Oil and gas chiefs to hold 'crisis talks' over Labour's windfall tax

Sir Keir Starmer promised a “proper” windfall tax earlier this month when he scaled back his party’s £28 billion-a-year green investment pledge.

A new energy profits levy for oil and gas production was introduced in 2022 after global energy prices shot up in the wake of Russia’s invasion of Ukraine.

Labour intends to extend the tax to 2029 if they reach government, with the energy profits levy rising to 78%, saying it would raise £10.8 billion over five years to help pay for their green spending plans.

Speaking ahead of the meetings, 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 that 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.”

On Sunday, Scottish Labour leader Anas Sarwar was asked about concerns from businesses connected to the North Sea industry.

He said oil and gas companies “raking in billions of pounds in profit” should not pay less tax while noting the industry is important in building the transition to a green economy.

He told BBC Scotland’s Sunday Show: “I’ve been meeting many of these companies this week to have conversations with them.

“That’s why we’re really clear alongside a windfall tax, we will have GB Energy, a publicly owned energy generation company headquartered in Scotland, that will use the power of a UK Treasury to leverage in UK money, but also private sector money to manage that transition.”

Mr Sarwar said all of Labour’s energy policies would be driven by four principles, one of which was “more jobs, not fewer jobs”.

Speaking in his keynote speech to Scottish Labour conference yesterday, Sir Keir said if his party forms the next UK government, it will “build a bridge to the future”, adding that “it’s a transition we have to make”.

He doubled down on his proposed windfall tax announcement, labelling “a tough decision”, adding that “it’s not good enough to say we’ll do something popular”.

Acknowledging fears over energy jobs in the north east, Sir Keir said that “work will continue for decades to come”.

The UK Labour leader said the transition would give workers and their community “a future – not just for the short-term – but for decades”.

Ryan Crighton, policy director at Aberdeen and Grampian Chamber of Commerce, has condemned Labour’s “windfall tax, exploration ban and removal of investment allowances”.

He said: “The outcome of these proposed policies could be anywhere between 20,000 and 100,000 job losses.

“Even trade unions are drawing comparisons with the closure of the UK’s coal pits in the 1980s.”

Mr Yousaf will deliver a speech in Aberdeen this morning on preparing Scotland for the energy transition.

He is expected to say that “neither Labour or the Tories has the backbone – the political will, or the political mettle to back Scotland’s green future” and will claim that “the SNP does”.

He will add: “In Scotland we have the will. We have the energy. All we lack is the power.

“Remote control of Scottish energy from Westminster has been a complete failure, in every sense of the word.

“A vote for the SNP, is a vote to control our energy future.”

Scottish Conservative chairman Craig Hoy hit out Labour’s “destructive oil and gas policies”, saying plans for a windfall tax on energy firms have been “roundly criticised by Scottish businesses”

He added: “Labour are betraying North Sea workers and abandoning a crucial Scottish industry.”