The US ambassador to the UK has said Britain should carry out “more drilling and more production” in the North Sea.

In his first broadcast interview in the job, Warren Stephens urged the UK to make the most of its own oil and gas reserves to cut energy costs and boost the economy.

“Electricity costs are four times ours in the UK, versus the US,” he told Mornings with Ridge and Frost.

“I want the UK economy to be as strong as it possibly can be, so the UK can be the best ally to the US that it possibly can be.

“Having a growing economy is essential to that – and the electricity costs make it very difficult.”

Mr Stephens told Wilfred Frost he hoped Britain would “examine the policies in the North Sea and frankly, make some changes to it that allows for more drilling and more production”.

“You’re using oil and gas, but you’re importing it. Why not use your own?” he asked.

The ambassador said he had held meetings with Sir Keir Starmer on the energy issue while US President Donald Trump was in the room, and that the prime minister was “absolutely” listening to the US view.

“I think there are members of the government that are listening,” Mr Stephens told Sky News. “There is a little bit of movement to make changes on the policy and I’ll hope that will continue.”

Energy Secretary Ed Miliband has said the UK should be prioritising net zero by 2030 to limit climate change, rather than issuing new oil and gas drilling licences.

However, the ambassador said it would take “all energy for all countries to compete” in the future, given the huge power demands of data centres and AI.

“I don’t think Ed Miliband is necessarily wrong,” said Mr Stephens. “But I think it’s an incorrect policy to ignore your fossil fuel reserves, both in the North Sea and onshore.”

The ambassador hosted Mr Trump on the first night of his second UK state visit in September – a trip that was seen as a success by both sides.

Mr Stephens said Mr Trump and Sir Keir had a “great relationship” and pointed to the historic ties between Britain and the US as a major factor in June’s trade deal and the favourable tariff rate on the UK.

“The president really loves this country,” the ambassador told Sky News.

“I don’t think it’s coincidental that the tariff rates on the UK are generally a third, or at worst half, of what a lot of other countries are facing.

“I think the prime minister and his team did a great job of positioning the United Kingdom to be the first trade deal, but also the best one that’s been struck.”

Mr Stephens – who began his job in London in May – also touched on the Ukraine war and said Mr Trump’s patience with Russia was “wearing thin”.

The Alaska summit between Mr Trump and Vladimir Putin failed to produce a breakthrough, and the US leader has admitted the Russian president may be “playing” him so he can continue the fighting.

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The ambassador told Sky News he had always favoured a tough stance on Russia and was “delighted” when Mr Trump sanctioned Russia’s two biggest oil firms a few weeks ago.

However, he emphasised the president’s call that other countries must stop buying Russian energy to really tighten the screw.

“The president, has been, I would say, careful in ramping up pressure on Russia. But I think his patience is wearing out,” said Mr Stephens.

“One of the problems is a lot of European countries still depend on Russian gas,” he added.

“We’re mindful of that. We understand that, but until we can really cut off their ability to sell oil and gas around the world, they’re going to have money and Putin seems intent on continuing the war.”

The ambassador also struck a cautious but hopeful tone on future US and UK relations with China.

It comes after Mr Trump said his meeting this week with President Xi Jinping was a “12/10”, raising hopes the trade war between the superpowers could be simmering down.

China’s huge economy is too big to ignore – but it remains a major spy threat; the head of MI5 warned last month of an increase in “state threat activity” from Beijing (as well as Russia and Iran).

Mr Stephens praised the country’s economy and said it would be “terrific” if China could one day be considered a partner.

But he warned “impatient” China is ruthlessly focused on itself only, and would like to see the US and the West weakened.

“There’s certainly things we want to be able to do with China,” added the ambassador.

“And I know the UK wants to do things with China. The United States does, too – and we should. But I think we always need to keep in the back of our mind that China does not have our interests at heart.”

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Nigel Farage has long known he would need to overhaul Reform UK’s offer on the economy, not least because of the scale of the attack it faced over conference season.

According to the Institute for Fiscal Studies, last year’s manifesto plans would cost nearly £90bn per year, with spending increases alone of £50bn.

