Labour is under mounting pressure to reverse its plans to raise the windfall tax and halt North Sea exploration.
An impactful front page splash in the Press & Journal this morning depicts Sir Keir Starmer, Rachel Reeves, Ed Miliband and Anas Sarwar as cloaked 'Traitors', like the BBC show, and warns of huge job losses in the region.
Meanwhile, Stephen Flynn - the leader of the SNP at Westminster - has claimed Labour’s plans will “destroy the livelihoods” of Aberdeen workers as it was warned thousands of jobs risk being lost.
Sir Keir Starmer hopes to raise an extra £10.8billion from the UK’s oil and gas industry by increasing and extending the windfall tax, with the funds invested in its green prosperity plan.
Should the party win the forthcoming election, Labour has proposed extending the windfall tax - first introduced by the Conservatives - until 2029 and will increase the levy on profits to 78%. The party also plans to slash investment allowances and ban the issuing of new North Sea drilling licences.
However, analysis released by investment bank Stifel estimates that the UK will lose £20billion in tax revenues, with up to 100,000 direct and indirect jobs at risk.
Concerns
Mr Flynn said: “These latest tax proposals from the Labour Party would destroy jobs, devastate Aberdeen, decimate the economy and demolish any hopes of delivering net zero.
“Not content with u-turning on their promise of £28billion and the investment required to deliver Net Zero, Labour now also want to destroy the livelihoods of the only people who can actually deliver it too.
“The real result of this Labour tax plan will see investment in nuclear projects in England that won’t benefit Scotland’s energy security, won’t protect Scottish jobs and won’t deliver for the Scottish economy.”
The SNP’s own stance on oil and gas has resulted in major splits within the party in recent years.
Former First Minister Nicola Sturgeon led a shift away from strongly supporting the fossil fuels sector, opposing development of the Cambo oil field.
Ex-Westminster leader Ian Blackford urged Rishi Sunak to impose a “proper windfall tax” on oil and gas firms.
But current leader Mr Flynn has repeatedly emphasised the need for the winding down of production to be gradual to help keep workers safe.
Aberdeen Tory MSP Douglas Lumsden said: “Stephen Flynn has a terribly short memory – or he hopes people in the north-east have forgotten SNP policy on oil and gas. The SNP at Westminster shouted and howled for a windfall tax that was far harder than the energy profits levy. This policy would give them exactly what they want.”
P&J 'Traitors' front page
The Press & Journal splash this morning depicts Sir Keir Starmer, Rachel Reeves, Ed Miliband and Anas Sarwar as cloaked 'Traitors'.
The graphic is in reference to a scathing editorial written by AGCC Policy Director Ryan Crighton bemoaning the current state of energy policy in the UK.
Here is the full editorial:
Heading to the north of Scotland to betray people in the pursuit of money and power has become very fashionable in 2024, thanks to ‘The Traitors’.
However, the back-stabbing stars of the hit television series have nothing on Labour, who just months after heading north to promise ‘no cliff-edge end’ to the North Sea oil and gas sector have delivered one of the biggest betrayals in Britain’s industrial history.
The party’s “proper” windfall tax – which will result in energy firms being levied at 78% for another five years – will wipe out 100,000 jobs, according to analysts, and cost the Treasury £20billion in lost revenue.
To put the devastating job toll in context, it was the axing of 20,000 jobs which sparked the miners’ strikes in 1984-85. This one policy will potentially wipe out five times as many.
Even for a party known to indulge in a bit of pre-election self-flagellation, this really takes the shortbread biscuit.
Labour – the party of workers and unions – happy to cast tens of thousands of hard-working men and women on the scrapheap and place a world class Scottish industry on death row.
It does not matter what your political persuasion is, a policy which costs 100,000 jobs is a bad one.
The fact that opposition parties cannot make political capital out of such a ruinous strategy highlights just how shambolic energy policy has become on these isles.
The SNP of old would be standing up for the tens of thousands of Scots now facing an uncertain future. The prospect of a Westminster government shutting down Scotland’s biggest industry would be election manna from heaven.
However, hamstrung by their ill-conceived presumption against oil and gas, and politically neutered by the Greens, Humza Yousaf has no moral high ground to occupy on this issue.
Neither do the Conservatives, who implemented the windfall tax in the first place and have since ignored multiple pleas to remove it, despite energy prices normalising over a year ago.
Based on the above, you can understand why the forthcoming General Election has paralysed investment in the North Sea. But that paused investment will become lost investment if Labour wins on this policy platform.
When we welcomed Sir Keir Starmer and Ed Miliband to Aberdeen in November, they looked us in the eye and told us they wanted to work with the energy industry to deliver a transition that leaves nobody behind.
They say they want to work in partnership with industry. But just like last summer, when they sprung plans for an exploration ban, this windfall tax extension has been done with zero engagement.
Right now, their energy policy is an absolute disaster, and they need to sit down with industry and re-write it from scratch if we are to retain any hope of remaining a global energy hub. As things stand, the UK is set to lose out on £40billion worth of investment between now and 2030.
Going forward, their policies must also reflect three key points; we need oil and gas, we need the people who produce it, and we need the companies who finance it.
Oil and gas will still be 20% of our energy mix in 2050 and a net zero scenario. And we need 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.
This is also about people – if you wind down the North Sea too quickly, before jobs and opportunities are available at scale in the renewables sector, then you lose the world class workforce and supply chain.
That will make what is already an enormous challenge even harder, perhaps impossible. We cannot allow that to happen.
And finally, you need energy companies to have faith to invest in the long-term future of the UK. That means working in lockstep with many of the companies currently producing oil and gas, because they are the ones who will invest the huge sums required to commercialise new technologies.
If Labour wants to win power, the party needs to prove to industry – and the public – that it can be trusted with our energy transition. The early signs are not good, and if we get this wrong the economic and social damage will be enormous.
Ahead of the 1992 General Election, there was a famous front-page headline which urged the last person to leave Britain to "turn out the lights" if Labour won the election.
This time around, the lights may go out themselves.
Ryan Crighton is policy director at Aberdeen & Grampian Chamber of Commerce