More than 7,000 UK business leaders and workers have collectively urged the Government to accelerate the implementation of a new North Sea oil and gas taxation framework, warning that the current Energy Profits Levy (EPL) threatens tens of thousands of jobs and the wider energy transition.
The Aberdeen and Grampian Chamber of Commerce (AGCC) delivered a letter, supported by First Minister John Swinney, to HM Treasury officials in London. The letter criticises Chancellor Rachel Reeves’s decision to extend the EPL, often referred to as the windfall tax, until 2030. The Chamber contends that the “crippling” 78 per cent tax rate on energy profits is already precipitating significant job losses across the sector.
Recent job reductions, including 700 positions at Harbour Energy since 2023 and over 800 at major infrastructure hubs in Grangemouth and Mossmorran, have been directly attributed to the tax regime.
The industry leaders are advocating for the UK Government’s proposed new Oil & Gas Price Mechanism (OGPM) to be introduced four years ahead of schedule, in 2026. This alternative policy would only activate a higher tax rate when oil prices are elevated, specifically between $90 per barrel next year (2026) and $97 by 2030.
Russell Borthwick, chief executive of the Aberdeen and Grampian Chamber of Commerce, presented the letter, which boasts signatures from prominent figures such as Sir Ian Wood, Aberdeen FC Chairman Dave Cormack, Sandy Begbie of Scottish Financial Enterprise, Claire Mack OBE from Scottish Renewables, and leaders from major companies including Flotation Energy, Wood plc, Subsea7, and Boskalis, alongside several port authorities.
“The North Sea is being taxed into decline, and it is workers and energy communities who are bearing the brunt,” Mr Borthwick stated. He added: “We now need swift, decisive action to prevent major job losses and the deindustrialisation of Scotland’s critical energy infrastructure.”
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Mr Borthwick further argued that “Even the UK Government accepts it is taxing windfalls that do not exist. There is simply no credible justification for persisting with the current regime.” The letter highlights that HM Treasury’s own criteria suggest a windfall only occurs around $95 Brent, a price not consistently observed since October 2022.
The communication to the Treasury references economic forecasts from the Office for Budget Responsibility (OBR), which predict a substantial 93 per cent fall in North Sea revenues between now and 2030, from £4.5 billion to £300 million. The OBR’s analysis explicitly links this anticipated decline to reduced domestic oil and gas production, exacerbated by the continued application of the Energy Profits Levy. This decline, the letter notes, is simultaneously increasing the UK’s reliance on imported energy, which incurred a cost exceeding £60 billion last year.
The Chamber reiterated that the Government faces a “clear choice”: maintain the current EPL, which they warn will “precipitate thousands of further and avoidable North Sea job losses”, or collaborate with the industry to safeguard employment and stimulate investment by advancing the new oil and gas price mechanism to 2026.
