The announcement was made alongside a drastic cut in Labour’s overall spending plans, which saw a long-standing target of reaching £28 billion in annual green investment finally ditched following weeks of speculation.
To help pay for its new pledge of a £23.7 billion uplift in green spending over five years, the party said it would increase the rate of the government’s existing windfall tax from 75 to 78 percent and would extend the levy by a year, to 2029.
But oil and gas companies are particularly concerned by plans to close what Shadow Chancellor Rachel Reeves called “loopholes” in the existing windfall tax. Industry figures are concerned that this means Labour would scrap an “investment allowance” which currently allows oil and gas producers to get 91p in tax relief for every £1 they invest in U.K. operations.
OEUK said scrapping the tax relief measures would likely result in no new investments being made into the U.K.’s oil and gas industry and estimated that the plans could imperil thousands of jobs and cost the U.K. £26 billion in “economic value.”
“With no new investment, 42,000 jobs will go, and we could start to see the effects as early as this year,” said Whitehouse. “These are not faceless numbers but decent, hard-working people working across the U.K. to provide the energy we will need today and in the future.”
The industry group — formerly known as Oil and Gas UK — is demanding an “urgent” meeting with Labour to clarify the party’s plans.
