LONDON — The U.K.’s Energy Secretary Ed Miliband hit back at Donald Trump’s Davos jibe that offshore wind is for “losers,” telling a European energy summit that wind turbines are “for winners.” Speaking in Hamburg, Germany, at a meeting focused on boosting Europe’s offshore wind capacity, Miliband said it was “important to be diplomatic,” when asked for his response to Trump’s remarks. But, he added: “For us in the U.K., offshore wind is absolutely critical for our energy security. This is a hard-headed, not a soft-hearted, view that we have. We think it’s the right thing for the climate crisis but we think it’s absolutely the right thing for energy security. “I think offshore wind is for winners.” At the World Economic Forum in Davos last week, Trump reiterated his deep-seated loathing for wind energy, saying: “There are windmills all over Europe. … They are losers.” Trump also claimed, falsely, that China, despite making most of the world’s wind turbines, don’t use them and only “sell them to the stupid people that buy them.” China has by far the world’s largest wind power generation capacity. Energy ministers from the U.K., Belgium, Denmark, France, Germany, Iceland, Luxembourg and the Netherlands signed a deal Monday at the third North Sea Summit to deliver 100 gigawatts of joint offshore wind projects. Miliband said that there was still “common ground” to be found with the Trump administration on energy, including around the development of new nuclear technology. But he added: “Different countries will pursue their own national interests. But we are very clear about where our national interest lies.” Frederike Holewik contributed reporting from Hamburg.

Ed Miliband is the U.K. energy secretary and Dan Jørgensen is the EU commissioner for energy. The world has entered an era of greater uncertainty and instability than at any other point in either of our lifetimes, and energy is now central to this volatile age we find ourselves in. In recent years, both Britain and Europe have paid a heavy price for our exposure to the roller coaster of international fossil fuel markets. Russia’s illegal invasion of Ukraine in 2022 sent global gas prices soaring — driving up bills for families and businesses across the continent and leading to the worst cost-of-living crisis our countries have faced in a generation. Even as Europe rapidly cut its dependence on Russian gas and is now swiftly moving toward a complete phaseout, exposure to fossil fuels remains the Achilles’ heel of our energy systems. The reality is that relying so heavily on fossil fuels — whether from Russia or elsewhere — can’t give us the energy security and prosperity we need. It leaves us incredibly vulnerable to international market volatility and pressure from external actors. Like European Commission President Ursula von der Leyen said: “As our energy dependency on fossil fuels goes down, our energy security goes up.” This is why Britain and the EU are committed to building Europe’s resources of homegrown clean power, looking to increase our energy security, create well-paid jobs, bring down bills and boost our industrial competitiveness, all while tackling the climate crisis to protect future generations. Today, nine European countries, alongside representatives from NATO and the European Commission, are meeting in Hamburg for the third North Sea Summit to act on this shared understanding. Together, we can seize the North Sea’s vast potential as a clean energy powerhouse — harness its natural resources, skilled workforce and highly developed energy industries to lead the world in offshore wind, hydrogen and carbon capture technologies.   Three years ago in Ostend, our countries united behind a pioneering goal to deliver 300 gigawatts of offshore wind in the North Sea by 2050. Today in Hamburg, we will double down on those commitments and pledge to jointly deliver shared offshore wind projects. With around $360 billion invested in clean energy in the EU just last year, and wind and solar overtaking fossil-fuel-generated power for the first time, this is an historic pact that builds on the clean power momentum we’re seeing all across Europe. And this unprecedented fleet of projects will harness the abundant energy waiting right on our doorstep, so that we can deliver cheap and secure power to homes and businesses, cut infrastructure costs and meet rising electricity demand. Everything we’re seeing points to a clean energy economy that is booming. Indeed, earlier this month Britain held the most successful offshore wind auction in European history, delivering enough clean energy to power 12 million homes — a significant vote of confidence in Britain and Europe’s drive to regain control of our energy supplies. We believe there is huge value in working together, with our neighbors and allies, to build this future — a future that delivers on shared energy infrastructure, builds strong and resilient supply chains, and includes talks on the U.K.’s participation in the European electricity market. Strengthening such partnerships can help unlock investment, reduce our collective exposure to fossil fuels and bring down energy costs for our citizens. This speaks to a wider truth: An uncertain age makes cooperating on the basis of our shared interests and values more important — not less. By accelerating our drive to clean energy, today’s summit will be fundamental in delivering the energy security and prosperity Europe desperately needs.

