Billions of pounds put at risk by Labour's oil and gas plans, says offshore industry chief

Offshore Energies UK sounded the alarm following ‘frank meeting’ in Aberdeen

Thousands of jobs and billions of pounds of economic value could be jeopardised by Labour’s plans for the oil and gas sector, the chief executive of the offshore industry trade body has warned.

David Whitehouse of Offshore Energies UK (OEUK) sounded the alarm following a “frank meeting” between senior industry leaders and UK Treasury minister James Murray in Aberdeen.

Discussions centred on Labour’s decision to extend and increase the windfall tax on fossil fuel firms, taking the headline tax rate to 78 per cent. The offshore industry has repeatedly warned this will put jobs and investment at risk.

Mr Whitehouse said: “We thank the minister for the frank meeting. Discussions between government and industry in the coming weeks before the Autumn Statement will be vital to secure investment in the sector and deliver on the government’s commitment to safeguard jobs.

“The minister again heard in no uncertain terms direct from senior business leaders about the impact these proposals are already having for businesses of all sizes and their skilled people right across the whole of the UK. Decisions made by this government in the coming weeks could jeopardise thousands of jobs and billions of pounds in economic value.

“Everyone in the room shared the minister’s ambition for a clean energy future. But this future can only be achieved in partnership with the oil and gas sector and by policies that support jobs, attract investment and anchor business here in the UK. There is no simple choice between oil and gas and renewables – we need both to deliver energy security and a homegrown transition.”

Andrew Bowie, the shadow energy minister and Tory MP for West Aberdeenshire and Kincardine, previously accused Labour of a “reckless and economically illiterate position on oil and gas”. The SNP has also opposed Labour’s plans.

Last month, Chancellor Rachel Reeves said Labour would increase the Energy Profits Levy by three percentage points and remove a 29 per cent investment allowance in order to draw in more tax revenues.

Mr Murray said: “As the UK transitions to clean energy, it is vital we work closely with the oil and gas sector. Having engaged with the sector whilst in opposition, I look forward to continuing discussions now in government and working together to support investment and jobs in Scotland.

“We will ensure the UK's energy supply is secure and we will establish Great British Energy as a new, publicly owned, clean energy company, that is set to cut bills and create thousands of jobs in Britain, funded through revenue from the Energy Profits Levy.”

OEUK argues the offshore energies sector is a “strategic national asset”, supporting 200,000 jobs throughout the UK and contributing £20 billion a year to the Treasury, underpinning national energy security. It previously said the windfall tax should be removed before 2028 to unlock investment.

Speaking to The Scotsman in February, Mr Whitehouse said: "I think it is really clear that as we head into this general election, delivering a successful green industrial revolution is in the balance.”

He added: "If we undermine oil and gas investment now, that will undermine investment in carbon storage, it will undermine investment in wind, it will undermine the very supply chain companies that we need for the UK and Scotland to take advantage of that.”

Read the latest issue of the OGV Energy magazine HERE