North Sea oil and gas project approvals fell 81 per cent under Labour, report finds
A new report shows North Sea oil and gas project approvals fell by 81 per cent under the Labour government, prompting accusations that the party is deliberately choking off investment in the basin.
Investment in the UK North Sea has collapsed since Labour took office, with the number of new oil and gas projects approved falling by 81 per cent, according to a new industry report. The findings have prompted accusations that the government is deliberately choking off the basin's future, despite repeated assurances that it supports the sector during the energy transition.
The report, compiled by an industry body tracking offshore activity, found that only a handful of new projects have been given the green light since the general election, compared with a significantly higher number in the equivalent period under the previous Conservative administration. Industry leaders said the sharp decline reflects the impact of the government's policy agenda, including a windfall tax on profits and the removal of investment allowances, which have made the UK a less attractive destination for capital.
Executives warned that the collapse in approvals will have long-term consequences for domestic energy security, forcing Britain to rely more heavily on imported gas and oil. They also pointed to the potential loss of tens of thousands of skilled jobs in Scotland and north-east England, where the offshore industry supports a wide network of supply chain companies, from engineering firms to logistics providers.
The report's authors argue that the slowdown is not a natural market correction but the direct result of political decisions. They note that the government has signalled a clear preference for renewable energy and has introduced fiscal measures that disproportionately penalise hydrocarbon producers. The combination of a higher tax rate and uncertainty over future licensing rounds has led many operators to pause or cancel planned developments, the report says.
A spokesperson for the government defended the approach, saying the transition away from fossil fuels is essential to meet legally binding climate targets. The spokesperson insisted that the North Sea still has a role to play, but stressed that future projects must align with the country's net-zero ambitions. Ministers have previously said they will not issue new exploration licences, a policy that has drawn criticism from both industry and opposition politicians.
Critics, however, argue that the government is moving too fast and without a credible plan for the workers and communities that depend on the sector. They point to the experience of other countries, such as Norway, which have managed to maintain investment in oil and gas while also building substantial renewable capacity. The report echoes this view, suggesting that a more pragmatic approach would protect jobs and revenues while still allowing the UK to meet its climate obligations.
The 81 per cent figure is likely to intensify the political debate over energy policy in the coming months. With the next general election on the horizon, the opposition has already seized on the data to argue that Labour is pursuing an ideological agenda at the expense of the economy. For now, the industry is calling for urgent dialogue with the government to find a way forward that does not leave the North Sea basin stranded.
