Is Rishi Sunak in the pockets of big oil?

TL;DR

• Speaking at COP28, Al Gore accused the British government of being “in the pocket of fossil fuel companies”.

• While Sunak’s climate record as Chancellor was mixed, he has overseen several regressive net zero policy changes as PM.

• In July 2023 he confirmed 100 new oil and gas licenses would be granted in the North Sea.

• In September 2023 he announced the phasing out of petrol and diesel cars and gas boilers would be pushed back, and approved drilling in the UK’s largest untapped oil field.

• Sunak received £141,000 from individuals with oil, gas and aviation investments during his prime ministerial campaign in 2022. His wife, Akshata Murty, has a £619 million shareholding in Infosys, which signed a deal worth $1.5 billion with BP in August 2023.

• The Climate Change Committee stated that the recent relaxing of important policies has “countered the positive progress of other announcements”.

The detail

Rishi Sunak has come under fire on several issues since being appointed as UK Prime Minister on 25 October 2022. 

He has faced discontent over the cost-of-living crisis, waning public services despite engineering the highest tax burden since World War II and, amid the squeeze on living standards, the largest series of strikes over pay demands since the 1980s. Economists have also painted a grim picture, with the OECD’s predicting the UK will find itself as the worst performing G7 economy for 2023 and 2024. Meanwhile, internal Conservative Party strains and squabbles over migration continue. 

The recent budget delivered by Chancellor Jeremy Hunt did little to alleviate these pressures. Operating within tight parameters and fiscal rules around debt, the dial was hardly shifted. A new course was not signalled.   

Similarly, criticism has also been growing recently over the prime minister’s lack of prioritisation of net zero policies, with Al Gore’s intervention in December being particularly scathing. 

Specifically, the Former US vice president accused the British government of being “in the pocket of fossil fuel companies”, these comments being made during the COP28 climate summit in Dubai where Sunak was already facing questions over his climate commitments.  

Speaking to Channel 4 News, Gore suggested that Britain’s green credentials were diminishing. “It’s sad for those of us who have in the past pointed to the UK as an example of really inspiring leadership,” he said. “And I thought King Charles’ speech today was an example of great leadership. But the government of the UK now seem to be in the pocket of fossil fuel companies.” 

This hasn’t been the only time that Gore has spoken out against the UK PM. In an interview with the Observer at the climate conference, he also said: “I am not impressed with Prime Minister Sunak’s climate policies. I think they’re terrible. They’re very disappointing.” 

But how much truth is there to Gore’s claims that Sunak and the UK government are in the pockets of big oil? Of course, it’s a controversial claim, but one that’s worth exploring.  

Sunak’s climate record as Chancellor 

Before diving into recent policy decisions that have come under severe criticism, it’s worth considering Sunak’s record on climate action prior to becoming PM.  

In March 2021, the £1.5 billion Green Homes Grant was scrapped because of cuts made by Sunak during his time as Chancellor, after reaching just a tenth of the 600,000 homes it was promised to improve. At that time, it was estimated that 19 million homes required insulating to prevent gas boilers from undermining the UK’s chances of achieving its climate targets. 

On the eve of the COP26 UN climate summit, hosted by the UK in Glasgow in October 2021, Sunak also announced a plan to halve taxes on domestic flights, a move that would serve to encourage domestic air travel despite the fact that aviation emissions could consume around half of the UK’s carbon budget by 2050.  

Sunak also cut the UK foreign aid budget from 0.7% to 0.5% of national income during his time as Chancellor, a move which was criticised because it reduced the funds made available to poorer countries, limiting their abilities to adapt to climate change during a time of worsening crises in vulnerable regions. 

While none of these motions appear particularly favourable, Sunak has consistently cited his ambition for the UK to play a key role in energy transition, with several more positive headlines having come to light during his time in the Treasury. 

In June 2021, he pledged £15 billion to help transform the City of London into a hub for green finance. In November 2021, Sunak also announced a world-first scheme that would force UK companies to publish their net-zero transition plans. And he also previously supported drives for more offshore wind, as well as the original decision to end the sale of new petrol and diesel cars in the UK by 2030.  

However, more recently, Sunak has been embroiled in climate-centric controversies owing to policy changes that have occurred in the last year during his time as PM. 

Changing course?  

In July 2023, he confirmed that 100 new licenses for oil and gas production in the North Sea would be granted, with Number 10 stating that this would be used to "boost British energy independence" and "reduce reliance on hostile states". It came as ministers had stressed the need to tap into North Sea fossil fuel resources since the Russian invasion of Ukraine.  