LONDON — British students will once again be able to take part in the EU’s Erasmus+ exchange scheme from January 2027 — following a six-year hiatus due to Brexit. U.K. ministers say they have secured a 30 percent discount on payments to re-enter the program that strikes “a fair balance between our contribution and the benefits” it offers. The move is one of the first tangible changes out of Keir Starmer’s EU “reset,” which is designed to smooth the harder edges off Boris Johnson’s Brexit settlement while staying outside the bloc’s orbit. In an announcement on Wednesday Brussels and London also confirmed they were formally beginning negotiations on U.K. re-entry into the EU’s internal market for electricity. Both sides hope the move, which was called for by industry in both sides of the Channel, will cut energy bills while also making it easier to invest in North Sea green energy projects — which have been plagued by Brexit complications. They also pledged to finish ongoing talks on linking the U.K. and EU carbon trading systems, as well as a new food and drink (SPS) deal, by the time they meet for an EU-U.K. summit in 2026. The planned meeting, which will take place in Brussels, does not yet have a date but is expected around the same time as this year’s May gathering in London. The announcements give more forward momentum to the “reset,” which faltered earlier this month after failing to reach an agreement on British membership of an EU defense industry financing program, SAFE. The two sides could not agree on the appropriate level of U.K. financial contribution. The pledge to finalize carbon trading (ETS) linkage next year is significant because it will help British businesses avoid a new EU carbon border tax — CBAM — which starts from Jan. 1 2026. While the tax, which charges firms for the greenhouse gas emissions in their products, begins on Jan. 1, payments are not due until 2027, by which time the U.K. is expected to be exempt. But it is not yet clear whether British firms will have to make back payments on previous imports once the deal is secured, and there is no sign of any deal to bridge the gap. WIDENING HORIZONS EU Relations Minister Nick Thomas-Symonds, who negotiated the agreement, said the move was “a huge win for our young people” and would break down barriers and widen horizons so that “everyone, from every background, has the opportunity to study and train abroad.” European Parliament President Roberta Metsola welcomes British Minister for the Constitution and European Union Relations Nick Thomas-Symonds. | Ronald Wittek/EPA “This is about more than just travel: it’s about future skills, academic success, and giving the next generation access to the best possible opportunities,” he said. “Today’s agreements prove that our new partnership with the EU is working. We have focused on the public’s priorities and secured a deal that puts opportunity first.” The expected cost of the U.K.’s membership of the Erasmus+ program in 2027 will be £570 million. Skills Minister Jacqui Smith said Erasmus+ membership is “about breaking down barriers to opportunity, giving learners the chance to build skills, confidence and international experience that employers value.” Liberal Democrat Universities Spokesperson Ian Sollom also welcomed U.K. re-entry into the exchange scheme but said it should be a “first step” in a closer relationship with the EU. “This is a moment of real opportunity and a clear step towards repairing the disastrous Conservative Brexit deal,” he said. “However while this is a welcome breakthrough, it must be viewed as a crucial first step on a clear roadmap to a closer relationship with Europe. Starting with negotiating a bespoke UK-EU customs union, and committing to a youth mobility scheme for benefit of the next generation.”

LONDON — The wait is finally over. After weeks of briefings, speculation, and U-turns, Chancellor Rachel Reeves has set out her final tax and spending plans for the year ahead. As expected, there is plenty for policy wonks to chew over. To make your lives easier, we’ve digested the headline budget announcements on energy, financial services, tech, and trade, and dug deep into the documents for things you might have missed.  ENERGY  The government really wants to bring down bills: Rachel Reeves promised it would be a cost-of-living budget, and surprised no one with a big pledge on families’ sky-high energy bills. She unveiled reforms which, the Treasury claims, will cut bills by £150 a year — by scrapping one green scheme currently paid for through bills (the Energy Company Obligation) and moving most of another into general taxation (the Renewables Obligation). The problem is, the changes will kick in next year at the same time bills are set to rise anyway. So will voters actually notice? The North Sea hasn’t escaped its taxes: Fossil fuel lobbyists were desperate to see a cut in the so-called Windfall Tax, which, oil and gas firms say, limits investment and jobs in the North Sea. But Rachel Reeves ultimately decided to keep the tax in place until 2030 (even if North Sea firms did get a sop through rules announced today, which will allow them to explore for new oil and gas in areas linked to existing, licensed sites.) Fossil fuel lobbyists, Offshore Energies UK, were very unimpressed. “The government was warned of the dangers of inaction. They must now own the consequences and reconsider,” it said. FINANCIAL SERVICES Pension tax changes won’t arrive for some time: The widely expected cut in tax breaks for pension salary sacrifice is set to go ahead, but it will be implemented far later than thought. The thresholds for exemption from national insurance taxes on salary sacrifice contributions will be lowered from £60,000 to £2,000 in April 2029, likely to improve forecasts for deficit cuts in the later years of the OBR’s forecasts. The OBR has a markets warning: The U.K.’s fiscal watchdog warned that the price-to-earnings ratio among U.S. equities is reminiscent of the dotcom bubble and post-pandemic rally in 2021, which were both followed by significant market crashes. The OBR estimated a global stock market collapse could cause a £121 billion hike in U.K. government debt by 2030 and slash U.K. growth by 0.6 percent in 2027-28. Even if the U.K. managed to stay isolated from the equity collapse, the OBR reckons the government would still incur £61 billion in Public Sector Net Financial Liabilities. Banks back British investments: British banks and investment houses have signed an agreement with the Treasury to create “invest in Britain” hubs to boost retail investment in U.K. stocks, a plan revealed by POLITICO last week. Reeves also finally tabled a cut to the tax-free cash ISA allowance: £12,000 from spring 2027 (the amount and timings also revealed by POLITICO last week), down from £20,000, with £8,000 slated for investments only. Over-65s will keep the full tax-free subscription amount. Also hidden in the documents was an upcoming consultation to replace the lifetime ISA with a “new, simpler ISA product to support first-time buyers to buy a home.” No bank tax: Banks managed to dodge a hike in their taxes this time, despite calls from the IPPR for a windfall-style tax that could have raised £8 billion. The suggestions (which also came from inside the Labour Party) were met with an intense lobbying effort from the banks, both publicly and privately. By the eve of the budget, City figures told POLITICO they were confident taxes wouldn’t be raised, citing the high rate of tax they already pay and Reeves’ commitment to pushing for growth through the financial services industry. TECH ‘Start, scale, stay’ is the new mantra:  Startup founders and investors were in panic mode ahead of the budget over rumored plans for an “exit tax” on wealthy individuals moving abroad, but instead were handed several wins on Wednesday, with Reeves saying her aim was to “make Britain the best place in the world to start up, to scale up and to stay.” She announced an increase in limits for the Enterprise Manage Scheme, which incentivizes granting employees share options, and an increase to Venture Capital Trust (VCT) and Enterprise Investment Scheme (EIS) thresholds to facilitate investment in growing startups. A further call for evidence will also consider “how our tax system can better back entrepreneurs,” Reeves announced. The government will also consider banning non-compete clauses — another long-standing request from startups. Big Tech will still have to cough up: A long-standing commitment to review a Digital Services Tax on tech giants was quietly published alongside the budget, confirming it will remain in place despite pressure from the Trump administration. The government will ‘Buy British’ on AI: Most of the government’s AI announcements came ahead of the budget — including plans for two new “AI Growth Zones” in Wales, an expansion of publicly owned compute infrastructure — meaning the only new announcements on the day were a relatively minor “digital adoption package” and a commitment to overhaul procurement processes to benefit innovative tech firms. But the real point of interest on AI came in the OBR’s productivity forecasts, which said that despite the furor over AI, the technology’s impacts on productivity would be smaller than previous waves of technology, providing just a 0.2 percentage point boost by 2030. The government insists digital ID will ultimately lead to cost savings. | Andrea Domeniconi/Getty Images OBR delivers a blow to digital ID: The OBR threw up another curveball, estimating the cost of the government’s digital ID scheme at a whopping £1.8 billion over the next three years and calling out the government for making “no explicit provision” for the expense. The government insists digital ID will ultimately lead to cost savings — but “no specific savings have yet been identified,” the OBR added. TRADE  Shein and Temu face new fees: In a move targeted at online retailers like Shein and Temu, the government launched a consultation on scrapping the de minimis customs loophole, which exempts shipments worth less than £135 from import duties. These changes will take effect from March 2029 “at the latest,” according to a consultation document. Businesses are being consulted on how the tariff should be applied, what data to collect, whether to apply an additional administration fee, as well as potential changes to VAT collection. Reeves said the plans would “support a level-playing field in retail” by stopping online firms from “undercutting our High Street businesses.”  Northern Irish traders get extra support: Also confirmed in the budget is £16.6 million over three years to create a “one-stop shop” support service to help firms in Northern Ireland navigate post-Brexit trading rules. The government said the funding would “unlock opportunities” for trading across the U.K. internal market and encourage Northern Ireland to take advantage of access to EU markets.  There’s a big question mark over drug spending: Conspicuously absent was any mention of NHS drug spending, despite U.K. proposals to raise the cost-effectiveness threshold for new drugs by 25 percent as part of trade negotiations with the U.S., suggesting a deal has not yet been finalized. The lack of funding was noted as a potential risk to health spending in the Office for Budget Responsibility’s Economic and Fiscal Outlook, which was leaked ahead of the budget. 

LONDON — Ministers must act now to address an “emerging risk to gas supply security,” the government’s official independent energy advisers have warned.  The government must make plans to avert a threat to future gas supplies, the National Energy System Operator (NESO) said.  While the advisers say the conditions creating a gas supply crisis are unlikely, any shortage would have a severe impact on the country. In its first annual assessment of Britain’s gas security, expected to be released later today but seen by POLITICO, the NESO said diminishing reserves of gas in the North Sea and competition for imports are creating new energy security risks, even as the country’s decarbonization push reduces overall demand for the fossil fuel.  Britain is projected to have sufficient gas supplies for normal weather scenarios by winter 2030/31, but in the event of severe cold weather and an outage affecting key infrastructure, supply would fall well short of demand, NESO projects.   The scenario in the report involves what the NESO calls the “unlikely event” of a one-in-20-year cold spell lasting 11 days alongside the loss of vital infrastructure.   If this were to occur, the consequences of a shortfall in gas supply could be dire.   It could trigger emergency measures including cutting off gas from factories, power stations, and — in extreme scenarios — homes as well. It could take weeks or months to return the country to normal.   The vast majority of homes still use gas boilers for heating.   VULNERABILITY Informed by the NESO’s findings, ministers have published a consultation setting out a range of options for shoring up gas security.  It comes amid growing concern in Whitehall about the U.K.’s vulnerability to gas supply disruptions. Russia is actively mapping key offshore infrastructure like gas pipelines and ministers have warned it has the capability to “damage or destroy infrastructure in deepwater,” in the event that tensions over Ukraine spill over into a wider European conflict.  