Transition to clean energy ‘race of our lifetime’, says Starmer – as he defends North Sea oil pledge
Sir Keir Starmer has said the end of oil and gas extraction “has to happen eventually” and the “moment for decisive action is now”.
In a speech laying out his party’s green agenda, the Labour leader called the transition to clean energy “the race of our lifetime” as he sought to reassure industrial communities that his plans would not leave them behind.
Sir Keir said that 50,000 new jobs could be created in Scotland alone, amid a dispute with unions over his pledge to ban new North Sea oil and gas exploration.
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“I know the ghosts industrial change unearths,” he told the audience in Leith.
“As a young lawyer, I worked with mining communities to challenge the Tories’ pit closure programme, but deep down we all know this has to happen eventually and that the only question is when.
“So in all candour, the reality is this, the moment for decisive action is now.”
Sir Keir said 90% of North Sea oil and gas has already been extracted or licensed to be extracted.
He insisted that not moving ahead with the transition to clean energy would represent a missed opportunity for British workers, following concerns about job losses and damage to the local economy.
“We’ve got to seize the new opportunities, this is the race of our lifetime and the prize is real,” Sir Keir said.
Despite his reassurances, Unite general secretary Sharon Graham said “actions speak louder than words”.
“Oil and gas workers need concrete, fully costed plans that will provide cast iron guarantees that they will not be thrown under a bus in the transition to net zero.
“I have said before that we can’t have a repeat of the devastation wrought on workers and their communities by the closure of the coal mines.
“Keir is now agreeing with that, but actions speak louder than words. There can be no room for any equivocation – promises are not enough.”
Starmer said the end of oil and gas extraction “has to happen eventually”
Labour’s ambition is to make the UK a clean energy superpower by 2030.
It argues the move is central, not only to tackling climate change, but also to reducing the cost of living crisis, growing the economy, improving energy security and creating jobs.
The party has vowed to take up to £1,400 off household bills and £53bn off energy bills for businesses by the end of the decade, aided by the creation of Great British Energy – a new, publicly owned company that will generate renewable sources.
Sir Keir has already pledged to set it up within a year if his party wins the next general election, and today revealed its headquarters will be based north of the border, calling it a “down payment for a new Scotland”.
British Industry Bonus ‘to create jobs in UK’
The Labour leader also announced a new “British Industry Bonus” – a £500m a year fund for energy companies that agree to manufacture in Britain’s industrial heartlands and coastal communities.
The move emulates the thinking behind Joe Biden’s Inflation Reduction Act – a landmark package of subsidies for any companies planning to make green products or invest in green energy in the US.
While the Conservatives have expressed scepticism over the measure, Sir Keir claimed the act is “setting the pace”, adding: “In seven months they’ve (the US) created more jobs than we have in seven years, but they’re not the only ones and in truth, we’ve never been on this pitch.”
Speaking later to Sky’s political editor Beth Rigby, he said the bonus is intended to “make sure that the jobs are here in the UK”, claiming that “whenever I go to a windfarm or any other infrastructure project and ask where were these were made, the answer is always somewhere else”.
Sky’s political editor Beth Rigby interviews the Labour leader about his clean energy plan
Labour ‘doesn’t understand climate crisis’
Another central pillar of Labour’s green plan is to axe the ban on new onshore wind within months of entering government.
The details were set out just weeks after shadow chancellor Rachel Reeves faced criticism for watering down the £28bn a year spending commitment to fund the changes, blaming rising interest rates and the “damage” the Conservatives have done to the economy.
Environment charity Friends of the Earth praised Labour for being “strong on climate rhetoric” but said clarity is needed on the pace of the fossil fuel phase out and green investment.
The Green Party also questioned the scale of Labour’s net zero ambition, after it said it will not roll back any licenses granted by the Conservatives before the next election, including the proposed Rosebank oil and gas field.
The Scottish Greens said this shows they “do not understand the climate crisis”.
The party’s climate spokesperson, MSP Mark Ruskell, said: “Unless Labour is willing to state categorically that it will scrap Rosebank then they will have lost all credibility on our climate.”
He said if the Tories lose the next election, “only Labour are capable of stopping this environmental disaster from going ahead – but they have said they won’t”.
The UK economy unexpectedly shrank in May, even after the worst of Donald Trump’s tariffs were paused, official figures showed.
A standard measure of economic growth, gross domestic product (GDP), contracted 0.1% in May, according to the Office for National Statistics (ONS).
Rather than a fall being anticipated, growth of 0.1% was forecast by economists polled by Reuters as big falls in production and construction were seen.
It followed a 0.3% contraction in April, when Mr Trump announced his country-specific tariffs and sparked a global trade war.
A 90-day pause on these import taxes, which has been extended, allowed more normality to resume.
This was borne out by other figures released by the ONS on Friday.
Exports to the United States rose £300m but “remained relatively low” following a “substantial decrease” in April, the data said.
Overall, there was a “large rise in goods imports and a fall in goods exports”.
A ‘disappointing’ but mixed picture
It’s “disappointing” news, Chancellor Rachel Reeves said. She and the government as a whole have repeatedly said growing the economy was their number one priority.
“I am determined to kickstart economic growth and deliver on that promise”, she added.
But the picture was not all bad.
Growth recorded in March was revised upwards, further indicating that companies invested to prepare for tariffs. Rather than GDP of 0.2%, the ONS said on Friday the figure was actually 0.4%.
