Oil and gas vote is a political boost for PM – but won’t help our energy needs

Published

1 year ago

January 23, 2024

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The passing of the Offshore Petroleum Licensing Bill to its next stage is good news for Rishi Sunak.

MPs gave the bill a second reading by 293 votes to 211 on Monday evening, with the government securing a majority of 82.

The prime minister is a man, remember, who said he wants to “max out” drilling for North Sea oil and gas.

There’s been outcry, of course, from environmentalists, the clean energy industry, his political rivals and even some within his party.

But anger at the bill plays into the hands of Mr Sunak. Because it’s not really about energy security at all, but politics.

Number 10 is banking on using strong rhetoric around the continued need for oil and gas as part of its strategy of being “honest” with the public about the reality of ambitious net zero targets.

A strategy it hopes will win votes among those who’ve read headlines about the costs of a net zero transition and angry about protests by people like Just Stop Oil.

Others, including some Conservatives, argue it’s more cynical than that – an attempt to foment a “culture war” around net zero and the economic and social upheaval it will bring, to win a few much-needed votes in the next election.

Trivial gains

Now the government does have a point on the need for locally sourced natural gas.

Not a lot of campaigners like to admit this, but about 80% of the UK’s energy still comes from fossil fuels – most of it now gas. Even today, half the gas we use domestically is produced in the North Sea.

But does that mean the Offshore Petroleum Licensing Bill is going to help with that?

In short, no. The additional gas a new licensing regime might yield is trivial.

Yet there’s plenty of anti-net zero sounding rhetoric coming from the government.

Energy Secretary Claire Coutinho told the Commons on Monday evening that those opposing the bill are “putting the interests of extreme climate ideologues over the interests of ordinary workers”.

Yet despite talk of “maxing out” the North Sea, the government says it remains committed to an economy-wide transition to low carbon energy that climate science says is necessary and also inevitable.

All the more reason, argues the government, that it supports the oil and gas industry. The bill, it claims, will protect 200,000 jobs directly and indirectly connected to the offshore fossil fuel industry.

And it is true, many of these jobs are the highly skilled ones that will be needed in the transition to low-carbon energy. Building a floating offshore wind turbine is very similar to building a floating oil platform.

Only oil industry experts – including Lord Browne, the former CEO of BP – have pointed out tweaks to oil licensing won’t help secure those jobs.

The industry is in decline anyway. The only way to protect jobs is with a meaningful shift in support for the low-carbon economy.

Loud shouting

The government is funding a switch to renewables – including offshore in the North Sea. But, in the absence of a coherent energy strategy, the fossil fuel rhetoric really doesn’t help accelerate the clean transition it says it wants.

Companies wanting to invest in in low-carbon alternatives in the UK hardly see themselves as “extreme climate ideologues”.

By shouting louder about the need for locally produced fossil fuels, than the need to support low carbon energy it makes the UK look like a less reliable place to invest.

What of the Opposition? Despite having more of the facts laid out above on its side, Labour is also making political capital by opposing the bill – arguing it’s the only party that can deliver a transition that’s fair for workers.

But it’s going to have problems of its own delivering that if it finds itself in government later this year.

Hundreds of thousands of jobs in the fossil fuel economy from offshore workers to gas and heating engineers will need to “transition”.

But unions, many representing those too close to retirement to retrain to install wind farms or heat pumps, won’t support that enthusiastically.

Either way, playing politics with net zero isn’t going to help. The energy transition in the North Sea is happening anyway – the one all parties want to see is one that preserves as many jobs as will be inevitably lost as the oil and gas reservoirs decline.

That requires a coherent, costed and bold plan to manage what some see as the biggest economic and societal upheaval since the industrial revolution.

Most energy experts agree no political party is presenting us with one of those at the moment.

