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Eight former UK energy ministers have called for the government to curb restrictions and taxes on the North Sea oil and gas industry, arguing that current policy is worsening energy security while doing little to cut global carbon emissions.
The cross-party group — which includes former Tory energy secretary Amber Rudd and one-time Labour business and energy secretary Lord John Hutton — expressed their “deep concern” over the decline of UK oil and gas production.
“The premature curtailment of domestic production is not primarily the result of geology but of policy decisions made by both Labour and Conservative governments,” they said in a letter to Prime Minister Sir Keir Starmer. “Energy security is national security. Without urgent reform we will become increasingly reliant on imported liquefied natural gas.”
They called for the government to end sooner the windfall tax on the oil and gas sector and to drop the ban on new exploration licences in the North Sea.
“With such substantial resources still available to the UK, it makes no sense at all to pursue policies which will only increase our energy imports,” former Tory energy minister Charles Hendry told the FT. “We are calling on the Government to allow new drilling licences that will maintain UK energy security, protect jobs, generate revenue and attract investors back to the North Sea.”
The letter adds to calls on the UK government to change course on the North Sea, including from industry lobbyists, the GMB industrial union and the Tony Blair Institute think-tank.
The current government has stopped the issuing of new exploration licences as part of its push towards lower-carbon energy sources to tackle climate change, although some projects linked to existing fields are still being allowed. Labour ministers have also extended a windfall tax introduced in 2022; it will now end in 2030 unless prices fall below a certain threshold before then.
Labour argues that the North Sea is in natural decline after decades of production and it is trying to help the sector evolve by moving into areas such as offshore wind and carbon capture. Energy secretary Ed Miliband has also said that increasing drilling in the North Sea would not cut bills as energy prices are set on the international market. Supporters of Labour’s policies also argue that Britain should set an example in showing how to shift from oil and gas to renewable energy.
But critics say the policies have accelerated the natural decline of the ageing North Sea basin, leaving the UK vulnerable and more reliant on imports because it still uses oil and gas for about 75 per cent of its total energy needs.
Even if Britain were to reach net zero by 2050, the country is still expected to use some fossil fuels, with the emissions captured and stored.
The letter’s signatories also include Graham Stuart and Greg Hands, energy ministers in the last Conservative government; Brian Wilson, Labour energy minister in the early 2000s; Tim Eggar, who was a Tory energy minister in the 1990s and later chaired the North Sea Transition Authority Regulator until 2024; and Fergus Ewing, former energy minister in the Scottish government.
Rudd, the former UK energy secretary who also signed the letter, is currently on the board of Centrica, the FTSE 100 owner of British Gas, Britain’s second largest household energy supplier.
Hendry is a distinguished fellow of the Atlantic Council Global Energy Center, a non-profit organisation that has received funding from various states, foundations and corporations including the US and UK governments and oil companies Chevron and Exxon.
As well as calling to reverse the licences and the windfall tax, the former ministers also want the government to give Equinor and Shell permission to develop two giant new oil and gasfields, Rosebank and Jackdaw. The previous government awarded permission, but this was quashed by a court which said the climate impact had not been properly considered.
A government spokesperson said its plans for the Energy Profits Levy would give “the sector and its investors the long-term certainty to plan, invest and support jobs”, adding: “We are also making sure the North Sea has a prosperous and sustainable future through record investment that helps deliver the next generation of skilled jobs while growing the clean energy industries of the future.”
