Sometimes it takes a war to get governments to think again. It has been Labour’s doctrine since it won office that drilling in the North Sea is forbidden.
Energy Secretary Ed Miliband has long been regarded as unchallengeable when it comes to renewables and climate change.
Over the very long term he is probably right in thinking green self-sufficiency is a worthy goal.
In the meantime, the Rosebank and Jackdaw fields in the North Sea are inactive but ready to go. There are opportunities for drilling in the Irish Sea and beyond.
More UK oil and gas will not make Britain self-sufficient. Nor by itself will it reduce fuel and gas prices. As the self-sufficient Americans are discovering, energy costs are set globally.
The North Sea’s contribution will not be sufficient to radically change pricing.
Nevertheless, indications are that Keir Starmer, almost certainly supported by the Chancellor, is preparing to allow Rosebank and Jackdaw to be developed.
Restarting drilling will make no difference in the Strait of Hormuz stand-off – unless it goes on for years.
It would mean that the UK was less vulnerable to the energy security, supply and inflationary impacts of geopolitical flare-ups.
The other thing that the Government could do is listen to Centrica chief executive Chris O’Shea, a strong advocate of expanding limited storage facilities at Rough, off the Yorkshire coast.
In a competitive energy market Centrica is not prepared to go it alone and has long sought government subvention. The Tories have been as blind to the need for gas storage as Labour.
Yet how much better it would be if the Chancellor was willing to transfer funds from her infrastructure agenda, dominated at present by HS2 railway, to gas storage. Even in an age of renewables that would ensure that Britain is better protected from global conflagration.
Worlds apart
The US and International Monetary Fund (IMF) live in different universes. There are only a few blocks separating the US Treasury building and IMF HQ in Washington.
And America remains the biggest investor in the Bretton Woods institutions.
All the discussion at the IMF this week has been about the appalling damage the war against Iran and the blockade in the Gulf is doing to the world economy, fissures in private credit and other cockroaches in the financial system.
Yet, amid the gloom, Wall Street is rallying strongly, with the S&P 500 and tech-heavy Nasdaq in scorching form, fuelled by fizzing first-quarter results from banks.
Fund economists constantly remind us that Donald Trump’s ‘big, beautiful bill’, extending tax cuts, will result in the US’s debt-to-GDP ratio rising to 140 per cent by the end of the decade.
Equity markets don’t seem to care. IMF managing director Kristalina Georgieva points out that the US lives in its own universe.
The exorbitant privilege of the dollar means that it can borrow on international markets with impunity.
Some countries have diversified reserves, buying gold and other currencies, but the greenback is first among equals.
Georgieva also notes that the exceptionalism of the American economy has never been more pronounced. Some 70 per cent or more of the world’s asset values are concentrated in the US.
Technology adoption means productivity is climbing by more than 2 per cent annually and, with AI gathering momentum – data centres are sprouting everywhere – that may speed up further.
US Treasury Secretary Scott Bessent has conceded that growth may stall in the current quarter, because of war. He claims output will climb 3 per cent to 3.5 per cent this year.
When markets refuse to die down, analysts find reason to justify exuberance.
However, a worse case IMF forecast of global recession could yet pull America into its orbit.
Running mates
Early visitors to the Mall, the green space at the core of official Washington, will have been greeted by an unusual sight – a posse of finance ministers, including Rachel Reeves, out for a jog at dawn.
Among the gang were representatives of the Commonwealth, including Australia and New Zealand. Fortunately, for other participants, Kenya was absent.
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