While Britain has long enjoyed a secure flow of domestically-produced gas from the North Sea — which still supplies more than a third of the fuel — NESO’s report says gas fields are experiencing “rapid decline.” The amount available to meet demand in Britain falls to “12 to 13 percent winter-on-winter until 2035,” it says.  That will leave the U.K. ever more dependent on imports, via pipeline from Norway and increasingly via ship-borne liquefied natural gas (LNG) from the U.S. — and Britain will be competing with other countries for the supply of both.  The report projects that during peak demand periods in the 2030s, the Britain’s import dependency will be as high as 90 percent or more.  Overall, gas demand will be lower in the 2030s because of the shift to renewable electricity and electric heating, but demand will remain relatively high on very cold days, and when there is little wind to power offshore turbines, requiring gas power stations to be deployed, the report says.  “This presents emerging risks that we will need to understand to ensure reliable supplies are maintained for consumers,” it adds.  Reducing demand for gas by decarbonizing will be key, the report says, and risks are higher in scenarios where the country slows down its shift away from gas.   But decarbonization alone will not be enough to ensure the U.K. would meet the so-called “N-1 test” — a sufficient supply of gas even if the “single largest piece” of gas infrastructure fails — during a prolonged cold spell in winter 2030/31. In that scenario, “peak day demand” is projected to reach 461 million cubic meters (mcm), but supply would fall to 385 mcm, resulting in a supply deficit of 76 mcm, a shortfall of around 16 percent of what is needed to power the country on that day.  That means ministers should start considering alternative options now, including the construction of new infrastructure like storage facilities, liquefied natural gas (LNG) import terminals, or new onshore pipelines to ensure more gas can get from LNG import sites to the rest of the country. The government consultation will look at these and other options.   The critical piece of gas infrastructure considered under the N-1 test is not identified for security reasons, but is likely to be a major import pipeline from Norway or an LNG terminal. The report says that even “smaller losses … elsewhere in the gas supply system” could threaten gas security in extreme cold weather.  GAS SECURITY ‘PARAMOUNT’  The findings will likely be seized on by the oil and gas industry to argue for a more liberal licensing and tax regime in the North Sea, on a day when the government announced its backing for more fossil fuel production in areas already licensed for exploration.  But such measures are unlikely to be a silver bullet. The report says: “Exploration of new fields is unlikely to deliver material new capacity within the required period.”  Deborah Petterson, NESO’s director of resilience and emergency management, said that gas supply would be “sufficient to meet demand under normal weather conditions.”  “We have, however, identified an emerging risk to gas supply security where decarbonization is slowest or in the unlikely event of the loss of the single largest piece of gas infrastructure on the system.  “By conducting this analysis, we are able to identify emerging risks early and, crucially, in time for mitigations to be put in place,” she added.  A spokesperson for the Department of Energy Security and Net Zero said ministers were “working with industry to ensure the gas system is fit for the future, including maintaining security of supply — which is paramount.”   “Gas will continue to play a key role in our energy system as we transition to clean, more secure, homegrown energy,” they added. “This report sets out clearly that decarbonization is the best route to energy security — helping us reduce demand for gas while getting us off the rollercoaster of volatile fossil fuel markets.”  Glenn Bryn-Jacobsen, director of energy resilience and systems at gas network operator National Gas Transmission, said in the short-term, Britain’s gas supply outlook was “robust” but that “looking ahead, we recognise the potential longer-term challenges.” “Gas remains a critical component of Britain’s energy security — keeping homes warm, powering industry, and supporting electricity generation during periods of peak demand and low renewable output,” he added. “In considering potential solutions, it is essential to look at both the gas supply landscape and the investment required in network infrastructure,” he said. 

LONDON — U.K. Energy Secretary Ed Miliband was on the world stage last week demanding high-polluting fossil fuels are phased out of global energy systems.  “This is an issue that cannot be ignored,” he told the COP climate summit in Brazil.  Yet this week could see his own government water down commitments to phase out fossil fuels. Insiders say a drawn-out fight over the future of drilling in the U.K.’s Scottish oil and gas heartlands is finally reaching its conclusion.  It is a row which has split the governing Labour Party, pitted Miliband against the all-powerful Treasury, and will, some of Labour’s own MPs fear, undermine the government’s climate credentials and expose the party to even more political pain.  “If a progressive government with a big majority, in the country that started the Industrial Revolution, can’t hold firm on new fossil fuel drilling,” worried one Labour MP, “how can we expect developing countries to do what’s needed to tackle climate change?”  The MP, along with other officials and experts in this piece, was granted anonymity to give a frank view on sensitive political planning.  The decisions follow months of full-throated lobbying by fossil fuel companies, who argue tough action against high-polluting oil and gas firms will hit jobs and derail the wider economy — but also by green campaigners, desperate to hold Labour to its promises to make the U.K. a global climate leader.  And there is a growing risk for ministers that, as the government searches for a compromise to satisfy the party and balance fiscal demands with net-zero ambitions, it will land on a solution which pleases no one at all.  LICENSES, TAXES, ELECTIONS Two government figures and three figures from industry told POLITICO they expect minsters to announce a decision on North Sea licenses on Wednesday, to coincide with the Budget.  Labour swept to power last year on a promise to ban new oil and gas exploration licenses in the declining basin, as well as maintaining taxes on high polluters in the North Sea.  But there is likely to be a “pragmatic” shift on North Sea policy, one of the government figures said. Officials are looking at allowing oil and exploration on existing fields (so-called “tiebacks”) and potentially loosening rules on investment relief, they said.  