A senior Labour minister has been warned that thousands of jobs and billions of pounds of economic value could be jeopardised by changes planned for the Autumn Budget.
Offshore Energies UK (OEUK) sounded the alarm following a “frank meeting” between senior industry leaders and UK Treasury minister James Murray in Aberdeen yesterday.
However, Mr Murray said after the meeting that there there is a “discussion to be had” on allowances which could yet shield the sector from a mass flight of capital.
The Ealing North MP was in the North-east to co-host the a fiscal forum at Offshore Energies UK’s Aberdeen offices, which was attended by senior industry leaders.
The impact of changes to further extend and raise the Energy Profits Levy (EPL), or windfall tax, and the potential removal of critical capital allowances for the sector were central to discussions. He was told that these policy changes are rocking the confidence of firms and their investors in the UK’s global competitiveness.
Speaking to Energy Voice following the meeting, Mr Murray said the government is committed to protecting jobs.
He said it was a “constructive, honest discussion” with oil and gas representatives and that Labour will continue to “listen and engage” on its EPL policy.
“I think people recognise that there are challenges and there are decisions which we are going to be taking as a government, which are difficult decisions,” Murray said.
While Labour is committed to removing the main first year investment allowance currently in place, Murray said there is a “discussion to be had” on other capital allowances.
Speaking after the meeting, David Whitehouse, chief executive at Offshore Energies UK, said: “Discussions between
government and industry in the coming weeks before the Autumn Statement will be
vital to secure investment in the sector and deliver on the government’s
commitment to safeguard jobs.
“The minister again heard in no uncertain terms direct from senior
business leaders about the impact these proposals are already having for
businesses of all sizes and their skilled people right across the whole of the
UK. Decisions made by this government in the coming weeks could jeopardise
thousands of jobs and billions of pounds in economic value.
“Everyone in the room shared the minister’s ambition for a clean
energy future. But this future can only be achieved in partnership with the oil
and gas sector and by policies that support jobs, attract investment and anchor
business here in the UK. There is no simple choice between oil and gas and
renewables – we need both to deliver energy security and a homegrown
transition.”