Rachel Reeves will warn G7 nations they must move faster on clean energy to insulate economies against global price shocks from oil and gas as she and the energy secretary Ed Miliband meet G7 finance and energy ministers on Monday.
Keir Starmer will also gather major energy industry and insurance figures to thrash out what emergency measures might be needed to contain the continuing crisis from the blockade of the strait of Hormuz.
But in an explicit rebuke of the Conservatives and Reform, who have urged her to end the ban on new oil and gas licenses, Reeves will tell her fellow ministers that long-term energy security from renewables and nuclear is the only way to prevent future crises.
“As we move faster on renewables and nuclear, our partners in the G7 must do the same – because staying stuck on the rollercoaster of global oil and gas prices will help nobody,” Reeves told the Guardian ahead of the meeting.
“That transition is strongest when countries act together. By working across the G7 we can accelerate investment and build momentum. Energy bills are coming down for families this week thanks to the actions of this Labour government – action that was opposed by the Tories and Reform.”
Treasury sources said Reeves would speak about accelerating investment in renewables and nuclear to transition away from gas power, as well as the UK’s intention to implement the Fingleton review this year to speed up the delivery of new nuclear.
They said Reeves would argue that the G7 nations should not “shift pressure on to partners or weaken collective resilience” – a veiled warning about easing sanctions on Russian energy or on new trade barriers.
Reeves said she rejected calls from the Conservatives to issue new oil and gas licences in the North Sea because they would not insulate the UK from further energy shocks or bring down UK consumers’ bills.
“Kemi Badenoch has admitted the central foundation of her energy plan won’t bring bills down. The only lasting route to lower bills is clean, homegrown power that cuts our exposure to the volatility of global gas markets,” she said. “While the Tories and Reform chase headlines, this Labour government will remain focused on easing the cost of living for families across Britain.”
Starmer will convene senior leaders from Shell, BP, Centrica and Equinor in No 10 on Monday, as well as insurance giants Lloyd’s of London and shipping firms Maersk and CMA and banks including HSBC and Goldman Sachs.
No 10 said it was intended to be a constructive meeting about the perilous state of the strait. It is likely to inform short and long-term contingency planning amid threats from Iran that it intends to assert sovereignty over the strait of Hormuz, including potentially charging vessels for access once the chokepoint is eventually reopened.
Badenoch will ramp up calls for the government to do more to tackle a hit to energy bills, including removing VAT from bills alongside more drilling in the North Sea. She will visit Aberdeen and an oil rig in the North Sea. She will demand the scrapping of GB Energy, heat pump subsidies and abolishing the renewable obligation subsidies currently being funded through general taxation.
“By drilling in the North Sea and scrapping Ed Miliband’s crazy green taxes, our Cheap Power Plan would reduce bills by £200 for everyone,” she will say. “Only the Conservatives have the plans and the team to deliver cheap energy, a stronger economy and a stronger country.”
Badenoch conceded on the BBC’s Laura Kuenssberg programme on Monday that drilling further would not reduce British consumers’ energy bills. “The drilling isn’t going to go directly on to people’s bills, no,” she said. “But if we can make sure that we stop importing from Norway – 40% of our imports are coming from Norway, who are drilling in the same basin. Why are we importing gas that is being drilled in that basin, but we won’t drill our own? This is a wider thing. It goes beyond bills.”
