Sir Keir Starmer is facing growing pressure over Labour’s energy strategy after warnings that repeated claims new oil and gas drilling would “not take a penny off bills” risk undermining confidence in Britain’s domestic energy sector.
The criticism follows the publication of the 43rd Energy Transition report, which warned the UK risks accelerating the decline of the North Sea oil and gas industry despite widespread belief within the sector that it still has a viable long-term future.
The report argued that industry confidence is being weakened less by a lack of opportunity than by financial instability, planning delays, transmission charging and slow consenting processes.
Whitehall insiders also suggested frustration is growing within Government over the political handling of the issue, with some officials questioning whether Labour’s messaging on domestic fossil fuel production has become too rigid.
One source told The Times that while increased drilling may not directly reduce household energy bills, it could still strengthen Britain’s broader economic position through improved trade balances and currency stability.
“People keep saying that it ‘won’t take a penny off bills’,” the source said. “But if it improves your balance of payments, it helps your currency, potentially letting you get money for all sorts of goods.”
Another Whitehall figure reportedly warned there was “a growing feeling that we’ve boxed ourselves in with a line that’s technically true but politically useless”.
The remarks threaten to reopen divisions inside Labour over energy policy and the pace of the transition to net zero, particularly as higher global energy prices continue to fuel concerns over household costs and industrial competitiveness.
Attention has also turned towards Ed Miliband, the Energy Secretary, amid claims his relationship with the Prime Minister has deteriorated following internal political disagreements dating back to Labour’s previous leadership contests.
One source suggested that Mr Miliband no longer held the same influence over Downing Street’s energy policy direction, claiming “other arguments are now being heard”.
Mr Miliband had previously urged Sir Keir to resign during Labour’s internal disputes and is understood to maintain close political ties with Andy Burnham.
The row comes as Tony Blair also intervened in the debate over Britain’s economic priorities, reportedly urging the Government to rethink aspects of its net zero strategy while warning that welfare spending risked overtaking defence expenditure by the end of the decade.
The intervention adds to mounting political pressure on Labour as ministers attempt to balance climate commitments, energy security concerns and growing anxiety over the cost of living.
The Government has consistently defended its position, arguing that long-term energy security will depend on accelerating investment in renewable power and reducing Britain’s exposure to volatile global fossil fuel markets.
However, critics increasingly argue that limiting domestic oil and gas production risks making Britain more dependent on imports at a time of heightened geopolitical instability and rising global energy prices.
A spokesman from the Department for Energy Security and Net Zero said: “The Government is implementing the manifesto commitment to deliver fair and balanced transition in the North Sea, managing existing fields for the entirety of its lifespan and not granting new exploration licences because they will not support our energy security and will not take a penny off bills.”
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