Andy Burnham has used one of his first acts as Prime Minister to speak to Donald Trump, Downing Street has confirmed, as speculation mounts that Labour’s block on fresh North Sea oil and gas operations could be about to soften. For the thousands of UK firms in the offshore supply chain, the stakes are anything but abstract.
The US President appears to be taking a much closer interest in the new occupant of No 10 amid hints that Mr Burnham could reverse the party’s ban on new drilling.
Yesterday, the Mail on Sunday reported that the Prime Minister was preparing to announce plans for new drilling at the Jackdaw and Rosebank fields off the coast of Scotland, two projects where licences have already been granted but which have been mired in legal challenge.
Mr Trump greeted the reports with characteristic restraint. Writing on TruthSocial, he declared that the people of Aberdeen, the UK’s oil and gas capital, would be ‘dancing in the streets’, and claimed the move would make Britain ‘one of the richest countries anywhere in the world’.
It is quite the change of tune. The President previously dismissed Mr Burnham as an ‘extremely liberal’ politician he knew only as ‘the mayor of a town’.
Riches or otherwise, the commercial logic for Aberdeen is real. Oil and gas supports an estimated 13 per cent of jobs in Aberdeen City, according to ONS figures cited by the House of Commons Library, and behind every operator sits a long tail of small engineering firms, caterers, logistics providers and consultancies whose order books rise and fall with drilling activity.
That supply chain has spent two years absorbing punishment. When Rachel Reeves raised the energy profits levy to 78 per cent and stripped out investment allowances in 2024, industry leaders warned the sector was entering ‘game over’ territory, with analysts cautioning that companies would freeze investment and wind down older fields early. Any signal that Jackdaw and Rosebank can proceed would be the first meaningful reversal of that squeeze.
Caution is warranted, however. Labour’s deputy leader Lucy Powell declined to confirm the reports, telling the BBC she was not expecting a “change of policy” but “more a change of emphasis”. Because licences at both fields were granted some time ago, ministers could wave the projects through while leaving the wider ban on new exploration licences untouched.
For SME owners watching from well beyond Aberdeen, the episode is a useful early read on the new Prime Minister. Mr Burnham arrived in office with eight in ten SME owners braced for what his premiership would mean for their business, yet he has since signalled room for movement on tax and a business rates cut for high street firms. A pragmatic turn on the North Sea would suggest the interventionist of the campaign trail is governing rather closer to the centre.
There is also the small matter of Washington. A Prime Minister who has the President’s ear, even one won over by an oil field, is better placed to defend UK exporters in any future tariff skirmish than one dismissed as the mayor of a town.
Nothing is confirmed, and No 10 is saying little about what the two men discussed. But when a new Prime Minister’s first calls include the White House, and the White House is talking about British oil, business owners can be forgiven for concluding that the direction of travel has changed.
