A government programme to insulate homes and expand heat-pump use could reduce household energy bills by £1bn a year and support about 50,000 jobs, according to research that challenges the economic case for further North Sea drilling.

The thinktank E3G argues that delivering the £15bn warm homes plan in full would provide a £1.6bn annual boost to the economy, with benefits spread across thousands of small businesses. Its estimated bill savings would be concentrated among households on low incomes.

The figures are projections from research, not savings already delivered or a guaranteed reduction in an individual household’s bill. Their publication comes as ministers seek budget savings and face competing arguments about housing investment, electricity use and the future of oil and gas production.

Different routes to economic growth

Under the warm homes plan, up to five million homes would be insulated. E3G estimates the programme would attract a further £15bn of private investment, distributing activity around the country rather than concentrating it in a single industrial region.

Its comparison puts employment associated with the Rosebank oilfield, west of Shetland, at about 1,100 direct and indirect jobs. Equinor had previously estimated 3,500 jobs at peak for Rosebank and the Jackdaw gasfield combined. Those figures refer to different scopes and should not be treated as interchangeable measures.

The energy secretary, Miatta Fahnbulleh, said on Wednesday that a decision on Jackdaw was imminent, while Rosebank would take longer. Labour’s 2024 manifesto promised to halt new oil and gas licensing, but the two projects could be exceptions because they had already entered the licensing system.

The debate is not simply about the amount of fuel produced. Oil and gas are sold through international markets, so extra North Sea output does not automatically lower the price paid by a British household. Supporters of drilling instead emphasise investment, employment, supply-chain work and revenue for the Treasury.

Tax assumptions disputed

Research by WWF and Uplift, cited in the Guardian’s report, questions how much public revenue Rosebank would ultimately generate after tax concessions. It estimates possible profits of £1.5bn for its backers over a 25-year lifespan but a potential £258m loss to the government through tax breaks and incentives.

North Sea tax revenues were about £4bn in 2025-26, while estimated upstream tax relief and support measures amounted to £3.26bn. The same reporting describes revenues declining sharply as the basin matures and substantial public exposure to the cost of dismantling offshore infrastructure.

E3G estimates that full delivery of the warm homes plan would increase GDP by 0.08%. A separate AI-modelled calculation puts Rosebank’s average contribution at around 0.025% over its lifetime, assuming oil returns to $70 a barrel. These are modelled comparisons with assumptions about prices, timing and public costs, not direct observations of future growth.

Adura, the Equinor and Shell joint venture owning the projects, defended the case for development. It said approving Rosebank and other planned North Sea projects would support £35.3bn of UK economic value between 2026 and 2035. Rosebank alone represented £8.7bn of private investment, it said, with three quarters spent in the UK.

Industry calls for policy stability

Adura also said Rosebank and Jackdaw would contribute £4.1bn in additional tax revenue over the next decade. The Guardian noted that the wider economic figures included other operations and assumptions about supply chains and employees’ spending, while the tax estimate did not account for large available reliefs.

Ten major unions wrote to the government on Thursday opposing a Rosebank licence. Labour MPs and hundreds of scientists have also urged ministers to reconsider. Those objections sit alongside the developers’ arguments that continued offshore investment would support jobs and economic activity.

Energy UK chief executive Dhara Vyas called for the government to maintain its electrification ambitions, warning that changing the warm homes plan or vehicle policy sent mixed signals to businesses. The Department for Energy Security and Net Zero declined to comment on E3G’s findings or the programme’s future. For households, the immediate question remains which measures ministers fund and how quickly benefits reach homes.