Business

Eco-tycoon Vince weighs sale of solar energy project

Published

9 hours ago

April 6, 2025

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Eco-tycoon Vince weighs sale of solar energy project

The energy group founded by Dale Vince, the eco-tycoon, is kicking off a hunt for investors in a solar park which is expected to become one of Britain’s biggest renewable energy projects.

Sky News understands that Ecotricity, Mr Vince’s company, has hired KPMG to explore talks with prospective investors or buyers for the project at Heckington Fen in Lincolnshire.

The development was approved by Ed Miliband, the energy secretary, earlier this year, and when completed it is expected to generate roughly 600MW of solar power.

It has been designated a Nationally Significant Infrastructure Project by the government.

Heckington Fen will also provide 400MW of battery storage capacity.

According to documents circulated to potential bidders, Ecotricity is prioritising the sale of 100% of the project, but is open to retaining a minority stake.

The company wants to complete a deal during the third quarter of the year.

Responding to an enquiry from Sky News, Mr Vince said: “Heckington Fen is a fabulous opportunity; it’s also a massive one, possibly the biggest onshore renewable initiative in Britain.

“The project is shovel-ready with a grid connection in 2028 – something which is increasingly hard to find these days.

“Whilst this is a great project which is going to go ahead, the sums of money required to build this alone in a short timeframe, means we’re looking for investors or partners to help make this happen.”

Business

Sir Keir Starmer pledges to protect UK companies from Trump tariff ‘storm’

Published

18 hours ago

April 6, 2025

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Sir Keir Starmer pledges to protect UK companies from Trump tariff 'storm'

Sir Keir Starmer has said his government stands ready to use industrial policy to “shelter British business from the storm” after Donald Trump’s new 10% tariff kicked in.

The UK was among a number of countries hit with the lowest import duty rate following the president’s announcement on 2 April – which he called ‘Liberation Day’, while other nations, such as Vietnam, Cambodia and China face much higher US levies.

But a global trade war will hurt the UK’s open economy.

The prime minister said “these new times demand a new mentality”, after the 10% tax on British imports into America came into force on Saturday. A 25% US levy on all foreign car imports was introduced on Thursday.

It comes as Jaguar Land Rover announced it would “pause” shipments to the US for a month, as firms grapple with the new taxes.

On Saturday, the car manufacturer said it was working to “address the new trading terms” and was looking to “develop our mid to longer-term plans”.

Referring to the tariffs, Sir Keir said “the immediate priority is to keep calm and fight for the best deal”.

Writing in The Sunday Telegraph, he said that in the coming days “we will turbocharge plans that will improve our domestic competitiveness”, adding: “We stand ready to use industrial policy to help shelter British business from the storm.”

It is believed a number of announcements could be made soon as ministers look to encourage growth.

NI contribution rate for employers goes up

From Sunday, the rate of employer NICs (national insurance contributions) increased from 13.8% to 15%.

At the same time, firms will also pay more because the government lowered the salary threshold at which companies start paying NICs from £9,100 to £5,000.

Also, the FTSE 100 of leading UK companies had its worst day of trading since the start of the pandemic on Friday, with banks among some of the firms to suffer the sharpest losses.

Sir Keir said: “This week, the government will do everything necessary to protect Britain’s national interest. Because when global economic sands are shifting, our laser focus on delivering for Britain will not. And these new times demand a new mentality.”

UK spared highest tariff rates

Some of the highest rates have been applied to “worst offender” countries including some in Southeast Asia. Imports from Cambodia will be subject to a 49% tariff, while those from Vietnam will face a 46% rate. Chinese goods will be hit with a 34% tariff.

Imports from France will have a 20% tariff, the rate which has been set for European Union nations. These will come into effect on 9 April.

Sir Keir has been speaking to foreign leaders on the phone over the weekend, including French President Emmanuel Macron, Italian Prime Minister Giorgia Meloni and Australian Prime Minister Anthony Albanese, to discuss the tariff changes.