Fossil fuel lobbyists argue that, without this sort of help, thousands of jobs and billions in investment are at risk.  “There is a sense that the industry are not crying wolf this time,” the same government figure said.  The tax is currently set to remain until 2030, but Chancellor Rachel Reeves is considering scrapping it earlier, in a bid to drive the U.K.’s stalling economy. | Pool photo by Leon Neal via Getty Images They added that ministers will likely be making decisions with Scottish elections in May firmly in mind — conscious that the future of the oil and gas sector is a priority for many Scottish voters already worried about the decline of the North Sea economy, embodied in the closure of Grangemouth refinery.  Approving tiebacks would allow Miliband to say he has stuck to his election pledge while still expanding opportunities for oil and gas producers.  The Treasury is also due to decide the future of the Windfall Tax on oil and gas companies before the end of the year — a levy on profits hated by the industry but used to fund Miliband’s rush to move the U.K. to a cleaner energy system.   The tax is currently set to remain until 2030, but Chancellor Rachel Reeves is considering scrapping it earlier, in a bid to drive the U.K.’s stalling economy.  Lobby group Offshore Energies UK (OEUK) claims the country could enjoy a £40 billion economic boost if the Windfall Tax was ditched as soon as next year.   A fourth industry figure said a decision on whether to approve drilling on the controversial Rosebank gas field — which already holds a license — could also come this week, although the field’s developers think it is more likely in the new year. Officials from Miliband’s Department for Energy Security and Net Zero summoned OEUK for a meeting Friday in Whitehall, according to two of the industry figures. ‘POLITICALLY STUPID’  The idea of softening fossil fuel policy is alarming some on Labour’s backbenches.  Referencing the pledge not to allow new drilling licenses, Barry Gardiner, an environment minister under Tony Blair and now a member of parliament’s Environmental Audit Committee, said: “It is a commitment that I am sure the chancellor will wish to honor, given that yet another broken promise or U-turn would be as politically stupid as it would be environmentally illiterate.”  The pledge, he said, had “sat happily with the U.K’s commitment at the last COP to phase out fossil fuels.” Fellow Labour MP Clive Lewis said any watering-down would be a “mistake.”   “It would signal that the government is more focused on reassuring fossil-fuel interests than giving the public a credible plan for energy security and climate stability. Voters aren’t blind to that,” he said.  But their views are not shared across the party.  Mary Glindon, a Labour MP in the former industrial city of Newcastle, hosted OEUK in parliament earlier this month.  “The truth is that our once proud North Sea energy industry is shedding about one thousand jobs a month. … Without renewed investment, I fear for our communities and the prosperity of our young people,” she told an audience of MPs, lobbyists and business leaders.  OEUK, in a letter to Prime Minister Keir Starmer this September, seen by POLITICO, said that “without fiscal reform, changes to the regulatory framework and licensing will be insufficient on their own to transform the outlook for the industry.” | Pool Photo by Henry Nicholls via Getty Images Policy in the North Sea must show workers “that we are on their side,” Scottish Labour MP Torcuil Crichton told POLITICO earlier this year.   Gary Smith, general secretary of GMB Union — traditionally a champion of Labour which represents thousands of oil and gas workers — told the same OEUK event: “This is a crucial moment in terms of the Budget, and if the government gets this wrong on the future that the North Sea, it will be a strategic, long-term disaster for this country.”   A DESNZ spokesperson said: “We will implement our manifesto position in full to not issue new licences to explore new oil and gas fields. “Our priority is to deliver a fair, orderly and prosperous transition in line with our climate and legal obligations, with the biggest ever investment in offshore wind and first of a kind carbon capture and storage clusters.” PRESSURE ALL AROUND Even if the government is willing to upset its greenest backbenchers, it still won’t be enough to win round the biggest backers of oil and gas.  OEUK, in a letter to Prime Minister Keir Starmer this September, seen by POLITICO, said that “without fiscal reform, changes to the regulatory framework and licensing will be insufficient on their own to transform the outlook for the industry.” Robin Allan, chairman of the lobby group BRINDEX, also argues potential changes to the industry’s fiscal and licensing regimes would do little to revive the industry.  “The tweaking and tinkering of existing policies will not make the North Sea an investable basin,” he said. To restore business confidence, he argued, “wholesale reform is needed.”  There is nervousness inside Labour that attempts to navigate these pressures will leave the government, already struggling with voters, even more vulnerable.  The Green Party, helmed by media-savvy new leader Zack Polanski, is rising in the polls.   Labour would be “wriggling out” of their climate commitments if they pushed ahead with tiebacks and Windfall Tax reforms, argued Green MP and the party’s Westminster leader Ellie Chowns. It would be “politically mad to allow new drilling licences when the Greens are surging in the polls,” argued the same Labour MP quoted at the top of this article.  “The growing support for the [Green Party] shows that people want honesty, consistency and a transition [to net zero] that protects workers and communities rather than corporate profits,” said Clive Lewis.  And the pressure would not just come from the left.   Nigel Farage’s poll-topping Reform UK has promised to let oil and gas companies drill the North Sea basin until it is dry.  The Conservatives, too, are staking out a much stronger line backing fossil fuels.  “Anything short of an overturn of the [Windfall Tax] and … a complete overturn of the [licensing] ban is going to fall far short of what the industry needs at this time,” said Tory Shadow Energy Minister Andrew Bowie.  Think tanks close to Miliband’s own left flank of politics are getting restless.   Softening the regime in the North Sea might appear to have political dividends by heading off the Tories and Reform, said Alex Chapman, senior economist at the New Economics Foundation, but Labour should resist it. “I think it would be a terrible, terrible decision,” he said. 

