Rosebank tests Burnham’s new energy settlement

When Prime Minister Andy Burnham spoke about taking a more “pragmatic” approach to energy, the obvious question was what that would mean in practice. The Chancellor’s first Budget has begun to provide an answer.

Energy was one of its central themes. Healey promised a £100 payment for 20 million households this winter, extended changes designed to reduce electricity costs and committed to ending gas standing charges. The government is also pushing ahead with support for low-carbon home upgrades and a £2bn Energy Wealth Fund.

On the face of it, this remains firmly within Labour’s existing green energy agenda. Burnham has inherited Clean Power 2030 and a programme designed to reduce the UK’s exposure to volatile international fossil fuel markets. Nothing in the Budget suggests he intends to abandon that direction.

But look towards the North Sea and the picture becomes more complicated.

Rosebank has quickly emerged as the first major test of Burnham’s pragmatism. Treasury forecasts reportedly assume the oilfield will be approved, with Healey and Business Secretary Jonathan Reynolds understood to support the development because of its potential contribution to jobs and tax revenues. Burnham has also been reported as supportive. 

That matters because the argument is no longer simply about whether Labour supports clean energy or fossil fuels. The new dividing line is over how much room oil and gas should retain while the transition takes place.

For Burnham and Healey, the emerging answer appears to be more than some in Labour would like. Healey is trying to use government intervention to reduce household energy costs while maintaining investment in renewables. At the same time, the Treasury sees continued economic value in domestic oil and gas. Rosebank brings those two positions together.

Others in Labour are pulling in the opposite direction. Energy Secretary Miatta Fahnbulleh is understood to be leaning towards rejecting Rosebank on environmental grounds. Labour MPs have begun applying pressure too, with Catherine Fookes warning that approving Rosebank would “blow a hole in our green credentials”.  

The labour movement adds another complication. Unite and the GMB have urged ministers to approve Rosebank to protect jobs, putting Burnham between those who see North Sea production as essential to industrial communities and those worried that approval would undermine Labour’s climate commitments. 

That split appears to reach the membership. Survation polling for LabourList found 89% of Labour members backed Healey’s Budget overall. Yet on Rosebank, the party was almost evenly divided, with 43% supporting approval and 41% opposed. 

This is where Burnham’s energy agenda becomes interesting. His government is not turning away from clean power. The Budget puts significant money behind lower bills, low-carbon technologies and renewable investment. But neither does Burnham appear willing to let the transition close down arguments around jobs and domestic production.

That balancing act is likely to face scrutiny on the international stage when Burnham travels to Antalya, Turkey, for COP31 next month. He has pledged that his government will “meet the climate challenge”, meaning the approach it takes to Rosebank could provide an important domestic test of that commitment ahead of the UN climate summit.

Rosebank will therefore mean more than the future of one oilfield. It will provide a real indication of where Burnham draws the line between maintaining Labour’s green ambitions and delivering the pragmatism he promised.

The Budget has started to redraw that line. Rosebank could determine where it ends.