Harriet Cross MP has written to the Labour UK Government calling on Rachel Reeves to scrap the Energy Profits Levy (EPL) in next week’s Spring Statement amid a “do or die” scenario facing the oil and gas industry.
The Gordon and Buchan MP said anything less than scrapping the EPL in full, which is also known as the windfall tax, would be “industrial sabotage”.
She has written to the Chancellor making the call after oil prices dropped to around $66 per barrel (less than £49), despite the UK Government itself defining windfall prices as $90 per barrel.
In her letter to Rachel Reeves, Ms Cross, who has been contacted by concerned oil and gas companies, warned that the EPL, which was increased to a 78% tax rate on North Sea oil and gas activity, is driving away investment, threatening jobs and putting decades of expertise at risk.
The MP believes removing the EPL at next Tuesday’s Spring Statement would allow the industry to start investing in the North East and wider UK again.
The Energy Profits Levy — which Chancellor Rachel Reeves has extended to 2030 — has already been blamed for thousands of redundancies, including 700 at Harbour Energy. More than 800 jobs have also been lost at major infrastructure hubs at Grangemouth and Mossmorran.
OEUK findings show that over £50bn of investment is being lost due to the EPL continuing to be in place, while Robert Gordon University suggests 1,000 jobs in the sector are being lost each month.
Scottish Conservative MP for Gordon and Buchan, Harriet Cross, said: “This really is a do or die scenario facing the industry at next week’s Spring Statement.
“By the UK Government’s own definition, there are no windfall profits, nor have there been for a number of years, which is why Rachel Reeves must scrap the EPL next week.
“Anything less than this is industrial sabotage and economic incompetence.”
In her letter to Rachel Reeves, Ms Cross said: “The Spring Statement is the Treasury’s and the Government’s opportunity to put this right.
“How much more evidence of the damage that the EPL is doing to the industry is needed before action is taken?
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“There is no doubt that significant harm has already been done to the sector.
“But the sooner the Treasury acts, the sooner the industry can begin to look seriously again at securing investment and the multitude of benefits that brings, both regionally for the North East of Scotland and more widely across the UK.
“For the sake of the UK’s oil and gas workforce, for the sake of unlocking billions in investment and for the sake of stimulating growth and supporting our economy, both regionally and nationally, I again urge you to take the right and obvious decision to remove the Energy Profits Levy, and to do so at next week’s Spring Statement.”
