Reeves backs additional North Sea drilling to spice up Britain’s oil and fuel provide

Rachel Reeves has said the government is working “intensely” to allow further drilling in the North Sea as the fastest way to boost Britain’s oil and gas supply.

Speaking in Washington this week, the chancellor said the government was working to open up so-called “tie-backs” sites, 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 conflict in the Middle East.

Ms Reeves said the government was not working “pretty intensely” through details with energy companies on the tiebacks, which she announced would be allowed at last year’s budget.

“I announced in the budget last year that we were going to allow tiebacks,” she said.

“We’re now working through pretty intensely the technical details with the energy companies. What tiebacks are is where you use existing infrastructure to exploit a larger geography of oil and gas.

“It is the quickest way to bring on stream more oil and gas, and it’s important that we get the detail right, so that companies have the confidence to exploit those resources.”

She also said she and energy secretary Ed Miliband are 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 the UK uses.

Speaking at a summit of the International Monetary Fund in Washington, the chancellor said: “So, this is something that I’ve been attracted to for quite some time, delinking electricity and gas prices.

“At the moment, when gas prices are high, we end up paying more for our electricity, even though the cost of producing it doesn’t change.

“And so myself and Ed Miliband are now working to come up with a practical way that we can delink those prices.

“It is quite a big change but is absolutely the right thing to do, especially as electricity makes up an increasing part of our energy mix, and we hope, within the next sort of few days, weeks, to be able to give more details on what that looks like.”

She also signalled she will resist the clamour to raise taxes to pay for increased defence spending in the face of rising global threats to UK security.

Ms Reeves said she had already hiked the burden on taxpayers substantially and “would prefer not to have to do that again”.

Former Nato chief and Labour grandee Lord Robertson on Tuesday accused the government of “corrosive complacency” on military spending. The ex-defence secretary accused “non-military experts” in the Treasury of “vandalism”.

But Ms Reeves insisted she had “provided the biggest uplift of defence spending since the end of the Cold War”.

“National security always comes first, and I will always do the right thing as chancellor to protect our country,” she said.

She pointed out she had taken money from the overseas development budget to increase defence spending.

She added: “The biggest beneficiaries of my spending review last year were the NHS budget and the defence budget. Both of those saw big uplifts reflecting the choices that we’re making as a government.

“We are working through the defence investment plan. It’s a 10-year plan, so it is important that we get it right and we’re spending the money on the right things.

“There’s a lot of focus on the quantum of the money, but actually what is more important is how that money is spent and whether it is meeting the defence needs that we have as a country, and we’re working through that detail at the moment.

“Obviously, we’re working through a range of options, but my two budgets have both increased taxes substantially, and I would prefer not to have to do that again.”

Source: independent.co.uk