Labour faces pressure to ease North Sea oil drilling ban amid industry fears and union backlash

Amid growing warnings from industry leaders and union chiefs, Labour is poised to soften its landmark policy on new North Sea oil and gas exploration. Energy Secretary Ed Miliband, who previously pledged not to issue new licences for additional fields, is now considering a compromise that could see ‘tie-backs’—new fields linked to existing operations—permitted, according to sources close to the matter.

Labour’s original manifesto commitment was designed to position the party at the forefront of climate action, vowing to end the issuance of new exploration licences. However, the implementation of this policy has coincided with production cuts and significant job losses across the North Sea sector, raising alarm among unions and local economies.

The GMB union has been particularly vocal, labelling the plan to curtail new investment in the North Sea while relying increasingly on expensive energy imports from overseas as “absolute madness”. As the party conference in Liverpool approaches, union leaders are urging Labour to offer more robust support for British manufacturers and to deliver truly competitive energy pricing.

Recent developments have seen leading oil and gas companies such as Chevron, Apache, and TotalEnergies scaling back or exiting their North Sea operations, attributing their decisions to the policy uncertainty and a punitive 78 percent tax rate on oil and gas profits. Harbour Energy, another major operator, has also announced a reduction in UK investment in favour of international projects, raising critical questions about the prospects for a so-called ‘just transition’ of skilled workers into renewable energy roles.

Official projections now indicate that the North Sea could produce up to a billion fewer barrels of oil and gas by 2050 than previously forecast, a decline that experts have partially laid at Labour’s door. This accelerated downturn is projected to put at risk around half of the estimated 200,000 jobs directly and indirectly linked to the North Sea oil and gas sector—particularly in Scotland, where labour market conditions and political factors are highly sensitive.

Ed Miliband’s team insists that they remain committed to both their climate leadership ambitions and the principle of sustaining the existing industry during an energy transition, balancing green aspirations with the practical needs of the workforce. As debate intensifies ahead of the party conference, the direction Labour chooses on North Sea licences could have profound impacts on the energy industry, jobs market, and the long-term strength of the UK’s industrial base.