Rishi Sunak’s pointless oil and gas bill is exposing Conservative divisions

The prime minister, and his electoral strategists, have concluded that the Conservatives’ Uxbridge by-election win was clear evidence that weaponising net zero was a pavement stone in the narrow path to election victory. One element of that was the announcement in the King’s Speech that the government would legislate to require there to be annual North Sea oil and gas licensing rounds – something that was already in the government’s power to decide to run. The aim was to force Labour to vote against – and then denounce them as eco-zealots, willing to expose the UK to the price and security vagaries of international energy markets and costing the UK jobs and tax revenue.

Unfortunately for the prime minister it has triggered the resignation of an MP – Chris Skidmore – who only a year ago was publishing a blueprint for the net zero transition commissioned by Sunak’s predecessor, and the opposition of Sir Alok Sharma, who presided over COP26. It has also served to further tarnish the UK’s already diminishing claims to moral authority on climate change.

The government has a case to make for favouring domestic production

Chancellor Jeremy Hunt has argued that the domestic production of oil and gas still has a lower carbon footprint than imported liquified natural gas (LNG). The UK taxpayer potentially also benefits from the proceeds of licenses and taxes on production – and better for the UK Exchequer to benefit than any number of dubious regimes in other major producer countries.

Moreover, Hunt could have argued that, given global availability of fossil fuels, the net zero transition will never be a consequence of lack of supply – somewhere substantial reserves will have to be left in the ground. It will be a consequence of large-scale policy-driven demand shifts. The chancellor could be equally worried that he is encouraging domestic investment in what may end up as devalued or stranded assets when the transition happens.

Nonetheless the signalling looks inconsistent with the need for transition. One of the battlegrounds at COP28 was on the relative merits of “phasing down” and “phasing out” fossil fuels in the teeth of opposition from producer countries. At successive COPs the UK has been in favour of phasing out. The government’s enthusiasm for UK licensing makes that look hypocritical.

There is no need for this legislation - it is performative politics

This bill is also bad government. Governments have discretion when to launch licensing rounds. One just concluded with no need for this bill. The bill’s sole point appears to be to force Labour’s hand and provide a slogan or a soundbite for the general election. If there were any legislative necessity filter before governments added to the statute book, this would get rejected. It is purely performative.

This is part of what appears to be this government’s worrying tendency to view parliament in its last year as a venue to lay out battle lines for the election and to make the task of governing after an election harder. In this case a government that did not want an annual licensing round would presumably need to waste a bit of legislative time and effort in repealing the bill – if it makes it through to the statute book and the government “commences” it. The knowledge that any incoming government might do that would also serve to undermine any impacts that it has before the election in increasing investor interest in the North Sea.

Before Christmas, Keir Starmer warned of a “scorched earth” approach to governing. This looks to be one example, but could also point to the approach that will be taken to tax cuts and public spending in the upcoming Budget or the decision to commit to raise the income threshold for foreigners to join their partners in the UK next year.

Sunak has provided a pretext for another Conservative departure

Rishi Sunak’s decision to press on with this bill has landed him with another unwelcome by-election. It is not clear why Chris Skidmore has decided to leave the Commons as soon as possible rather than simply vote against this bill and use his platform to try to keep the government honest on its net zero commitments. The fact that he has means Sunak faces another unwelcome by-election. 

Weaponising net zero has backfired pretty spectacularly. The government has been forced to delay the bill because parliament spent so much time yesterday debating more pressing matters. It would be better if the government decided to put this bill permanently in the bin.

Watch Chris Skidmore's keynote speech at the IfG's Net Zero Conference