LONDON — Keir Starmer loves to play the climate leader. But only when his political advisers (and the powerful Chancellor Rachel Reeves) tell him he’s allowed. The green-minded U.K. prime minister flies into the COP30 summit in Brazil Thursday, armed with undeniable climate credentials. His government is pressing ahead with a 2050 net zero target, even as right-wing political rivals at home run away from it. It is about to hand 20-year contracts, laden with financial guarantees, to companies developing offshore wind farms. Just by attending COP, Starmer has shown he’s willing to publicly back the faltering global climate cause, despite furious attacks on the green agenda by close ally Donald Trump. But his claim to global leadership comes with a catch. Action on climate change is also tied to the political agenda back home, where Starmer and Reeves insist they are focused on bringing down bills and driving economic growth. As the prime minister flies in and out of Brazil this week, those key themes dominate. In a speech on Tuesday, Reeves pledged to “bear down” on the national debt and focus on the cost of living — even it requires “hard choices” elsewhere. Climate is no exception. SHY GREEN It was Starmer’s “personal decision” to go to Brazil, U.K. Climate Minister Katie White told a pre-COP event in London on Tuesday. It was reported in the run-up to the summit that he would skip Brazil, amid concerns among his top political aides about the optics of a jaunt to South America to talk climate while voters — disillusioned with Starmer and Labour — struggle with the cost of living at home and brace for tax rises expected in the budget. In the end, Starmer opted to go. But the absence of a full traveling press delegation, the norm at previous COPs, means his visit will generate less media coverage. (Government officials insisted the decision not to take a full press pack was purely logistical.) Starmer, while not an expert, is instinctively supportive of climate action, said one government official. But not so much so, countered a Labour MP, that he has “his own ideas about things.” “He wants to do the right thing, but would be steered as to whether that’s talking about forests or clean power or whatever. I suspect [No 10 Chief of Staff] Morgan McSweeney didn’t want him to go,” said the MP, granted anonymity to give a frank assessment of their leader. JOBS AT HOME GOOD, TREES ABROAD BAD The COP30 leaders’ event is taking place in Belém, the Amazon port city near the edge of the world’s greatest rainforest. But in a symbol of how domestic messaging trumps all else, Starmer will use that global platform to talk about a somewhat less exotic port: Great Yarmouth in East Anglia. It’s one of three U.K. locations — along with Greater Manchester and Belfast — where new, private sector clean energy deals are being announced, securing a modest 600 jobs. The COP30 leaders’ event is taking place in Belém, the Amazon port city near the edge of the world’s greatest rainforest. | Mauro Pimentel/AFP via Getty Images If COP’s Brazilian hosts were hoping for a grander global climate vision, they are about to be disappointed. The U.K. won’t be stumping up any taxpayer money for a global fund to support poorer countries to protect their tropical rainforests — key carbon sinks that, left standing, can help slow the rate of climate change. The Tropical Forests Forever Facility (TFFF) is supposed to be the centerpiece of the summit for Brazilian President Luiz Inácio Lula da Silva, but Lula has not been able to rely on even his close, left-wing ally Starmer — with whom he likes to chat about football — to weigh in with a financial contribution to match Brazil’s $1 billion. The U.K. played a role in establishing the concept of the TFFF. An energy department spokesperson said the government remained “incredibly supportive” of the scheme. But, with Reeves warning this week that her budget would deal with “the world as we find it, not the world as I would wish it to be,” her Treasury officials won a Whitehall battle over the U.K.’s financial backing for the scheme. Ministers say only that they will try to drum up private sector investment. ‘KEIR, SOMEWHERE IN THE MIDDLE’ The decision neatly captures the Starmer approach to climate action. If it suits the domestic economic and political agenda, great. If not then, then there is no guarantee of No. 10 and Treasury support. Taxpayer-funded international aid spending, a vital part of the U.K.’s global climate offer, has been slashed. At the same time, despite stretching emissions goals, one of the world’s busiest airports, Heathrow, will be expanded — because of its potential benefits for growth. Ministers are looking at watering down a pledge to ban new licences for oil and gas exploration in the North Sea, amid a sclerotic economy. The Treasury is considering easing the tax burden on fossil fuel companies. The bipolar approach risks bringing Starmer and Reeves into conflict with the U.K.’s energetic, committedly green Energy Secretary Ed Miliband, who will lead the country’s delegation to the COP30 conference and the formal United Nations negotiation. “On all of this, there is Ed on one side, Rachel on the other, and Keir somewhere in the middle,” said the government official. Starmer largely subcontracts his climate and energy policy to Miliband, said an industry figure who frequently interacts with government. Many MPs wish Starmer would act more like Miliband and embrace his green record more exuberantly. They point to the recent surge in support for the Green Party, which is making some in Labour nearly as nervous as the rise of Nigel Farage’s Reform UK to their right. OUTFLANKED In that context, it was a “no-brainer” for Starmer to go to COP and appear “visibly committed to climate action,” said Steve Akehurst from the political research firm Persuasion UK. “In so far as there is any real backlash to net zero in the U.K., it does not exist inside the Labour electoral coalition,” he said. The Greens are now “competing strongly for those votes.” A second Labour MP put it bluntly. “Starmer is so politically weak that to not attend would open up yet another front on his already collapsed centre-left flank,” they said. Before getting on the plane to Brazil, Starmer met sixth-form students at 10 Downing Street to talk about the summit and the environment. There was a flash of the green, idealistic Starmer that some say lurks beneath the political triangulation. He took the opportunity to remind the teenagers of the “obligation we undoubtedly have to safeguard the planet for generations to come.” “But also,” he added, it’s about safeguarding “hundreds of thousands of jobs in this country.” Additional reporting by Abby Wallace.

