Trade body Offshore Energies UK (OEUK) will hold “emergency summits” with operators and the supply chain this week over proposals unveiled by Labour to extend the windfall tax if elected.
Two meetings will take place in OEUK’s London and Aberdeen offices this week, with representatives expressing “deep concern” over the manifesto policies.
In a briefing note for its “Prosperity Plan Policy” on 8 February, Labour confirmed proposals to hike to the industry’s headline tax rate from 75% to 78% and end what it describes as “loopholes” in the Energy Profits Levy (EPL) that allow firms to recoup taxes through investment
The party also plans to extend the sunset clause, currently planned for March 2028, until the end of the next parliament.
OEUK claimed the decision would “wipe out” the sector, with up to 42,000 jobs lost alongside £26 billion of GVA.
Other projections put the losses at a “best-case scenario” of 20,000 jobs lost, and at worst up to 100,000, were Labour to ban any further drilling – though it has not stated it would do so.
Senior figures from OEUK member companies are expected to attend the emergency summits, with OEUK chief executive David Whitehouse convening talks with operators on Tuesday 20 February and supply chain companies on Thursday 22 February.
Speaking ahead of the meeting, OEUK Chief Executive David Whitehouse said: “We remain deeply concerned about what Labour’s proposals could do to our people. If we can’t get companies to invest here, there are no jobs. It’s that simple.
“I’m already hearing from our supply chain and from energy producers that these proposals would deliver a hammer blow to the energy we need today and to the homegrown transition to cleaner energies that everyone in the UK wants to see.
“These meetings will allow us to gather more evidence from employers to put to Labour leadership. As a sector which supports 200,000 jobs, contributes over £20 billion a year to the wider UK economy and has the skills and infrastructure to deliver a homegrown energy transition, we have so much to offer.”
Keir Starmer attempted to calm sector fears over the weekend as he addressed the Scottish Labour conference in Glasgow, telling party members that work in the North Sea would continue “for decades”.
However, the industry continues to issue stark warnings. Last week Chris Wheaton, managing director for oil and gas at Stifel said: “If we try and focus on the investment we can see, everything I’m hearing is that 2024 is going to be the last year of major spending in the UK North Sea because of concerns over where the tax structure might be 2025-onwards.”
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