Hundreds of businesses and industry leaders have rallied together to urge Sir Keir Starmer to reverse Labour's windfall tax plans amid fears it will cause huge economic damage to the North-east.
A joint letter signed by more than 800 individuals, firms and trade groups says that the policy undermines Labour’s plans for a green energy transition and “places communities all over the UK at risk”.
The letter - written by Aberdeen & Grampian Chamber of Commerce - warns the Labour leader he will "bring about the cliff-edge end to North Sea production you promised to avoid”.
It said: “If you proceed with these plans, up to 100,000 people could lose their jobs; redundancies on a scale not seen in this country since the pit closures of the 1980s.”
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.
His policies, announced as he scrapped a plan to spend £28 billion a year on green initiatives, would also cut investment allowances, ban new drilling licences and extend the windfall tax by a year to 2029.
The primary signatures on the letter are Sir Ian Wood, the billionaire businessman and philanthropist, and Martin Gilbert, who founded Aberdeen Asset Management, the wealth management firm, and is now chairman of AssetCo.
It is also backed by the Scottish and Aberdeen & Grampian chambers of commerce, Wood, Serica Energy, Aberdeen Airport, North East Scotland College, as well as representatives from property, finance, agriculture groups, charities and the co-leaders of Aberdeen City Council.
A recent report by Welligence, an oil and gas analyst, said that key UK offshore operators such as Harbour Energy, the UK’s largest oil and gas producer, and TotalEnergies had already cut back investment and others were now likely to follow.
The letter stated: “We need to encourage, not deter, investment in new fields to offset decline, otherwise we will lose 75% of our production inside a decade, leaving us reliant on more energy imports from abroad, as well as potential energy shortages.”
It added: “Furthermore, if North Sea production is to cease prematurely — a certain outcome of this policy — then our entire energy transition is undermined.”
The letter also cited analysis by the investment bank Stifel, which suggested that the plan would cost the Treasury £20 billion through job losses and, in a worst-case scenario, cost 100,000 jobs.
Ryan Crighton, policy director at Aberdeen & Grampian Chamber of Commerce, said: “800 people have signed this letter in under 24-hours, which shows just how badly Labour’s proposals have gone down in the North-east of Scotland.
“We cannot overstate mixture of sadness, frustration and anger – throughout and beyond the energy sector – which has resulted from this announcement.
“The signatories to this letter are not just energy businesses, they are charities, education institutions, house builders, professional services firms – this list goes on.
“People and businesses are rightly worried about the impact this policy will have on our region, should Labour form the UK government, because it impacts our entire economy.
“Labour cannot ignore the strength of feeling being shown and must now get around a table with industry to thrash out a solution, otherwise they risk undermining the energy transition and putting tens of thousands of people out of work.”
Labour Shadow Scottish Secretary Ian
Murray said "Jobs are at the heart of Labour's
Green Prosperity Plan - we will not only protect existing jobs in the North
East but will bring the jobs of the future to the region.
"We will set up a publicly-owned GB
Energy Company here in Scotland, which will support the creation of thousands
of clean energy jobs and help deliver clean energy by 2030. Labour's plans will cut bills,
create jobs, deliver energy security and unleash Scotland's potential as a
clean energy superpower."