Cabinet war rages over Rosebank as Chancellor’s Budget ‘assumes North Sea oil scheme will be approved’
The Budget’s economic forecasts are reported to assume that the Rosebank oilfield will be approved and generate tax revenue, even though Energy Secretary Miatta Fahnbulleh has not yet decided its future. The issue risks deepening Cabinet tensions because Fahnbulleh says the decision is hers alone, while Chancellor John Healey and Prime Minister Andy Burnham are described as supportive of North Sea drilling.
Healey plans to set out how North Sea oil and gas tax revenues would help fund a £2 billion energy wealth fund for renewable and low-carbon projects. The North Sea Transition Authority’s revenue estimates, used by the Office for Budget Responsibility, reportedly include some unapproved projects. Fahnbulleh has cited the legal sensitivity of the decision and the need for a proper process; Conservatives are calling for Rosebank’s approval, new licences and the removal of the energy profits levy.
In short
- Budget forecasts reportedly count on Rosebank being approved.
- Energy Secretary Miatta Fahnbulleh says the decision is hers alone.
- A planned £2 billion fund would back low-carbon projects.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Approving Rosebank could bring tax revenue and support jobs, investment and energy supply while the UK continues developing renewables. If North Sea revenues help fund the £2 billion energy wealth fund, supporters can argue that using them for low-carbon projects is a pragmatic way to finance the transition and manage its costs.
The case against
Rosebank’s approval should depend on a lawful, evidence-based process that weighs climate commitments and environmental effects, rather than on revenue assumptions or political pressure. Critics may also question whether relying on an unapproved oilfield makes Budget forecasts less robust and risks prolonging fossil fuel dependence when investment could instead focus on clean energy.
Explained simply
Rosebank is a large undeveloped oil and gas field west of Shetland, in the UK’s North Sea. It would need government approval before production could begin, and the decision sits with the Energy Secretary under the government’s process for considering new projects.
The Chancellor sets out the government’s tax and spending plans, while the independent Office for Budget Responsibility forecasts their likely effect on the economy and public finances. North Sea oil and gas taxes are also affected by the energy profits levy, a temporary tax on energy companies’ profits; the government says some revenues would support a fund for renewable and low-carbon projects.
The decision matters because forecasts that count revenue from a proposed field can affect estimates of future public finances, even before approval is settled. It also touches on how the UK balances potential tax income and energy production with its plans for lower-carbon power.