In his role as Shadow Treasury Minister, James Wild MP has called on the government to reconsider its North Sea oil and gas tax policy following Harbour Energy’s announcement of 250 job losses in Aberdeen, which the company attributes to the Chancellor’s 78% windfall tax.
Speaking during Treasury Questions in the House of Commons, James cited the Climate Change Committee’s view that the UK will need oil and gas until at least 2050, and therefore warned that current tax policy is undermining domestic production, putting jobs at risk, and increasing dependence on imported energy.
Harbour Energy, the UK’s largest North Sea producer, reported a swing from a £930 million pre-tax profit to a £73 million post-tax loss, with its effective tax rate hitting 108%. Industry groups warn that up to 35,000 jobs could be at risk if high tax rates persist, with the Aberdeen & Grampian Chamber of Commerce calling the situation a “devastating blow” to the region.
The Government has pointed to investments in renewables, nuclear, and a new UK-EU energy trading agreement as steps towards energy security. However, James and industry groups maintain these measures fail to address the immediate impact of the windfall tax on North Sea jobs and investment.
James Wild MP said:
“The Climate Change Committee says that we will need oil and gas until at least 2050, but rather than maximise North sea production, the Government are taxing it out of existence. Harbour Energy has just announced hundreds of job losses as a result of the Chancellor’s 78% windfall tax. Instead of costly transition imports, will Ministers use the spending review to think again and focus on an energy policy that will deliver cheaper and cleaner energy that is affordable for consumers and businesses?”
In response, the Chief Secretary to the Treasury, Darren Jones MP, said:
“I welcome the hon. Gentleman’s encouragement. That is why we are investing in home-grown secure energy, including renewables, nuclear and other forms of energy. In yesterday’s UK-EU trade deal—which I am sure the shadow Minister would like to welcome—we have enhanced our arrangements with the European Union on electricity trading, enabling us to export energy we produce in the UK to the European Union and vice versa. That will ensure energy security, as well as good jobs and good businesses in the energy sector, for decades to come.”
