Government plans to increase the windfall tax on North Sea oil and gas firms could place thousands of jobs at risk, industry members have warned.
Some £200 billion of investment in both domestic renewable and fossil fuel projects would be threatened by the plan, industry body Offshore Energies UK (OEUK) said on Thursday.
This comes after Chancellor Rachel Reeves unveiled plans to lift windfall taxes on oil and gas company’s profits from 75% to 78% and extend the levy to 2030.
She has also set out to target tax breaks for the industry, which has been able to claim back the majority if expenditure on new projects and infrastructure investments.
“For our companies, this surprise risks operators - big and small - further scaling back or postponing their investment plans in response,” OEUK wrote in an open letter.
“The ramifications will be felt throughout the supply chain, through jobs, and the communities this industry supports, both directly and indirectly.”
OEUK chief executive David Whitehouse added that the supply chain accounted for most of the 200,000 jobs supported by the industry.
Some 40 companies signed the letter, including FTSE 250-listed engineering firm John Wood Group PLC (LSE:WG.).
A Treasury spokesperson responded: “We are extending and increasing the Energy Profits Levy, and closing its core investment allowance, to ensure oil and gas companies contribute more towards our clean energy transition.”
They added the government would work to ensure the energy transition did not “jeopardise workers,” adding the formation of Great British Energy would create “thousands of jobs”.