They claimed they would pay for these through £150bn per year of reductions in other spending, covering public services, debt interest and working-age benefits – eyewatering sums that the other parties felt left Reform UK exposed.

So in traditional Nigel Farage fashion, Monday comes the pivot.

Politics live: Farage predicts early general election in 2027

In a speech in the City, Farage said that large upfront tax cuts were no longer on the agenda because of the state of the economy.

He said significant but “sensible” deregulation was needed to take advantage of post-Brexit freedoms, and put public sector pensions and even the triple lock (up for consideration but no decisions have been made) on the table.

“We want to cut taxes. Of course we do. But we understand substantial tax cuts given the dire state of debt and our finances are not realistic,” he told the 100-strong audience.

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Farage has to walk a fine line

He was unapologetic that he could not say when or by how much taxes would be lowered.

He said: “If I’m right and that election comes in 2027, then the economy will be in an even worse state than any of us in this room can even predict. How can anybody project on pensions and thresholds or any of those things between now and then?”

But he must walk a fine line – both claiming to be consistent as a politician while changing his stance.

And more broadly, given we have had “Brexit Nigel” and “trade-union Nigel” and “small state Nigel” and “nationalisation Nigel” – which all, I pointed out to him, line up like Barbies on a toy shelf today – I asked him why we should now suddenly trust “fiscal responsibility Nigel” and that this survives to and beyond the next general election?

His answer was instructive – saying that while his principles and ideology has been consistent, he conceded the practical application has had to evolve.

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He said: “I believe in pretty much the same sort of things I believed in 30 years ago. The difference is I now understand more than I did the role of the state in strategic industries.

“That’s why Richard Tice and I went to Scunthorpe… Have I adapted over 30 years into believing that the country needs an industrial strategy?

“Yes. Do I believe that actually, in certain failing industries, you know, a short-term partial nationalisation where, by the way, the bondholders and shareholders get wiped out? It doesn’t cost the government to do it.”

Interesting insight

This is an interesting insight into a politician who was associated with a certain strand of conservatism. He hopes political evolution works in his favour.

But the history of candour in British politics does not always favour the brave, as George Osborne discovered in late 2009.

As Farage threatens a benefits crackdown and becomes the only party to put changes to the triple lock on the table, will Reform UK’s original voters still be as strongly in favour?

The private equity firm which owns the Las Iguanas and Cafe Rouge restaurant chains is in talks to buy a sizeable chunk of Next 15 Group, the London-listed marketing services group.

Sky News has learnt that Epiris, which owns the Big Table casual dining group and also counted auctioneer Bonhams among its recent investments, has approached Next 15 Group about a deal.

City sources said on Monday that Epiris’s offer included Next 15 subsidiaries MHP Communications, a leading financial public relations firm.

M Booth, a consumer marketing operation; Outcast, another PR agency; and Activate, a business-to-business demand generation specialist, are also said to form part of the deal perimeter.

Ares Management, the private credit giant, is understood to have been approached by Epiris to help finance its offer.

Discussions between Epiris and Next 15 are said to be ongoing, although insiders cautioned that a transaction was not certain to materialise.

Sky News reported the approach to Next 15 earlier this year, although the identity of the bidder was unclear at that stage.

Next 15 is a marketing services conglomerate which is effectively a smaller replica of industry giants such as Publicis and WPP, the latter of which is engulfed in strategic uncertainty.

Sir Martin Sorrell, the WPP founder who now runs S4 Capital, has also been in talks about taking the business private.

A sale of its Marker division would leave Next 15 focused on its remaining technology and data-driven client businesses.
Next 15 issued a profit warning and changed its leadership earlier this year as it disclosed “potential serious misconduct” related to Mach49, a Silicon Valley advisory business it owns.

Tim Dyson, its chief executive for over three decades, has retired and been replaced by Sam Knights, the boss of Shopper Media Group, one of its subsidiaries.

The group has already been engaged in selling a number of units.

Next 15 has a market value of about £420m after seeing its stock rally in recent months.

The shares, which were trading at about 404.5p on Monday afternoon, are broadly flat over the last year.

Epiris, Ares and Next 15 all declined to comment.