Standing by his decision during a visit to Aberdeenshire, Sunak explained that using domestic oil and gas saves "two, three, four times the amount of carbon emissions" than "shipping it from halfway around the world", maintaining that the new licenses were therefore in keeping with the UK’s net zero strategy.  

Sunak also confirmed of two new carbon capture and storage clusters, with billions expected to be pumped into the schemes. And in regard to the new licenses, it is said that annual rounds will only go ahead if tests are met that support the transition to net zero. 

However, there is no escaping the fact that expanding oil and gas activity in the North Sea is a backword step, with Chris Skidmore, the influential Conservative MP who led the review of the UK’s climate goals, countering the PM’s message with a tweeted a statement. He said: “This is the wrong decision at precisely the wrong time when the rest of the world is experiencing record heat waves. It is on the wrong side of the future economy that will be founded on renewable and clean industries and not fossil fuels.” 

Come September 2023, Sunak announced a series of major climate rollbacks that have been described as a U-turn on net zero. Most notably, the PM pushed back the deadline for selling new petrol and diesel cars from 2030 to 2035, and the phasing out of gas boilers from 2025 to 2035. 

Further, during the very same month, it was announced that drilling had been approved at Rosebank, the UK's largest untapped oil field, which has left UK regulator North Sea Transition Authority (NSTA) threatened with legal action. Indeed, among both environmentalists and academics alike, it has been argued that its approval isn’t compatible with net zero targets. 

Further, most recently in March 2024, the PM advocated in the Daily Telegraph that the UK needs to build new, gas-fired power stations to replace existing plants and ensure the country's energy security.  

Understanding the PM’s link to oil and gas firms 

With several policy shifts that appear to undermine net zero ambitions coming in quick succession, the spotlight has been further shone on Al Gore’s comments around Sunak’s links to the oil and gas industry. 

There is some substance to these claims. During his prime ministerial campaign in 2022, £141,000 of the £530,000 he received in donations (26.5%) came from individuals with investments in the oil, gas and aviation industry. Baron Michael Farmer, who donated £23,000 to Sunak’s campaign, is both among the world’s most renowned metals traders and an individual with shares in both Royal Dutch Shell and BP, for example.  

Equally, Sunak’s family are linked to the fossil fuel sector via his wife Akshata Murty’s stake in the transnational IT services firm Infosys.  

Indeed, the company that Murty has a £619 million shareholding in and is owned by her father signed a deal reported to be worth $1.5 billion with BP in August 2023. The company admits that it is partnered with “two of the top five integrated oil and gas companies, three of the top four oilfield services providers, and five of the top 10 independent upstream enterprises across the oil and gas landscape”. 

Of course, such ties aren’t indicative of any wrongdoing. Yet they are difficult to entirely overlook given Sunak’s recent policy shifts. Yes, the prime minister has consistently talked up the importance of energy transition, made progressive moves at times, and remained conscious of the climate impacts of backward steps. However, his track record is becoming increasingly muddied.  

The fact he is unravelling some key net zero initiatives is rightly up for criticism, undermining the UK’s net zero efforts at a time when the country is not on track to meet its current targets.  

The CCC’s assessment 

The UK’s Climate Change Committee (CCC) provides the evidence. Having delivered a progress report to Parliament in June 2023, the CCC highlighted that the UK was not on track to meet its Nationally Determined Contribution under the UN process for a 68% reduction in emissions by 2030. 

However, with several developments unfolding after the CCC expressed its concerns about the pace of change required to meet the UK’s climate goals, the organisation opted to “run the numbers” again.  

Pointing to the fact that the PM has relaxed important policies to decarbonise buildings and transport, Professor Piers Forster, Chair of the Climate Change Committee, said: “These steps have countered the positive progress of other announcements. We remain concerned about the likelihood of achieving the UK’s future targets, especially the substantial policy gap to the UK’s 2030 goal. Around a fifth of the required emissions reductions to 2030 are covered by plans that we assess as insufficient.  

“Recent policy announcements were not accompanied by estimates of their effect on future emissions, nor evidence to back the Government’s assurance that the UK’s targets will still be met. We urge the Government to adopt greater transparency in updating its analysis at the time of major announcements.” 

There’s no doubt that Al Gore’s statement that the UK government is in the pocket of fossil fuel companies was provocative and controversial. However, the former US VP’s damning assessment wasn’t made without reason.  

The UK isn’t on track to meet its net zero commitments. In fact, right now, it could be argued that we are headed in the wrong direction.  

— Lew 👋

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