Rachel Reeves does not have an enviable task. The budget later this month is sure to be full of difficult and painful decisions – essentially the last thing the government needs.
To those difficult decisions, add the oil and gas windfall tax or the Energy Profits Levy (EPL) to give it its Sunday name.
Deputy First Minister Kate Forbes urged Ms Reeves to end the levy – which was increased last year to 38 per cent – early. And today Offshore Energies UK (OEUK) makes the same call saying the nation risks losing thousands more jobs, billions in investment, and critical supply chain capability essential for the UK’s energy security and transition.
In a letter co-signed by more than 110 companies, OEUK argues that the EPL isn’t working for government, industry or consumers.
It states: “We are witnessing an accelerated decline in activity that is undermining the value of the sector and the supply chain capability we need for our energy future. Job losses are occurring at an unacceptable scale, and there is an urgent need for supportive policy to unlock investment, drive economic growth, and safeguard the UK’s energy transition.”
Put simply, Reeves must take note of these warnings and act. The Scotsman reported last week on research that showed three oil and gas jobs had been lost for every one clean energy position created.
We must accelerate the transition to renewables in a coordinated fashion while continuing to exploit the North Sea for our ongoing oil and gas needs. If this is managed properly, keeping industry on side and at the heart of plans, then we will reap the rewards as billions of pounds of investment is unlocked.
If we get this wrong, it will be nothing short of disastrous for the economy in the North East and beyond, and future generations will puzzle over how this golden opportunity was passed up.
The industry in Scotland is at a critical juncture. Next month’s Budget may well determine which way it turns.
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