Andy Burnham has used one of his first acts as Prime Minister to speak to Donald Trump, Downing Street has confirmed, as speculation Labor’s bridge over North Sea oil and gas operations could soften. For the thousands of UK firms involved in overseas supply chains, the stakes are low.
The US President appears to be keen on a new No 10 amid indications that Mr Burnham could overturn the party’s ban on new drilling.
Yesterday, the Mail on Sunday reported that the Prime Minister was preparing to announce plans for new drilling at the Jackdaw and Rosebank fields off the coast of Scotland, two projects where licenses have already been granted but have run into legal challenges.
Mr Trump greeted the reports with restraint. Writing on TruthSocial, he announced that people in Aberdeen, the UK’s oil and gas capital, would be ‘dancing in the streets’, and said the move would make Britain ‘one of the richest countries anywhere in the world’.
It is quite a change of voice. The President previously dismissed Mr Burnham as an ‘extremely liberal’ politician who only knows himself as a ‘city mayor’.
Wealth or otherwise, Aberdeen’s business mentality is real. Oil and gas supports an estimated 13 per cent of jobs in the City of Aberdeen, according to ONS figures quoted by the House of Commons Library, and behind all the operators sits a long tail of small engineering firms, suppliers, transport and telecommunications providers whose order books go up and down with drilling activity.
That series of acquisitions spent two years in prison. When Rachel Reeves increased the tax on energy profits to 78 percent and issued investment subsidies in 2024, industry leaders warned the sector was entering the area of ’over-gaming’, with analysts warning that companies would stop investment and finish old fields early. Any sign that Jackdaw and Rosebank can continue would be the first meaningful change in that squeeze.
However, caution is warranted. Deputy Labor leader Lucy Powell refused to confirm the reports, telling the BBC she did not expect a “change in policy” but a “major shift in emphasis”. Because licenses in both sectors were granted in the past, ministers can move projects around while leaving the broad ban on new exploration licenses untouched.
For SME owners looking beyond Aberdeen, this episode is useful early reading for the new Premier. Mr Burnham came into office with eight out of ten SME owners looking to see what his premiership would mean for their business, yet he has already signed off on tax cuts and business rate cuts for high-end companies. The dramatic turn of the North Sea can suggest that this campaign is dominated by the area.
There is also a little Washington story. A Prime Minister with the President’s ear, even one who has been defeated by the oil scene, is better placed to protect UK exporters from any future tax conflict than someone who has been sacked as mayor.
Nothing is confirmed, and Number 10 is tight-lipped about what the two men discussed. But when the new Prime Minister’s phone calls involve the White House, and the White House talks about British oil, business owners could be forgiven for concluding that the tide has changed.
Amy Ingham
Amy Ingham is a reporter at Business Matters, covering UK business issues with a focus on current affairs, business policy, late payments and insolvency. He joined the magazine in 2026 after completing the NCTJ Diploma in Journalism at Harlow College journalism school. His latest report covers the nationalization of British Steel and its impact on SME suppliers, the reduction of long-term payments made by large firms, and the withdrawal of the director of the Insolvency Service. Reach him at aingham@cbmeg.co.uk.