It showed businesses moved forward activity to be ready for the extra taxes. Businesses were hit with higher employer national insurance contributions in April.
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The expansion in March means the economy still grew when the three months are looked at together.
While an interest rate cut in August had already been expected, investors upped their bets of a 0.25 percentage point fall in the Bank of England’s base interest rate.
Such a cut would bring down the rate to 4% and make borrowing cheaper.
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Analysts from economic research firm Pantheon Macro said the data was not as bad as it looked.
“The size of the manufacturing drop looks erratic to us and should partly unwind… There are signs that GDP growth can rebound in June”, said Pantheon’s chief UK economist, Rob Wood.
Why did the economy shrink?
The drops in manufacturing came mostly due to slowed car-making, less oil and gas extraction and the pharmaceutical industry.
The fall was not larger because the services industry – the largest part of the economy – expanded, with law firms and computer programmers having a good month.
It made up for a “very weak” month for retailers, the ONS said.
Monthly Gross Domestic Product (GDP) figures are volatile and, on their own, don’t tell us much.
However, the picture emerging a year since the election of the Labour government is not hugely comforting.
This is a government that promised to turbocharge economic growth, the key to improving livelihoods and the public finances. Instead, the economy is mainly flatlining.
Output shrank in May by 0.1%. That followed a 0.3% drop in April.
Ministers were celebrating a few months ago as data showed the economy grew by 0.7% in the first quarter.
Hangover from artificial growth
However, the subsequent data has shown us that much of that growth was artificial, with businesses racing to get orders out of the door to beat the possible introduction of tariffs. Property transactions were also brought forward to beat stamp duty changes.
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In April, we experienced the hangover as orders and industrial output dropped. Services also struggled as demand for legal and conveyancing services dropped after the stamp duty changes.
Many of those distortions have now been smoothed out, but the manufacturing sector still struggled in May.
Signs of recovery
Manufacturing output fell by 1% in May, but more up-to-date data suggests the sector is recovering.
“We expect both cars and pharma output to improve as the UK-US trade deal comes into force and the volatility unwinds,” economists at Pantheon Macroeconomics said.
Meanwhile, the services sector eked out growth of 0.1%.
A 2.7% month-to-month fall in retail sales suppressed growth in the sector, but that should improve with hot weather likely to boost demand at restaurants and pubs.
Struggles ahead
It is unlikely, however, to massively shift the dial for the economy, the kind of shift the Labour government has promised and needs in order to give it some breathing room against its fiscal rules.
The economy remains fragile, and there are risks and traps lurking around the corner.
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Is Britain going bankrupt?
Concerns that the chancellor, Rachel Reeves, is considering tax hikes could weigh on consumer confidence, at a time when businesses are already scaling back hiring because of national insurance tax hikes.
Inflation is also expected to climb in the second half of the year, further weighing on consumers and businesses.
Business
Government to announce new scheme as it ramps up AI adoption with backing from Facebook owner Meta
The government is speeding up its adoption of AI to try and encourage economic growth – with backing from Facebook parent Meta.
It will today announce a $1m (£740,000) scheme to hire up to 10 AI “experts” to help with the adoption of the technology.
Sir Keir Starmer has spoken repeatedly about wanting to use the developing technology as part of his “plan for change” to improve the UK – with claims it could produce tens of billions in savings and efficiencies.
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The government is hoping the new hires could help with problems like translating classified documents en masse, speeding up planning applications or help with emergency responses when power or internet outages occur.
The funding for the roles is coming from Meta, through the Alan Turing Institute. Adverts will go live next week, with the new fellowships expected to start at the beginning of 2026.
Technology Secretary Peter Kyle said: “This fellowship is the best of AI in action – open, practical, and built for public good. It’s about delivery, not just ideas – creating real tools that help government work better for people.”
He added: “The fellowship will help scale that kind of impact across government, and develop sovereign capabilities where the UK must lead, like national security and critical infrastructure.”
The projects will all be based on open source models, meaning there will be a minimal cost for the government when it comes to licensing.
Meta describes its own AI model, Llama, as open source, although there are questions around whether it truly qualifies for that title due to parts of its code base not being published.
The owner of Facebook has also sponsored several studies into the benefits of government adopting more open source AI tools.
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Minister reveals how AI could improve public services
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Mr Kyle’s Department for Science and Technology has been working on its mission to increase the uptake of AI within government, including through the artificial intelligence “incubator”, under which these fellowships will fall.
The secretary of state has pointed to the success of Caddy – a tool that helps call centre workers search for answers in official documents faster – and its expanding use across government as an example of an AI success story.
He said the tool, developed with Citizens Advice, shows how AI can “boost productivity, improve decision-making, and support frontline staff”. A trial suggested it could cut waiting times for calls in half.
My Kyle also recently announced a deal with Google to provide tech support to government and assist with modernisation of data.
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Joel Kaplan, the chief global affairs officer from Meta, said: “Open-source AI models are helping researchers and developers make major scientific and medical breakthroughs, and they have the potential to transform the delivery of public services too.
“This partnership with ATI will help the government access some of the brightest minds and the technology they need to solve big challenges – and to do it openly and in the public interest.”
Jean Innes, the head of the Alan Turing Institute, said: “These fellowships will offer an innovative way to match AI experts with the real world challenges our public services are facing.”
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