Labour’s plans for the oil and gas industry could see the UK “move towards being uninvestable”, the sector’s biggest trade body has said.
In a briefing for journalists, OEUK said the sector was facing “big challenges” over licensing and taxation.
“We have uncertainty on future licensing policy,” said Ross Dornan, the body’s marketing intelligence manager.
“We’re seeing tax changes, with further tax changes being proposed by Labour if they’re to be elected.”
He added: “This all comes together with some other challenges too to make it a really difficult investment environment in the UK.”
Specifically on taxation – with Labour pledges including to not only keep the extension of the windfall tax to 2029 in place but increase the rate from 75% to 78% if it wins the keys to Downing Street – Mr Dornan said: “We’ve seen four tax regimes in two years and we’ve seen further changes proposed by Labour aimed at increasing the headline rate of tax and cutting allowances.
“I think this would really make the UK move towards being uninvestable, from a number of fronts.”
His comments come as the body released a report saying there could be as much as £450 billion of investment in the energy sector up to 2040.
But OEUK chief executive David Whitehouse said investors need “stability, predictability and fair returns”.
He said: “We are in a global race for investment, and UK energy companies need supportive long-term policies, a stable tax regime, and responsible rhetoric from all sides.
“We’re facing a situation where we must import energy that could have been produced here and where we must rely on supply chain companies that could have been based here.
“The UK’s world class oil and gas sector has reduced emissions by 24% since 2018 and we must build our low carbon future on this achievement.”
Labour and OEUK held emergency meetings in recent months following concerns from industry about the policy of a potential Labour government.
Asked about the meetings, the body stressed it was apolitical and wanted to relay industry concerns about Labour proposals, with Mr Dornan highlighting the need for “stability, predictability, competitiveness across the board”.
A Labour spokesperson said: “After 14 years, the Government is still not on track to meet it’s clean power targets.
“Britain cannot afford five more years of Rishi Sunak’s inaction.
“The Conservatives have blocked onshore wind, crashed the market for offshore wind, stalled on energy efficiency, and failed to tackle an out-of-date planning system that has meant holding back over £200 billion of private sector investment.
“We have been consistent that a proper windfall tax means raising the rate of the windfall tax to match the rate in Norway, abolishing the investment allowances inside the windfall tax, and that these changes account for the vast majority we would raise from a windfall tax.
“Our windfall tax will only apply while there are windfall profits being made.
“This is fair and proportionate.
“Labour will work with the industry to match their ambition for Britain.”
“Labour’s plan to switch on GB Energy will cut energy bills for good and create jobs all across Britain’s industrial heartlands.
“Through investing here in Britain, we will make Britain a clean energy superpower with cheap and secure energy and freeing ourselves from the manipulations of Vladimir Putin and petrostates.”
Energy Security Secretary Claire Coutinho said: “Sir Keir Starmer’s energy promise is a race to the bottom that will put Britain’s energy security at risk. Despite industry sounding the alarm, Labour are happy to send jobs abroad and sacrifice investment for the sake of ideology.
“Labour have doubled down on their unfunded 2030 spending promise which now experts calculate would cost far more than £28 billion.
“Labour cannot say how they would pay for it because they do not have a plan, taking people back to square one with higher taxes.
“Only Rishi Sunak and the Conservatives will stick to the plan, growing the economy whilst reaching net zero in a pragmatic and responsible way that doesn’t saddle families with extra costs.”
