UK's incoming PM Burnham plans new North Sea oil drilling

Andy Burnham will announce plans for new oil and gas drilling in the North Sea on Monday, his first day as British prime minister. The move marks a stark departure from the Labour Party's 2024 manifesto, which explicitly pledged to stop issuing new exploration licences.

The immediate focus of the new policy will be the Rosebank and Jackdaw fields in Scotland. Regulators had originally approved these projects in 2022 and 2023, but they were overturned in 2025 following a legal challenge under the previous Conservative government.

For European energy markets, the shift highlights the growing tension between climate targets and energy security as the conflict with Iran continues to elevate prices. Outgoing premier Keir Starmer had argued that new licences would not lower consumer bills, but his stance drew heavy criticism from the US and domestic opposition.

US President Donald Trump had repeatedly called to "open North Sea oil", recently stating on social media that Starmer had "failed badly" on energy policy. At home, the Conservatives and Reform UK argued it was "reckless" to ignore domestic resources during an international price shock.

The policy reversal exposes a deep divide within the Labour Party that investors will watch closely. Some MPs warned that a rapid transition away from fossil fuels risks jobs and household bills, while others, including likely senior cabinet minister Ed Miliband, labelled the Rosebank licence "climate vandalism".

Burnham's decision follows direct pressure from the oil and gas sector and trade unions. In a letter this week, they urged the incoming leader to "back North Sea oil and gas", arguing it is "a signal that the country remains committed to producing, building and manufacturing."

The drilling announcement is part of a broader economic agenda that will also see the new prime minister push to take water and energy companies under public control. He also intends to launch a new council house-building programme and measures to give "people breathing space on the cost of living".

Burnham emerged as the sole leadership candidate after securing the backing of 379 Labour MPs and all 11 affiliated trade unions. He is currently finalising his cabinet, with Ed Miliband and Shabana Mahmood rumoured to be in line to replace Rachel Reeves as chancellor.

The former mayor of Greater Manchester promised a "dynamic start... focused on delivering tangible change to people's lives as soon as possible". He warned that announcing his top team early "would, I think, cause complete chaos if you start half a reshuffle before you're in the position."