Over 2,500 individuals urge Prime Minister to reconsider energy profits levy
Topics covered
In a significant outcry against the UK Government’s Energy Profits Levy, more than 2,500 individuals, including numerous energy workers, are demanding an end to the controversial windfall tax. This plea comes in light of Harbour Energy’s recent announcement that it plans to cut 250 jobs in Aberdeen, a decision attributed to the financial strain imposed by the tax.
Impact of the Energy Profits Levy
The Energy Profits Levy, introduced by the Conservative government in 2022, has faced increasing scrutiny as it has been linked to substantial job losses in the oil and gas sector. The letter addressed to Prime Minister Sir Keir Starmer highlights the “devastating blow” to the workforce, particularly at Harbour Energy, the largest oil and gas producer in the UK.
The firm has indicated that the tax has significantly impacted its operations, leading to the difficult decision to reduce its workforce.
Support from Business Leaders and Communities
Among the signatories of the open letter are over 70 employees from Harbour Energy and 300 business leaders, including prominent figures like businessman Martin Gilbert and energy industry veteran Sir Ian Wood. Their collective voice warns of the potential for “deindustrialisation and mass unemployment” if the current tax policies remain unchanged. The letter also notes that approximately 300 additional job losses have occurred in the supply chain recently, contributing to a staggering total of 10,000 job losses since the tax’s implementation.
Concerns Over Future Energy Projects
The letter expresses grave concerns about the future of the UK’s energy sector, stating, “We are at grave risk of losing the world-class company and skills base that will be required to deliver offshore wind, green hydrogen, and carbon capture projects.” The signatories argue that the incoherent government policy could lead to an early end to oil and gas production, forcing the UK to rely on imports for its energy needs.
In response to the growing unrest, the UK Government has characterized Harbour Energy’s decision as a “commercial” one, pledging to support affected workers and communities. A government spokesman stated, “The government has reformed the Energy Profits Levy to support investment and give industry certainty and stability.” However, critics argue that the current tax structure, which has raised the effective tax rate on operators to 78%, is unsustainable and detrimental to the industry.
As the situation unfolds, the call for action grows louder, with community organizations like Aberdeen Cyrenians and Cash for Kids expressing their support for the workers affected by these job cuts. The urgency of the matter is clear, as stakeholders urge the government to reconsider its approach before it is too late.
