Ed Miliband confirms crackdown on North Sea exploration – but new drilling will continue
The government has ruled out new North Sea oil and gas exploration or lower taxes for fossil fuel companies as it struggles to protect workers from the industry’s collapse,In a strategy paper, Ed Miliband confirmed the crackdown on new North Sea exploration – although the energy secretary will still allow new offshore fossil fuel projects to move ahead as long as they are linked to existing fields,The strategy was released alongside Rachel Reeves’ budget statement, which ended months of speculation over the future of the North Sea industry by confirming the government’s intention to ban new oil and gas licences to explore new fields, and keep tax rates in place,The Labour party swept to power with a promise to end new exploration drilling, alongside a pledge to work with oil and gas companies to manage the North Sea’s remaining lifespan,The government hopes that by allowing “tie-back” projects that are linked to existing schemes it can strike a balance between protecting thousands of North Sea jobs and meeting the UK’s climate commitments.
Miliband said: “The North Sea’s workers and communities have helped power our country and our world for decades.This is our plan to ensure they continue to do so for many decades to come.”Greenpeace said that holding firm on the oil and gas windfall tax, despite fierce industry lobbying, would support the transition to clean energy.Greenpeace UK’s co-executive director, Areeba Hamid, said: “Oil and gas production has driven both the climate and energy price crises, leaving us all paying through the nose while fossil fuel companies have pocketed billions.But the winds are changing.
The future of Britain’s energy is and needs to be clean, stable, homegrown renewables – not expensive, volatile, climate-wrecking fossil fuels.“However, the current plan – and the cash – to support North Sea workers doesn’t go far enough.It’s vital they are at the heart of Britain’s transition to a clean-energy superpower, not left behind by it – but a £20m jobs package doesn’t cut the mustard.A fair transition will create thousands of new jobs, strengthen communities, and prove that climate leadership and economic security can go hand in hand.”The industry association Offshore Energies UK (OEUK) warned that the windfall tax would “cripple” investment and called for an urgent meeting with the chancellor to “explore every option to reverse this policy and prevent further economic and industrial damage”.
To secure an energy transition certificate and move ahead with a tie-back project, oil and gas firms should prove that the extra fuel production is necessary, and that projects can move ahead without investment in any new fossil fuel infrastructure.This should mean only a small fraction of the North Sea’s remaining reserves will be developed in even the most optimistic scenarios, according to analysis by Uplift, a group that campaigns to end North Sea drilling.Tessa Khan, the executive director of Uplift, said: “This government is right to end the fiction of endless drilling.The North Sea is an ageing basin, with most of the gas already burned, and new licensing will do nothing to stem the decline in jobs.“We now need this government to be bolder – to make sure the jobs and wealth generated from the shift to clean energy reach UK workers and communities, and to ensure we maintain a livable climate.
That means a proper plan for workers and an end to all new fields, including the huge Rosebank oilfield.”The government is expected to decide the Rosebank oilfield’s fate early next year.The controversial project secured an exploration licence under the previous government, meaning Miliband could give the final green light to the project without breaching his party’s manifesto.Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionIndustry sources claim that the North Sea industry’s decline will accelerate with a windfall tax – even if Rosebank proceeds and North Sea tie-back projects are approved.Oil and gas producers have faced taxes totalling 78% on their profits since the energy crisis caused a surge in market prices.
However, the windfall tax has continued to take a toll on production as oil prices have fallen back to pre-crisis levels,North Sea spending has collapsed from more than $35bn (£26bn) a year in 2015 to about $15bn in 2023, according to government data, causing the industry’s total workforce – including direct and indirect jobs – to more than halve, from about 450,000 to 200,000 over the same period,Industry analysts at Stifel, an investment bank, predicted that under the government’s current fiscal regime jobs in the sector will halve again before the end of the decade,The blow to jobs and investment will also take a toll on Treasury revenues, according to official data,Tax receipts from the industry are expected to fall by more than 41% from last year to £2.