LONDON — American pharmaceutical giants will start to shutter their U.K. operations unless Keir Starmer’s government agrees to pay more for their drugs, U.S. Ambassador to the U.K. Warren Stephens warned ministers on Wednesday. “The U.K. needs to continue addressing its pricing structures for medicines to ensure it can compete for investment from U.S. firms,” Stephens told a U.K.-U.S. business gathering in central London attended by British trade and foreign ministers. “If there are not changes made, and fast, pharma businesses will not only cancel future investments, they will shut down their facilities in the U.K.,” the diplomat said. “This would be a major blow to a country that prides itself, rightly so, on its life sciences sector.”  The U.K. is locked in drug-pricing negotiations with the Trump administration and pharmaceutical firms about how much the National Health Service pays for their products through the so-called Voluntary Scheme for Pricing, Access and Growth (VPAG) scheme. Britain has offered to increase the threshold at which the NHS pays firms for medicines by up to 25 percent, POLITICO first reported in October. But pharmaceutical executives are pushing the government to go further. American drugmaker Eli Lilly’s international business chief said on Monday that it wants to see more changes to Britain’s medicine market before it pivots on its abandoned £279 million investment in a biotech incubator project. “I don’t think we have heard enough to say that we are willing to get the Lilly Gateway Lab started,” Patrik Jonsson, president of Lilly’s international business, which covers all markets outside the U.S., told POLITICO. The focus of talks has turned to the government’s “clawback” system, where firms have to pay back part of their revenue if the total amount the NHS spends on drugs rises above a certain cap. Unless ministers agree to also raise that cap, any extra NHS spending will mean a larger clawback bill for pharma companies. Pricing talks feature in the U.K.’s ongoing trade negotiations with Washington after Starmer struck a framework trade deal with Trump in May, promising to “improve the overall environment” for pharmaceutical firms operating in Britain. U.K. negotiators are currently in Washington and “progress is being made on this literally as we speak,” Stephens said, adding he hopes “that will yield some success.”  The U.K.’s “chief obstacle” to growth is also its high energy costs, Stephens added. “If there are not major reforms to U.K. energy policy, then the U.K.’s position as a premier destination in the global economy is vulnerable.”  Britain’s Labour government is “completely signed up to an ambitious agenda for business,” said Trade Minister Chris Bryant, in an address following Stephens’ speech. He set out how the government plans to “integrate” its industrial, small business and trade strategies to grow the economy.

LONDON — Former British Prime Minister Theresa May laid into her own political party Monday night, accusing it of taking a populist tilt to the right that risks emboldening Nigel Farage. May criticized the Conservatives’ decision to repeal the Climate Change Act 2008, which requires the government to cut carbon emissions by 80 percent by 2050, as an “extreme and unnecessary measure”  that would “fatally undermine” Britain’s leadership on climate issues. The U.K. committed to reaching net zero under May’s administration, something Tory Leader Kemi Badenoch has since called “impossible.” Badenoch has also advocated extensive oil and gas extraction from the North Sea. “This announcement only reinforces climate policy as a dividing line in our politics, rather than being the unifying issue it once was,” May told fellow members of the House of Lords. “And, for the Conservative Party, it risks chasing votes from Reform at the expense of the wider electorate.” May also lambasted the “villainization of the judiciary” by politicians “peddling populist narratives” and said this would “erode public trust in the institutions of our democracy and therefore in democracy itself.” Shadow Justice Secretary Robert Jenrick, who narrowly lost the Tory leadership contest last year, used his conference speech earlier this month as a tirade against “dozens of judges with ties to open-borders charities” and said “judges who blur the line between adjudication and activism can have no place in our justice system.” Though May recalled “frustrating” experiences coming up “against the courts” as a minister, she urged her party to “tread carefully.” “Every step we take to reduce our support for human rights merely emboldens our rivals and weakens our position in the world,” the former prime minister said. “Those politicians in the Western world who use populism and polarisation for their own short-term political ends risk handing a victory to our enemies.”

WARWICK, England — Jon Butterworth is the guy tasked with helping protect the country if there’s ever a major attack on Britain’s energy system. The boss of National Gas, he oversees thousands of miles of transmission pipelines, the crucial network of pressurized pipes transporting gas to power stations, heavy industry, and via local distributors to heat millions of British homes.  That’s the day job. But if Britain ever faced a gas supply emergency, Butterworth would have sweeping powers to control domestic gas flows, if necessary cutting off factories, power stations, and — in extreme scenarios — homes as well, to preserve supply for hospitals and other vital infrastructure. It’s a role that puts him on the frontline of national efforts to prepare for potential attacks on U.K. energy supplies by enemies like Vladimir Putin’s Russia.  Should such an emergency come, the government would need an Order in Council — a legal directive personally approved by the king — to overrule Butterworth, operating in his additional, little-known role as the country’s Network Emergency Coordinator.  Butterworth has barely sat down for an interview with POLITICO when, off-handedly, he starkly illustrates the major, ongoing shift in the country’s attitude toward energy security.  The National Control Centre — from where Butterworth’s team operates those critical pipelines — was sited in Warwick more than 20 years ago, he explains. The “business has grown around it” into what is now a sleek, modern technology park on the edge of town.  “In the future, we probably would not do that,” he said, with characteristic sangfroid. “We’d probably be putting it in a bunker.”  A bunker?  “That’s the government’s thinking,” Butterworth said, “about this sort of thing.”  ENERGY IN THE CROSSHAIRS  The reason for his (and the government’s) concerns are plain.   “Europe has become a bit more of a dangerous place, hasn’t it?” says Butterworth, a gas engineer by training who worked his way up from his first job, aged 17, at Rochdale gas works near Manchester.  Russia’s invasion of Ukraine, and its recent incursions into NATO countries, has put Europe on high alert. Russia has repeatedly demonstrated in Ukraine that it sees energy infrastructure as “a target,” says Butterworth.   