Britain appears to enjoy a privileged position in the mind of Donald Trump. The President refrained from inflicting the worst of his tariff onslaught on the UK, while last week, Vice-President JD Vance said there’s a “good chance” of achieving a mutually beneficial trade deal. And this appears to be based on emotion as much as economics. Trump “loved the Queen. He admires and loves the King,” Vance said. “There’s a real cultural affinity.” On Thursday (17 April) it was reported that a deal could be reached within “weeks”.
So far, though, this remains flattering talk. And perhaps if Keir Starmer wants to tip the President from platitudes into policy-making, he could respond by demonstrating some affinity with Trump’s own agenda. His government has already indicated it is willing to break some of its own shibboleths to try and appease Trump. On 23 March Rachel Reeves suggested that she might be willing to amend the planned Digital Services Tax – which would affect US tech giants such as Amazon and Meta as well as X. Doing so would risk tearing up Reeves’s precarious fiscal position. But the government also doesn’t seem to understand that it is the wrong incentive to offer someone like Trump, who has no love for the tech giants and who continues to post far more frequently on his own Truth Social than he does on Elon Musk’s X.
Trump is not a complicated man. In fact, as his opponents have always understood, he is very superficial. He has always seen positive headlines as more important to his agenda than major policy concessions: see how Colombia similarly received only the base tariff rate after its president reversed course on military aviation being used for deportation flights earlier this year. Trump, or his ghostwriter, has acknowledged as much since the 1987 publication of The Art of the Deal, where Trump claimed newspaper headlines about Trump Tower were crucial to achieving his desired zoning changes, despite opposition from New York Mayor Ted Koch.
There is one such headline that Starmer can offer Trump, at no significant cost to Britain. It would also directly benefit the country where Trump has his largest foreign property investments (in the form of golf courses) and in which his mother was born. Starmer could reverse his policy of forbidding new oil and gas licenses for Scotland’s North Sea oil fields. Trump has explicitly called for the UK “open up the North Sea” to drill more oil and gas, most recently in January. Framing such a policy decision as a response to Trump’s invectives would be awkward, but not if it secured a strengthening of the special relationship just as Trump tears up America’s other trade and political alliances.
And while it would give Trump the kind of headline victory he so craves, it would not do material damage to Labour’s green agenda. The reality is that such a policy reversal would result in little change to the actual amount of development in British waters. The government’s own North Sea Transit Authority forecasts total output decreasing even if new licenses are granted, given the rapid rate of declining of legacy fields. Major oil companies have been pulling out of the sea for years. BP started doing so in 2012, and in the last year alone Shell has sought to accelerate divestments, agreeing to sell natural gas assets to a small start-up, Viaro Energy.
A policy change to keep the majors involved will have domestic as well as foreign policy benefits. Viaro’s key shareholder, Francesco Mazzagatti, stands accused of profiting from an indirect ownership in a US-sanctioned Iranian petrochemicals firm – a relationship that could hugely complicate negotiations with Trump given his policy of “maximum pressure” on Tehran via sanctions. Additionally, Shell has joined with Norway’s state-controlled Equinor to spin off their remaining North Sea oil assets into a new company and thus off its balance sheet. These smaller new players lack the capital of the departing oil majors to finance exploration, let alone expansion.
But if Starmer calls the UK-domiciled pair of BP and Shell to halt divestiture plans, it will be good for Britain too. The Office for Budget Responsibility expects annual government receipts from the North Sea to fall from £4.5bn to £2bn within five years. If Starmer wants to see through his plans for financing a green transition in a way that minimises the impact on Scotland’s working class – a priority for both Labour mega-donor Dale Vincent and the party’s Scottish vanguard that will be so crucial if Starmer hopes to win re-election – it will need the balance sheets of the oil majors to do their part, rather than the smaller players taking their place. As Politico reported last week, “Thousands of British oil workers are set to lose their jobs. No one has told them.” A local economic catastrophe to dwarf the current Scunthorpe crisis is the alternative.
Trump may not have the firmest grip on the underlying economics – but he has similarly has called on US oil majors to increase production domestically. And his administration wants Europe to do more for its own energy security. In fact, Trump repeatedly points out to his criticism of Germany’s disastrous Nord Stream 2 pipeline project to bat away claims that he is too soft on Russia.
And in many ways, this would only represent a continuation of current government policy. Starmer could frame a call for the majors retaining their position alongside with his recent approval of licenses for the North Sea’s Jackdaw and Rosebank fields, the largest remaining to be tapped. In January, a judge ruled that Boris Johnson and Rishi Sunak’s governments had bungled the approval process for these ventures. Rachel Reeves’s Spring Statement revealed the projects would go ahead, but Starmer has not yet sought any political reward for doing so, despite the image of Tory incompetence the process reveals.
If, as seems apparent, the UK seeks to manage Trump through conciliation, rather than confront him à la Mark Carney, it must exploit the assets it has. Alongside his much-touted love for the word “tariff”, Donald Trump has made “drill, baby, drill” into one of his best-known catchphrases. Embracing the slogan in rhetoric, if not in principle, may be the way to unlocking a better deal for Britain.
[See also: Anas Sarwar: “Energy security is national security”]
Content from our partners
Related
