LABOUR looks set to soften its windfall tax plan after Ed Miliband revealed this morning that it will only apply when oil and gas prices are “historically high”.
The Shadow Energy Security and Net Zero Secretary – widely viewed as the architect of the party’s North Sea plans – has today vowed to “continue to engage” amid criticism.
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Labour has proposed increasing the existing energy profits levy by three percentage points to 78% as part of a “proper” windfall tax on oil and gas companies.
The policies, announced as the party scrapped a plan to spend £28billion a year on green initiatives, would also cut investment allowances, ban new drilling licences and extend the windfall tax by a year to 2029/30.
Writing in the Press & Journal this morning, Mr Miliband acknowledged the anger the plans have provoked, which culminated in 800 civic and business leaders signing an Aberdeen & Grampian Chamber of Commerce letter last week.
“Of course, dialogue with oil and gas workers and businesses matters, which is why Keir Starmer, Anas Sarwar and I visited Aberdeen last November and we will continue to engage,” he said.
“In response to the sector’s concerns, for example, Rachel Reeves has made clear that North Sea operators should only pay windfall rates of tax while prices are historically high.”
He added: “We will work in partnership energy companies and workers to deliver the change our country needs for the benefit of all.
“We are determined to ensure lower energy bills, good, skilled jobs, energy security and a fair and just transition for all who have invested so much in our energy industries.”
Speaking on BBC Radio Scotland yesterday, Ryan Crighton, policy director at Aberdeen & Grampian Chamber of Commerce, said the windfall tax, introduced by the Conservatives, needs to go.
“Oil prices have returned to normal levels, therefore there are no windfall profits to tax. We should be talking about removing the tax, not extending it in any form,” he said.
“We agree entirely with the principles set out by Labour this weekend and share their ambition to create more jobs in the energy sector and to make our country more energy secure
“However, as things stand, the party’s windfall tax, exploration ban and removal of investment allowances undermine what Sir Keir Starmer is promising.
“If you tax the industry in this manner, you strangle investment. If you strangle investment, then we lose jobs. The outcome of these proposed policies could be anywhere between 20,000 and 100,000 job losses according to analysts.
“We are concerned – OEUK has voiced concerns – and as have unions.”
