{"id":1485951,"date":"2024-08-26T07:30:00","date_gmt":"2024-08-26T11:30:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1485951"},"modified":"2024-08-26T07:30:00","modified_gmt":"2024-08-26T11:30:00","slug":"labours-north-sea-windfall-tax-sparks-industry-backlash","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/labours-north-sea-windfall-tax-sparks-industry-backlash\/1485951\/","title":{"rendered":"Labour’s North Sea Windfall Tax Sparks Industry Backlash"},"content":{"rendered":"

Labour’s North Sea Windfall Tax Sparks Industry Backlash<\/span><\/p>\n

\n

Via OilPrice.com,<\/em><\/a><\/p>\n

Over 40 energy sector companies have voiced their concerns over Labour’s proposed windfall tax increase, warning it could lead to significant job losses.<\/em><\/p>\n

The tax hike, intended to fund green initiatives, has been criticized for potentially hindering investment in both fossil fuels and transition technologies.<\/em><\/p>\n

While the government argues the tax is necessary for the UK’s clean energy transition, industry leaders believe it will have a detrimental impact on the economy and energy security.<\/em><\/p>\n

The government\u2019s plans for\u00a0North Sea oil and gas<\/a>\u00a0are a \u201cblunt response\u201d that could jeopardise hundreds of thousands of jobs not just in the energy sector, several of the industry\u2019s leading figures have warned.<\/p>\n

<\/a><\/p>\n

In an open letter to the Treasury, over 40 companies with operations in the North Sea voiced their \u201cgrave concern\u201d with the new government\u2019s plans for the Energy Profits Levy, which include raising the headline rate of tax to 78 percent and removing the allowance for investment and exploration.<\/p>\n

The signatories\u2014comprising engineering companies like Wood Group, tech firms like 3t, and catering specialists Sodexo\u2014warned that the levy risked jeopardising investment in fledgling transition technologies, such as floating offshore wind and carbon capture technologies.<\/p>\n

However, the firms\u2019 main concern was the negative impact the plans would have on jobs, not just in the energy sector but also in industries and communities that support it.<\/p>\n

Windfall tax will hit jobs<\/strong><\/h2>\n

The North Sea energy industry is believed to support 200,000 jobs, with most of these roles in supporting sectors like catering, transport and infrastructure, Offshore Energies UK \u2013 the industry body that choreographed the letter \u2013 said.<\/p>\n

Entire communities in Aberdeen and much of North East Scotland are dependent on the industry, which is believed to\u00a0support 30 percent of the city\u2019s jobs<\/a>.<\/p>\n

The letter said: \u201cFor our companies, [the tax plans] risk operators \u2013 big and small \u2013 further scaling back or postponing their investment plans in response. The ramifications will be felt throughout the supply chain, through jobs, and the communities this industry supports, both directly and indirectly.\u201d<\/p>\n

But the government has argued its reforms would create \u201cthousands\u201d of jobs in the same part of the UK thanks to offshore workers having the \u201cvital\u201d skills to help build Britain\u2019s renewable capabilities.<\/p>\n

GB Energy, the state-owned renewable energy firm that will form the foundations of Labour\u2019s clean energy industrial strategy, will be headquartered in Scotland when it is formally established in the coming months.<\/p>\n

The letter also claimed the current plans would widen the country\u2019s energy trade deficit, saying: \u201cThe UK spent almost \u00a327bn on imports of crude oil and over \u00a321bn on gas imports last year.<\/p>\n

\u201cThis is \u00a36bn more than receipts from UK crude oil exports and \u00a317bn more than gas exports. The measures as announced risk both the net import gap for fuels, and the emissions footprint of fuel imports, growing long before the UK can deliver reliable, affordable, alternative energy sources.\u201d<\/p>\n

The firms dubbed Labour\u2019s plans a \u201csurprise\u201d despite them having been a core part of the party\u2019s manifesto.<\/p>\n

Making Britain a \u201cclean energy superpower\u201d is one of the government\u2019s five core \u201cmissions\u201d, which\u00a0Keir Starmer unveiled in February 2023<\/a>\u00a0\u2013 nearly 18 months ago \u2013 when his party Party was in opposition.<\/p>\n

The government announced the reforms to the energy levy in the run-up to the election, claiming they will help fund approximately \u00a323.7bn in green spending.<\/p>\n

The tax was first announced by the previous administration after Russia\u2019s invasion of Ukraine led energy firms\u2019 profits to skyrocket.<\/p>\n

It was originally levied at 60 percent, which was then raised to 75 percent, and also contained an allowance for investment and exploration.<\/p>\n

But as oil and gas prices have returned to more regular levels, the tax has eaten into the profit of many of the North Sea\u2019s key players; a fact further hampered by the region being one of the world\u2019s most mature, and thus leas profitable, oil fields.<\/p>\n

North Sea producers curtail output<\/strong><\/h2>\n

On Thursday,\u00a0Ithaca Energy \u2013 one of the region\u2019s biggest players \u2013 posted a major dent to profit in its half-year results, which it claimed were in part down to the windfall tax.<\/a><\/p>\n

And earlier this year, Harbour Energy announced it was cutting 350 UK jobs, blaming the tax after the had said had \u201call but wiped out\u201d the firm\u2019s profit in 2022.<\/a><\/p>\n

The letter added: \u201cThe Prime Minister has reassured the sector that the North Sea will be managed in a way that does not jeopardise jobs.\u00a0<\/p>\n

\u201cThe Treasury has been tasked with being the most pro-growth in our country\u2019s history, and the Chancellor has committed to \u2018working hand-in-hand with business\u2019. Ministers have spoken of working in partnership, of the critical role of the people whose jobs are supported by our offshore energy sector, but we need those commitments to be honoured.\u201d<\/p>\n

A spokesman for HM Treasury said: \u201cWe are strengthening the previous government\u2019s windfall tax to ensure North Sea oil and gas producers contribute their fair share towards our energy transition.<\/p>\n

\u201cOur plans for a new National Wealth Fund and Great British Energy will create thousands of new jobs in the industries of the future.\u201d<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nMon, 08\/26\/2024 – 03:30<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/energy\/labours-north-sea-windfall-tax-sparks-industry-backlash<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Labour’s North Sea Windfall Tax Sparks Industry Backlash Via OilPrice.com, Over 40 energy sector companies have voiced their concerns over Labour’s proposed windfall tax increase,…<\/p>\n","protected":false},"author":0,"featured_media":1485952,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1485951","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1485951","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1485951"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1485951\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media\/1485952"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1485951"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1485951"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1485951"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}