Business physique Offshore Energies UK (OEUK) warned in a press release posted on its web site not too long ago that 42,000 jobs and GBP 26 billion ($32.7 billion) of financial worth can be worn out below new Labour proposals to increase the windfall tax on UK oil and fuel producers.
Within the assertion, OEUK stated “Labour’s plans to ‘finish loopholes’ have led to uncertainty amongst vitality firms that the social gathering could take away important allowances that allow firms to make long run investments in homegrown manufacturing”.
“Primarily based on the restricted info offered by Labour, OEUK has warned this can doubtless lead to no new investments being made in UK oil and fuel tasks with the affect being felt instantly,” OEUK added.
The group additionally identified that Labour has stated it’s going to increase the present 75 p.c windfall tax to 78 p.c till 2029. OEUK revealed within the assertion that it has requested for an pressing assembly with the Labour management.
“Labour both can’t do the maths or haven’t thought-about the alarming jobs affect that might be felt up and down the nation”, OEUK CEO David Whitehouse stated within the assertion.
“With no new funding, 42,000 jobs will go, and we might begin to see the results as early as this yr. These are usually not faceless numbers however first rate, hardworking folks working throughout the UK to offer the vitality we’ll want at the moment and sooner or later,” he added.
“The affect of no new funding might be felt throughout the entire economic system – at the moment we estimate the UK will lose GBP 26 billion of financial worth. It can undermine the very trade which may and should play a important position in delivering a homegrown vitality transition,” he continued.
“We’ve all the time stated the trail to web zero is thru working collectively between authorities, enterprise, and folks, guaranteeing no particular person, group or sector is left behind – that’s not what we’ve had from Labour. The least this trade, our folks, and our communities deserve is an pressing assembly with Labour management,” Whitehouse went on to state.
In its assertion, OEUK famous that 75 p.c of the UK’s vitality wants are met by oil and fuel and stated lots of the firms producing oil and fuel are the identical firms main the enlargement of offshore energies together with wind, hydrogen, and the event of carbon seize and storage.
OEUK stated the assertion that the Labour social gathering has persistently stated it’s going to work in partnership with enterprise and added that it has acknowledged the necessary position the UK offshore vitality sector can and should play in delivering a transition to cleaner energies which leaves nobody behind. OEUK added that Labour’s announcement was made with out engagement with the trade.
Rigzone has contacted Labour’s London, North, West Midlands, and South West workplaces for touch upon the OEUK assertion. On the time of writing, not one of the workplaces have responded to Rigzone but.
A publish on the Labour social gathering’s X web page on February 8 states that “Labour will ship a correct windfall tax on oil and fuel giants”.
The Power Income Levy (EPL) was launched on Could 26, 2022, to tax the distinctive earnings of oil and fuel firms arising from unexpectedly excessive oil and fuel costs, a coverage paper on the EPL on the UK authorities’s web site notes. The EPL is charged at 35 p.c, bringing the whole headline price of tax on oil and fuel earnings to 75 p.c, the paper states, including that it is because of finish on March 31, 2028.
On June 9, 2023, the federal government introduced the Power Safety Funding Mechanism (ESIM), setting out the circumstances through which the EPL would finish early, the paper says, outlining that the EPL will stay in place till March 31, 2028, “until oil and fuel costs fall to traditionally regular ranges for a sustained interval”.
The paper highlights that, on June 12, 2023, Exchequer Secretary to the Treasury Gareth Davies laid a Written Ministerial Assertion confirming the introduction of the ESIM.
“This confirmed that the EPL will completely be disapplied if common oil and fuel costs are each at or beneath the ESIM worth threshold for 2 consecutive quarters,” the paper states, including that “ESIM threshold costs had been calculated utilizing a 20-year historic common to the tip of 2022 and are set at $71.40 per barrel of oil and £0.54 per therm of fuel”.
On July 18, 2023, the federal government printed a dialogue word that sought views from stakeholders on the technical element and sensible utility of the ESIM, the paper factors out, stating that “this technical word units out the method for monitoring the ESIM and the way the EPL will stop if the ESIM is triggered”.
Within the 2023 Autumn Assertion, the federal government printed a abstract of responses to the dialogue word, alongside the technical word, the paper highlights.
To contact the writer, e-mail andreas.exarheas@rigzone.com