Sir Tony Blair’s think tank is urging the UK government to lift its ban on new exploration licences in the North Sea and to eliminate the windfall tax on the oil and gas sector.
The Tony Blair Institute for Global Change, led by the former Prime Minister, believes that new exploration is essential to safeguard jobs and mitigate the decline of oil and gas production in the region. They argue that the windfall tax, first introduced by the Conservative government in 2022 and later extended by Labour, has discouraged long-term investments and should be phased out.
The think tank states, “This isn’t about hindering the energy transition or ignoring its direction. It’s about ensuring that the transition is manageable. An energy policy that overlooks revenue stability and public support in the name of symbolic gestures won’t last and won’t achieve the climate results it aims for.”
This call comes from a recent report by the think tank criticizing the UK government’s aggressive push to decarbonize the energy sector by 2030, led by Energy Secretary Ed Miliband. The report argues that the current energy policies are increasing costs and making the UK less competitive, especially when compared to countries like China and the US, which are pursuing their own forms of “energy abundance.”
While emphasizing the importance of maintaining the aim of decarbonizing by 2050, the report suggests that the UK’s climate strategy should focus on showing other nations a viable model for reducing emissions without compromising energy affordability, economic competitiveness, and public backing.
Blair has historically been a significant figure in the Labour Party, having led it to three successive general election victories, and continues to influence its direction. However, the recent political landscape has shifted, reducing the influence of the “Blairite” faction following internal party controversies and departures of key figures.
The think tank’s stance aligns more closely with the Conservative Party’s energy strategy, which also favors scrapping the windfall tax, allowing new exploration drilling, and adopting a gradual approach to decarbonization.
The Tony Blair Institute has collaborated with oil-rich nations like the United Arab Emirates and Azerbaijan, emphasizing that the current energy demands must be considered alongside energy security and affordability.
The existing ban on new North Sea exploration licences was originally a commitment made by the Labour government as part of its goal for cleaner energy, centered on offshore wind power. In November, the government indicated that drillers would be permitted to explore new fields adjacent to existing ones, asserting it was consistent with their promises. The windfall tax is set to remain in place until 2030, unless oil and gas prices drop significantly.
A representative from the Department for Energy and Net Zero maintained that the transition towards clean energy is vital for achieving energy independence, lowering bills, and creating jobs within communities. They argued that granting new licences for exploration would not lower bills or enhance energy security and could intensify the climate crisis.