Donald Trump lights fire under Ed Miliband – Starmer has huge decision | Personal Finance | Finance
If we ever needed a reminder of the importance of having a secure supply of affordable energy, this is it. The Middle East is in uproar again. As the US blitzes Iran, the Ayatollahs are fighting back by trying to blow up the world energy supply. Their drones have knocked out half of Qatar’s liquefied natural gas exports and oil tankers daren’t navigate the crucial Strait of Hormuz supply route. This is sending our already sky-high energy prices through the roof.
The cost of a barrel of Brent crude has soared from $70 last week to $84 today. UK gas prices have more than doubled to 147p per therm. JP Morgan is warning of a “catastrophic” energy supply loss if the war drags on for a few weeks, which it easily could. It’s yet more evidence, if any were needed, that fossil fuels remain at the heart of the global economy. Any threat to their supply triggers panic.
So what has our own energy secretary Ed Miliband done? Banned all new oil and gas exploration in the North Sea. Anything we do produce is hammered by windfall taxes that take 78% of profits, the most punitive in the world. The result is inevitable. UK drillers are giving up.
While sane, sensible democracies like Denmark and Norway press ahead with exploration, we’re waving the white flag. Something this Labour government seems rather good at right now. Donald Trump is furious about it.
Yesterday, Trump made his position clear. As European wholesale gas prices rocket, he urged Sir Keir Starmer to restart North Sea drilling “immediately”. Asked what advice he would give the PM, he raged: “Open up the North Sea. Immediately. Your energy prices are through the roof.”
That’s like putting a loaded gun to Miliband’s head, because he’s the one steadily closing down the North Sea. He banned new oil and gas licences and imposed effective marginal tax rates of more than 100% on some companies. That’s a hefty tax rate, even Rachel Reeves hasn’t gone that far. Yet.
As shadow energy secretary Claire Coutinho has pointed out, Miliband is destroying 1,000 jobs a month, squandering £50billion of investment and making the UK less energy secure. Under Labour, not a single exploration well was drilled in British waters last year, for the first time since 1964.
By contrast, Norway, which shares the same basin, drilled 49 exploration wells and made 21 new discoveries. Miliband was already destroying jobs and making Britain poorer and weaker. And that was before this war threatened chaos.
Miliband says generating our own supply of wind and solar will boost UK energy security. Yet that leaves us dependent on dodgy Chinese tech. And we still need good old-fashioned fossil fuels, as 27million British homes rely on gas boilers while 30million vehicles run on petrol and diesel.
Shutting down our own production does nothing for the planet because we simply buy oil and gas from elsewhere. That means higher emissions and prices, and lower profits and tax revenues. It’s yet more Labour economic illiteracy.
As Coutinho points out, every molecule of North Sea gas we produce goes into British pipes. Oil can be sold on the international market. North Sea drillers make a profit once the oil price hits $40 a barrel. Today, it’s more than double that. And the higher it goes, the more jobs, tax and revenues we lose.
This was madness before. Today, we’re in the middle of a vicious shooting war. Miliband must change course, or Starmer must boot him out.
