Ed Miliband derailed a plan to fund Britain’s defence plan by ramping up North Sea drilling, reports have claimed. The Treasury reportedly found that more drilling in the North Sea would generate enough tax revenue to cover a significant chunk of the £18billion sought by the Ministry of Defence for military programmes.
The plan was backed by Chancellor Rachel Reeves and presented to the Prime Minister. But reports have suggested that Mr Miliband “vetoed” the North Sea proposal. The plan to boost oil and gas production was modelled by the Treasury as tense negotiations took place between No10 and the Ministry of Defence over the delayed defence investment plan (DIP).
A source close to Mr Miliband told The Telegraph that he was not consulted specifically about using North Sea oil and gas revenues to fund the DIP.
They claimed the only talks between Mr Miliband and Downing Street were over cuts to his department’s capital budget.
The source said: “Ed has refused to make decisions on Rosebank and Jackdaw despite Scottish Labour and most of us wanting him to.
“We got obliterated in the Aberdeen by-election because of his intransigence last week.”
Speculation has focused on whether Mr Miliband could be made Chancellor under Andy Burnham.
Former Health Secretary Wes Streeting is another name who has been touted for the top Treasury job.
John Healey, former Defence Secretary, quit days before the crunch Makerfield by-election that Mr Burnham went on to win.
He accused the Government of not providing adequate funding on military spending in the delayed DIP.
Sir Keir is determined to publish the plan ahead of the NATO summit in early July – despite it being something Mr Burnham could un-do if he comes into office.