impact on prices or the UK cost of living."
Tony Blair's Intervention
In a 5,000-word essay published earlier this week, Sir Tony Blair reiterated calls for Labour to expand North Sea drilling, arguing that the Iran war has exposed the UK's "structural vulnerability" to global fossil-fuel shocks. The Tony Blair Institute suggested the conflict should be viewed as part of a broader energy crisis, urging a "reset" of the UK's energy strategy, which it claims is increasingly out of step with global competitors.
When asked if he was proposing the prime minister scrap Ed Miliband's net zero targets, Blair told Times Radio: "Yes, I am, and I'll tell you exactly why... Britain's emissions are under 1 per cent of global emissions, we can't solve climate change, and to impose costs on our own businesses and consumers in order to accelerate net zero when the rest of the world is not doing so—I don't understand the logic behind it, or shutting down our own oil and gas industry in circumstances where, again, I don't know another country in the world that's doing that."
Rising Energy Bills
Earlier this month, Ofgem announced that its price cap will rise by 13 per cent from July 1, driven by the ongoing Middle East conflict. This equates to an increase of £18 per month for the average dual-fuel household, with gas bills rising by 24 per cent and electricity bills by 5 per cent.
The Department for Energy Security and Net Zero has been contacted for comment.
