Reeves announced a 3% increase in the top rate of the energy profits levy — a.k.a. the North Sea windfall tax—bringing it to a staggering 78% and stretching its tenure to 2030. On top of that, she’s stripping away the investment allowances. This policy will carve out a £5-7 billion gap in the national accounts as the regime loses £2.2-6.2 billion in annual income, while still bearing the £2-3 billion yearly cost of decommissioning existing projects. Reeves, naturally, is happy to blame the Tories for the black hole in the books, yet conveniently sidesteps the fact that she’s busy digging a fresh one…
Labour’s sheer ignorance in this climate-crusader policy may be linked to their dubious choice of tax advisor, named by City A.M.: Heather Plumpton, a rainforest historian under the employ of the Green Alliance, a group bankrolled by Greenpeace, Friends of the Earth, and renewable energy firms. Back in 2022, Plumpton pitched, on behalf of the ideological climate lobby group, a proposal to ramp up North Sea taxes to Norwegian levels (78%), sans the generous investment incentives that make Norway’s steep rates somewhat bearable. Now Labour have taken it on. Guido can’t help but wonder the lefty outcry over ‘Government being bought by corporate interests’ if it were oil companies lobbying to raise taxes on renewable energy sources instead…
According to The Telegraph Ed Miliband has today issued an order to immediately ban all new oil and gas drilling. Bids for 35 areas were meant to be up for grabs, confirmed by the North Sea Transition Authority (NSTA), and assured to The Telegraph as soon as yesterday. Those have been kiboshed by Red Ed – losing millions in bid preparation in the process…
Industry representative Offshore Energies UK’s response is not a happy one:
“We remain deeply concerned that some of the new proposals being put forward for our industry will undermine the energy transition we all want to deliver. Labour’s leadership has recognised that North Sea oil and gas will be with us for decades to come and they have committed to managing this strategic national asset in a way that does not jeopardise jobs. They now need to deliver on their commitment to support our industry.”
Companies affected are said to be considering “legal action for damages” after wasting time and cash. Meanwhile the policy itself will pump up C02 emissions and lose the Treasury billions in revenue. No wonder Miliband is so keen…
UPDATE: DESNZ issues a response to The Telegraph:
“This piece is a complete fabrication – it invents meetings and decisions that have not taken place. As previously stated, we will not issue new licences to explore new fields. We will also not revoke existing oil and gas licences and will manage existing fields for the entirety of their lifespan.” So what will happen to the 35 new bidding areas?
