The arrival of Andy Burnham in Downing Street – and the movement of Ed Miliband to the Foreign Office – has prompted cautious optimism across Britain’s offshore energy sector.
But while the mood music has undoubtedly changed, what matters now is whether the policy follows.
From what we have heard so far, this looks more like a change of tone than a change of direction.
That is not necessarily a bad thing, but businesses making multi-billion-pound investment decisions need more than warm words.
They need certainty. We’re expecting to hear more from the new Prime Minister this week and those details will matter.
Recent briefings from Mr Burnham’s team suggest they want to accelerate consent decisions for existing North Sea developments.
That is welcome. But it is important to recognise that this is not, in itself, a policy shift.
Labour has always distinguished between new exploration licences and projects within existing licensed fields.
Developments such as Jackdaw and Rosebank already hold licences.
The hurdle they face is securing environmental consent, not permission to drill in entirely new areas.
That distinction matters because Britain still possesses enormous domestic resources.
Around three billion barrels sit within proven reserves, with a further four billion barrels identified as contingent resources that could be developed.
The opportunity is there. The challenge is turning those resources into production, investment, tax revenues and skilled jobs.
Doing that requires a regulatory system capable of approving projects efficiently. Faster consenting would certainly help.
But it is only one half of the equation. The other, arguably more important, piece is the fiscal regime.
For several years, the Energy Profits Levy has created uncertainty that has delayed investment and accelerated job losses across the UK’s energy communities.
Industry and government have already done the hard work of designing its replacement: the Oil and Gas Revenue Levy.
This would retain a permanent windfall mechanism, but one that only applies when genuine windfall conditions exist, rather than acting as a long-term disincentive to investment.
The legislation is already making its way through Parliament, but it is not scheduled to replace the current regime until 2030. That timetable no longer reflects economic reality.
If Andy Burnham is serious about backing British industry, protecting skilled employment and maximising the value of the UK’s own energy resources, then bringing forward that transition would send the strongest possible signal.
Changing the atmosphere is easy. Changing investment decisions requires changing the fundamentals.
Accelerating the move to the new tax regime is the lever that can unlock growth, safeguard jobs and ensure the North Sea continues to make a meaningful contribution to Britain’s economy for years to come.