7bn in this financial year, according to the Office for Budget Responsibility.This is £2.5bn lower than its forecasts in March.By the end of the decade, receipts are forecast to plummet to £300m under the government’s windfall tax.David Whitehouse, the chief executive of OEUK, said: “Today, the government turned down £50bn of investment for the UK and the chance to protect the jobs and industries that keep this country running.
Instead, they’ve chosen a path that will see 1,000 jobs continue to be lost every month, more energy imports and a contagion across supply chains and our industrial heartlands.”
Reeves: working people will pay ‘a bit more’ through income tax threshold freeze; OBR chief ‘mortified’ by leak – business live
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.It’s the morning after the budget, a time when the real story behind the fiscal event often emerges.And today, the Resolution Foundation is warning that the job of repairing the UK’s public finance is “far from complete”, and that major tax rises and cuts to public services are coming down the line.The think tank has issued its overnight analysis of Rachel Reeves’s budget, which shows that pre-election austerity and tax rises are both pencilled in.And while those back-loaded tax rises are large (bringing in £26bn), extra spending kicks in sooner, so UK debt is on track to be higher than forecast in March
New rules crack down on high risk loans as Australian property market heats up
A crackdown on risky lending will limit banks’ capacity to extend highly geared mortgages, as the financial regulator launches a pre-emptive strike against the growing excesses of an overheated property market.The Australian Prudential Regulation Authority announced a 20% cap on the share of new lending that banks can do at a debt-to-income ratio above six – a mortgage worth more than six times the borrower’s income.While Jim Chalmers said the move would “help with financial resilience and housing affordability”, the Greens immediately criticised it as insufficient and experts said it would not curb the current rapid rise in lending growth and property prices.Sign up: AU Breaking News emailThe newly announced restriction lands amid a worsening housing crisis, with a recent report highlighting affordability is now at its worst on record and that a typical household needs to dedicate nearly half of its pre-tax pay to service the average new mortgage.An explosion in lending to landlords has been of particular concern to regulators
Foreign interference or opportunistic grifting: why are so many pro-Trump X accounts based in Asia?
When X rolled out a new feature revealing the locations of popular accounts, the company was acting to boost transparency and clamp down on disinformation. The result, however, has been a circular firing squad of recriminations, as users turn on each other enraged by the revelation that dozens of popular “America first” and pro-Trump accounts originated overseas.The new feature was enabled over the weekend by X’s head of product, Nikita Bier, who called it the first step in “securing the integrity of the global town square.” Since then many high-engagement accounts that post incessantly about US politics have been “unmasked” by fellow users.An Ivanka Trump fan account that posts about illegal immigration to the US was shown to be based in Nigeria
London councils enact emergency plans after three hit by cyber-attack
Three London councils have reported a cyber-attack, prompting the rollout of emergency plans and the involvement of the National Crime Agency (NCA) as they investigate whether any data has been compromised.The Royal Borough of Kensington and Chelsea (RBKC), and Westminster city council, which share some IT infrastructure, said a number of systems had been affected across both authorities, including phone lines. The councils shut down several computerised systems as a precaution to limit further possible damage.The Information Commissioner’s Office (ICO) said the London Borough of Hammersmith and Fulham had also reported an attack. Together the three authorities provide services for more than half a million Londoners
Molly McCann: ‘I’m a scouse female gay athlete who supports Everton – it’s like my cards are marked already’
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Players warned not to sign IPL-style Hundred deals in standoff with owners
The Professional Cricketers’ Association (PCA) has advised players not to sign Hundred contracts for next season amid a dispute with the new franchise owners over their terms.In a supplementary process to the new IPL-style auction that will take place next year, Hundred teams are permitted to make four direct signings, including one from their existing squad and three others, either overseas players or a player with an England central contract.The direct-signing window opened last week, but the players’ union is understood to have told its members to hold off signing because of a standoff over the new multiyear contracts.The Guardian has learned that the new franchise owners – four of whom also own Indian Premier League teams – have included a unilateral 12-month release clause in the three-year deals they are offering to direct signings, which the PCA is contesting. Such contracts would offer no security to the players, as well as keeping them on the same salary for three years even if they enjoyed a stellar first season
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