Though the U.K. Labour government wants to wean the country off gas to clean power, it remains the lifeblood of everyday life in one of Europe’s most gas-dependent countries. The pipes transporting the fuel around the country are the vital arteries.  Downstairs from Butterworth’s office, in the control room, a big screen shows a schematic map of Britain. Five thousand miles of pipeline are represented by thin yellow lines. Around the coasts, red triangles represent entry points for gas coming ashore: via pipeline from Norway, from British drilling sites in the North Sea, or from ships laden with supercooled American or Qatari liquefied natural gas landing at Milford Haven in Wales and the Isle of Grain in Essex.  Britain’s energy supply is more vulnerable to adversaries today, Butterworth believes, than in the last century.  Jon Butterworth is the person at the frontline of the U.K.’s efforts to prepare for potential attacks on the country’s energy supplies. | National Gas “[In] the 1930s, we were a mile underground digging coal. You couldn’t really get any safer. Now we’re bringing boats across the high seas and we’ve got pipelines under the ocean. So it’s different.”  One former U.K. defense secretary has termed undersea infrastructure, including pipelines bringing gas into the country, “the soft belly of British security.”  EMERGENCY COORDINATOR   It’s these vulnerabilities that now occupy Butterworth’s thinking should he be called on to exercise his powers as NEC — a position enshrined in law. If the country’s gas supply was suddenly reduced, and the usual, market-based methods for covering the shortfall failed, Butterworth would be called on to declare a “network gas supply emergency.”  That would hand him sweeping legal powers to control national supply and demand of gas, with which gas companies would be legally required to comply, powers that can be over-ruled only on the say-so of the king — a responsibility Butterworth acknowledged with a nod, saying, “I’ve always found that quite fascinating myself.”  The NEC position has existed since the 1990s. Butterworth has held it since 2022. Since the invasion of Ukraine, he has been “more cognizant of” potential scenarios involving “loss of supply from the North Sea,” he said — as might be caused by a Nord Stream-style attack on a pipeline.  For years, National Gas has held annual wargame-style exercises to practise for an emergency. The next takes place later this month, involving 50 organizations — including the government — and 400 people.   The scenario is different each year. To trigger Butterworth’s emergency powers a combination of things would likely have to go wrong: a pipeline failure, for example, combined with a reduction in LNG supply and cold weather driving up demand.  THE CHRIS WHITTY OF ENERGY  In a network emergency — something Britain has never experienced and which remains “highly unlikely,” Butterworth stresses — to preserve gas for those that need it most, like hospitals, he could make public appeals for reduced gas use, require large gas users like power stations and factories to shut down or, in the most extreme cases, cut off gas to potentially large numbers of homes. Such a step would be taken to maintain the safety of the wider pipeline system. At all costs, the goal would be to avoid an unplanned loss of pressure somewhere in the network — a highly dangerous situation that can lead to gas leaks into homes or explosions.  “It’s never happened, so it’s hard to articulate,” Butterworth says. “But what’s important is that we do not lose pressure to the cities.”  “The right thing for our country transcends everything and that means minimizing any potential loss of life, whatever actions need to be taken, however damaging it is commercially,” he added. If the worst happened, he would also have a role advising government and likely communicating with the public about what was going on — like Chief Medical Officer Chris Whitty and Chief Scientific Adviser Patrick Vallance during COVID-19.   “A bit like an aircraft simulator, we rehearse and rehearse and rehearse for this day,” Butterworth says.  THE PATRIOT There remains only “a very small risk” of a network emergency, but that risk “must have increased a little” given the geopolitical situation, Butterworth believes.  A conventional attack on gas infrastructure has a probability of one to five percent on the government’s official risk register. A cyberattack on gas infrastructure is considered more likely, at five to 25 percent. National Gas has put “a lot of thought, horsepower, money, into cyber defense,” Butterworth said.  In the scenario laid out in the risk register, is takes “several months” to restore gas to all domestic customers — a very long time, particularly in winter.   “You’ve got half a million businesses, 23 million families that would require heat, plus the power stations.  … So it’s very important that it never happens,” Butterworth said  Now 63, Butterworth considers chief executive of National Gas his “second job.” The unpaid NEC is his first.  “I didn’t really realize it probably until I was 50 … that I’m a patriot,” he says. He has been appointed a Major in the 77th Brigade, the special British army unit that describes itself as specializing in “new forms of warfare.”   “You don’t contact them, they contact you,” Butterworth says. “I have a skillset that they wanted around networks and energy.”  HOW TO BE RESILIENT While as NEC he must think the unthinkable, he is confident the U.K. gas system and its supply lines are “resilient,” thanks to multiple supply routes via pipelines from Norway and other neighbors, from LNG that comes primarily from the U.S., and from the U.K.’s own reserves in the North Sea.  National Gas’s Winter Outlook report, due later this week, is expected to forecast sufficient gas supplies over the colder months, even in the event of unforeseen outages — although with tighter supply margins than in the previous four years. Butterworth welcomes reports ministers are looking at ways to allow some new oil and gas exploration near existing fields in U.K. areas of the North Sea. “With what’s going on around the world, particularly in Ukraine and the potential lack of gas in Europe, having sovereign gas supplies is helpful,” he says.  The government will soon publish a consultation on “gas system resilience,” looking at the security of U.K. gas supply and options for ensuring the country never has to call on Butterworth’s NEC powers.  He hopes it will show a government thinking about energy supply in the context of dangerous geopolitics.   “It’s going to tease out energy resilience. Military energy resilience. Sources of supply, etc. [The Department for Energy Security and Net Zero is] particularly tuned into this as a threat going forward,” he says.  And if the worst does happen?  Being prepared is “all we can do,” Butterworth says. “I’ve been rehearsing for 46 years.”