Labour’s ban on new North Sea oil and gas will create a £4.5billion black hole in the public finances that will have to be filled by higher taxes, the Energy Secretary has warned.
Writing in The Telegraph this morning, Claire Coutinho has accused Sir Keir Starmer of planning to take Britain “back to the dark ages” with his net zero plan to phase out domestic production.
Tory analysis has claimed that the ban would lead to lost tax takings of £4.5billion over the next 10 years and £12.4billion in total as North Sea production dwindles.
She has branded the plans “a spectacular act of economic self-harm” that would leave the UK “colder and poorer”.
The Energy Secretary said the cash would have to be recouped by hiking other taxes while the policy led to “increased reliance on foreign imports, lost jobs, and even blackouts”.
She wrote: “It would be a triumph of ideology over common sense. Exporting jobs for the sake of importing virtue signalling. The choice is clear.
“Labour’s proposals will destroy jobs, raise taxes and hike up your bills. In a truism of all Labour governments – once they have run out of money, they will come for yours.”
Labour dismissed the claims as “desperate nonsense” and said its plans to invest in renewable energy production would lower bills for households.
The party will today set out how it aims to wean Britain off fossil fuels by creating 650,000 new jobs – many in green technology – in former industrial heartlands.
Meanwhile, oil and gas executives have warned Labour’s pledge to axe North Sea tax allowances threaten their investments in the basin, with several projects already put on hold.
Extraction companies have not drilled a new well in the area this year, according to the Financial Times, as the sector waits to see what tax regime it will face after the election on July 4th.
“You need to make a return of 15% to 20% to even get out of bed, frankly,” said David Latin, chair of Aim-listed extractor Serica.
“Under the new regime they won’t pay back at all. It is not likely you will cover your cost of capital, you won’t get anywhere near it.”