Reeves backs further North Sea drilling to boost Britain’s oil and gas supply
Rachel Reeves said the government was working “hard” to allow more drilling in the North Sea as the fastest way to increase Britain’s oil and gas supplies.
Speaking in Washington this week, the chancellor said the government was seeking to open so-called “tie-in” fields, which allow drilling on or near existing fields.
The comments come as calls continue for Britain to expand its use of domestic resources amid the closure of the Strait of Hormuz and conflicts in the Middle East.
Ms Reeves said the government had not been working “fairly hard” with energy companies on the details of the moorings it announced would be allowed in last year’s budget.
“Last year in the budget, I announced that we would allow restrictions,” he said.
“We’re working very hard on the technical details with energy companies right now. “When you use existing infrastructure to tap into a wider oil and gas landscape, linkages are created.
“This is the fastest way to get more oil and gas flowing, and it’s important we get the details right so companies have the confidence to exploit these resources.”
He also said he and Energy Secretary Ed Miliband were looking at ways to break the link between the cost of electricity and gas prices.
Gas almost always sets the price of electricity under the marginal cost pricing model that the UK uses.
Speaking at the International Monetary Fund summit in Washington, the chancellor said: “So this is an issue that has interested me for a long time, the disconnect between electricity and gas prices.
“Currently, with gas prices high, we pay more for our electricity, even though the cost of production remains unchanged.
“And myself and Ed Miliband are currently trying to find a practical way to differentiate between these prices.
“It’s a pretty big change but it’s absolutely the right thing to do, especially given that electricity is making up an increasing part of our energy mix, and we hope to be able to provide more detail on what that looks like over the next few days, weeks.”
He also signaled he would resist clamor to raise taxes to pay for rising defense spending in the face of growing global threats to Britain’s security.
Ms Reeves said it had already significantly increased the burden on taxpayers and she would “prefer not to have to do this again”.
Former NATO chief and Labor leader Lord Robertson on Tuesday accused the government of “corrosive indifference” over military spending. The former defense secretary accused “non-military experts” at the Treasury of “vandalism”.
But Ms Reeves insisted it had “delivered the biggest increase in defense spending since the end of the Cold War”.
“National security always comes first, and as chancellor I will always do the right thing to protect our country,” he said.
He stated that he received money from the overseas development budget to increase defense spending.
He added: “The biggest beneficiaries of my spending review last year were the NHS budget and the defense budget. Both saw large increases reflecting the choices we made as a government.
“We are working on the defense investment plan. It is a 10-year plan, so it is important that we get it right and spend the money on the right things.
“There is a lot of focus on the amount of money, but what is actually more important is how this money is spent and whether it meets the defense needs we have as a country, and we are currently working on this detail.
“Obviously we’re working on a number of options, but taxes have increased significantly in both of my budgets and I’d rather not have to do that again.”
