Three of the UK’s most influential business organisations have made a rare joint intervention urging the Chancellor to abolish the Energy Profits Levy (EPL).
The British Chambers of Commerce, Scottish Chambers of Commerce, and Aberdeen & Grampian Chamber of Commerce (AGCC) have jointly written to Chancellor Rachel Reeves calling for the EPL to be scrapped and replaced with a “stable, proportionate and predictable” fiscal regime.
The letter states that the tax “is now the single greatest barrier to investment and growth in the North Sea”, warning that it is “deterring capital, stifling confidence, and accelerating decline in one of the UK’s most productive industrial ecosystems”.
A recent report by AGCC warned that one in four companies in North-east Scotland (25%) cut jobs in the last three months, while industry body OEUK has warned of 1,000 job losses per month across the industry if the EPL remains in place until 2030.
To accompany the letter, the British Chambers of Commerce has released a new video featuring Director General Shevaun Haviland CBE, urging government to back home-grown energy and protect skilled jobs in the North Sea.
In the film, Haviland says: “We all want to see a successful energy transition for the UK. As we make this shift, oil and gas will continue to play a key role in the coming decades – which is why the North Sea is so important.
“Yet despite having this national asset on our doorstep, Britain is burning increasing amounts of imported gas shipped thousands of miles around the globe.”
She adds: “By removing the Energy Profits Levy, we can meet more of our energy demand at home, keeping the jobs and economic benefit right here in the UK – helping to grow our economy.
“So, let’s back home-grown energy, reduce emissions, and support our world-class North Sea workforce – the skilled people we need to deliver a successful transition.”
The joint letter calls on the Government to adopt the recommendations of the North Sea Transition Taskforce, including:
- Replacing the EPL with a fiscal regime that encourages investment while maintaining fair returns for the Exchequer;
- Providing a clear, joined-up regulatory environment to support responsible production of domestic hydrocarbons alongside rapid growth in renewables, CCUS, and hydrogen;
- Creating a ministerially led North Sea Transition Committee to coordinate policy and delivery; and
- Tasking the North Sea Transition Authority with developing a long-term plan for the basin that aligns energy security, net zero, and industrial growth.
Russell Borthwick, Chief Executive at Aberdeen & Grampian Chamber of Commerce, said: “More than three years after it was introduced as a temporary measure, the Energy Profits Levy has become a self-defeating policy. It is deterring investment, shrinking the tax base, and accelerating the decline of the North Sea. The result is fewer jobs, lower revenues and greater reliance on imported energy with four times the carbon footprint of our own.
“The government now has a clear choice – continue down a path that makes the UK poorer and weaker, or act decisively to restore competitiveness, attract investment and protect the skilled workforce and supply chain needed to deliver the energy transition.
“Removing the windfall tax and replacing the blanket ban on new licences with a policy that considers demand and emissions would strengthen energy security, sustain employment and unlock billions in additional revenue for the Treasury.”
The three organisations say they stand ready to work with the Treasury and wider government to deliver the shared vision for a thriving, sustainable North Sea.
OEUK Communications Director Natalie Coupar responded to the letter’s sending, and commented:
“This is a critical intervention. The British Chambers of Commerce joins a growing chorus of voices across the UK economy – from Teesside to Glasgow – calling for urgent reform and warning of the consequences if it doesn’t happen.
“Charities, business organisations, and the energy supply chain are all raising the alarm: the current structure of the windfall tax is damaging investment, slowing growth, and putting jobs at risk.
“We’re calling for the Energy Profits Levy to be reformed and replaced in 2026 with a permanent profits-based mechanism. Industry has submitted a proposal to the Treasury that protects public revenues while unlocking investment in the UK’s energy future. Get this right and our industry will add £137 billion to the UK economy by 2050, bring forward over £40 billion of new projects, pay more tax – not less, and safeguard 160,000 jobs across the country by 2030.
“If we allow the decline of North Sea oil and gas to continue unchecked while failing to accelerate renewables, we risk creating a widening gap in jobs, investment and expertise – one that will be felt in communities and industries across the UK.
“This isn’t about choosing between energy sources. It’s about securing our energy future by strengthening both oil and gas and renewables.
“With the right policy choices, the UK energy sector can power a future that works for the whole economy, strengthens energy security and delivers our climate goals