A Downing Street spokesperson said of the conversation between Sir Keir and Mr Macron: “They agreed that a trade war was in nobody’s interests but nothing should be off the table and that it was important to keep business updated on developments.

“The prime minister and president also shared their concerns about the global economic and security impact, particularly in Southeast Asia.”

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Trump’s warning

Mr Trump has warned Americans the tariffs “won’t be easy”, but urged them to “hang tough”.

In a post on his Truth Social platform, he said: “We are bringing back jobs and businesses like never before.

“Already, more than FIVE TRILLION DOLLARS OF INVESTMENT, and rising fast!

“THIS IS AN ECONOMIC REVOLUTION, AND WE WILL WIN. HANG TOUGH, it won’t be easy, but the end result will be historic.”

Business

Santander UK lines up ex-Treasury chief Scholar as new chair

Published

2 days ago

April 5, 2025

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Santander UK lines up ex-Treasury chief Scholar as new chair

Sir Tom Scholar, the former top Treasury civil servant sacked by Liz Truss during her premiership, is being lined up as the next chairman of Santander UK, Britain’s fifth-biggest high street bank.

Sky News has learnt that Sir Tom, who played a pivotal role in the UK’s response to the 2008 financial crisis, is the leading candidate to replace William Vereker.

The appointment, which is subject to regulatory approval, could be announced later in the spring, according to insiders.

Sir Tom’s prospective recruitment comes amid a period of intense speculation about the future of Santander UK, which bulked up rapidly during the banking crisis by absorbing Alliance & Leicester and Bradford & Bingley.

The Spanish banking giant entered the British retail market in 2004 when it bought Abbey National, setting in motion a chain of dealmaking which would result in it becoming a serious challenger to Barclays, Lloyds Banking Group and NatWest Group.

If confirmed in the role, Sir Tom will follow a pattern of former senior public officials in taking on the chairmanship of Santander UK.

The post has been held in the past by Baroness Vadera, a Treasury minister during the 2008 meltdown, and Lord Burns, the former Treasury permanent secretary.

Sir Tom also held that latter role until his ousting during the shortlived Truss government, which led to him receiving a payoff of more than £350,000.

In addition to his position during the banking crisis, he was instrumental in devising the COVID-19 furlough scheme, which protected millions of private sector jobs during the series of lockdowns imposed on the British public.

He was widely respected among international banking regulators and finance ministers, and his sacking by Ms Truss sparked fury among senior civil servants.

Since leaving the Treasury, he has been appointed as chair of the European operations of Nomura, the Japanese bank.

At Santander UK, he will work closely with Mike Regnier, the former building society boss who has been its chief executive since 2022.

In recent months, there has been growing speculation that Santander UK’s parent is open to a sale of the business amid frustration about the scope and burden of British banking regulation.

Both Barclays and NatWest have been sounded out about a potential merger of their UK retail businesses with that of Santander UK, although formal talks have not progressed to a meaningful stage.

Ana Botin, Santander’s group executive chair, has appeared to publicly rule out a disposal, saying that the UK remains a “core market” for the group.

An attractively priced offer could yet gain Ms Botin’s attention, according to people close to the earlier talks.

One insider said, however, that Sir Tom’s recruitment was likely to dampen further speculation about a possible sale of the British business.

Shares in the Madrid-listed parent company, Banco Santander, have performed strongly in recent months, but fell by more than 8% on Friday as investors digested the fallout from President Donald Trump’s global tariffs blitz.

The company now has a market capitalisation of about €83.25bn (£70.7bn).

City sources said the search for Mr Vereker’s successor had been led by Heidrick & Struggles, the headhunter, in conjunction with Baroness Morgan, the former cabinet minister who sits on Santander UK’s board as its senior independent director.

This weekend, Santander UK said in a statement issued to Sky News: “Santander UK is conducting a thorough appointment process.

“The new chair will be announced once that process has concluded, including having obtained board and regulatory approval.”