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Oil and gas licences plan may ‘not necessarily’ bring down bills, says Coutinho

Government plans to mandate oil and gas licensing in the North Sea may not bring down household energy bills, the Energy Secretary has admitted.

Labour called it a “stunning admission”, after Claire Coutinho said that a legislative plan – due to be announced in the King’s Speech on Tuesday – may not have any impact on those struggling with current energy costs.

The planned legislation will require the North Sea Transition Authority (NSTA) to invite applications for new production licences on an annual basis, which ministers have pitched as necessary to “safeguard the prosperity of our country”.

The Government has claimed the move will provide job security for 200,000 workers, but the Opposition claimed it would simply “hand billions of taxpayer subsidies” to oil and gas giants.

Oil Rig art installation
New licences to extract oil and gas in the North Sea have been criticised by climate campaigners (Ben Birchall/PA)

A previous decision to approve 100 new licences for oil and gas exploration in the North Sea sparked concern and criticism among climate campaigners, with the latest legislative move designed to create a dividing line between the Tories and Labour.

Sir Keir Starmer’s party has committed to not allowing any more exploration licences in oil and gas, with plans instead to ramp up green energy plans.

“It wouldn’t necessarily bring energy bills down, that’s not what we’re saying,” Ms Coutinho told BBC Breakfast.

“But it would, as I say, raise a significant amount of money that would help us, for example, fund public services, also fund transition into different forms of energy, for example, things like offshore wind and solar energy which more broadly and indirectly could help bring bills down.”

Labour’s Ed Miliband attacked the Government over her comments.

“It is a stunning admission from this Government that, during the worst energy bills crisis in generations, their flagship King’s Speech energy policy won’t even take a penny off energy bills.

“The Conservatives are so out of touch that they have given up trying to bring down energy bills for British families.

“Instead, they will hand billions of taxpayer subsidies to the oil and gas companies making record profits, undermine our energy security and contribute to climate disaster,” the shadow climate secretary said.

First Minister’s Questions
Scotland’s First Minister Humza Yousaf said the new oil and gas licences ‘fly in the face’ of the country’s climate obligations (Andrew Milligan/PA)

Scottish First Minister Humza Yousaf told journalists during a visit to Dundee that the new licences “fly in the face” of the country’s climate obligations.

“I haven’t seen the detail of their announcement, but what I would say is, from the previous announcements around supporting, for example, 100 new oil and gas licences, to me that flies in the face of our climate obligations as a country,” he said.

“We have an existential climate crisis right here, that the entire world is facing.

“We absolutely support the oil and gas industry, we support the jobs.

“We want to accelerate as quickly as we possibly can to that just transition.

“What the UK Government has announced over the past few weeks and months will only slow down that just transition, which won’t help the UK and certainly won’t help the planet.”

The UK Government has said that the move will improve energy security, a key focus for the Government since the Russian invasion of Ukraine.

Under the plans, each annual licensing round will only take place if key tests are met that support the transition to net zero, including that the UK must be projected to import more oil and gas from other countries than it produces at home, and that carbon emissions associated with the production of UK gas are lower than the equivalent emissions from imported liquefied natural gas.

If both tests are met, the NSTA will be required to invite applications for new licences annually.