OEUK: Labour’s new windfall tax on UK oil and gas will have “alarming” impact on jobs, economy

February 09, 2024

(WO) – The UK’s offshore energy industry has warned 42,000 jobs and £26billion of economic value would be wiped out under new Labour proposals to extend the windfall tax on UK oil and gas producers. Offshore Energies UK has asked for an urgent meeting with the Labour leadership following plans revealed yesterday to extend the windfall tax further. 

Labour’s plans to “end loopholes” have led to uncertainty among energy companies that the party may remove critical allowances that enable companies to make long term investments in homegrown production. Based on the limited information provided by Labour, OEUK has warned this will likely result in no new investments being made in UK oil and gas projects with the impact being felt immediately. Labour has also said it will also raise the current 75% windfall tax to 78% until 2029.

OEUK CEO David Whitehouse

OEUK Chief Executive David Whitehouse said, “Labour either can’t do the maths or haven’t considered the alarming jobs impact that will be felt up and down the country. With no new investment, 42,000 jobs will go, and we could start to see the effects as early as this year. These are not faceless numbers but decent, hardworking people working across the UK to provide the energy we will need today and in the future. 

“The impact of no new investment will be felt across the whole economy – today we estimate the UK will lose £26 billion of economic value. It will undermine the very industry which can and must play a critical role in delivering a homegrown energy transition. 

“Last week, I listened carefully to the Shadow Chancellor promise that Labour will work in partnership with UK businesses. We’ve always said the path to net zero is through working together between government, business, and people, ensuring no individual, community or sector is left behind – that’s not what we’ve had from Labour. The least this industry, our people, and our communities deserve is an urgent meeting with Labour leadership.”

OEUK research shows the damaging impact no new investment in UK oil and gas production would have on critical jobs across the country, which are needed to deliver a homegrown energy transition while continuing to support the country’s energy needs today. 

Today, 75% of the UK’s energy needs are met by oil and gas. At the same time, many of the companies producing oil and gas are the same companies leading the expansion of offshore energies including wind, hydrogen and the development of carbon capture and storage. OEUK has warned the extension will damage wider investment in such projects planned across the North Sea. 

The Labour party has consistently said it will work in partnership with business and that it has recognised the important role the UK offshore energy sector can and must play in delivering a transition to cleaner energies which leaves no one behind. This announcement was made without engagement with the industry.

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