By Patrick Tooher, Consultant City Editor For The Mail On Sunday
21:56 16 Jul 2024, updated 00:23 17 Jul 2024
Up to 100,000 jobs are at risk if Labour presses ahead with its attack on oil and gas drillings in the North Sea, business chiefs have warned.
Investment worth £30billion and tax receipts totalling £20billion could also be lost by 2029, according to the Aberdeen Chamber of Commerce.
The energy sector was already reeling from a windfall tax introduced by the Tories after Russia’s invasion of Ukraine sent bills soaring.
But Labour’s plans to raise the levy from 35 per cent to 38 per cent and scrap tax breaks on profits that are reinvested in fossil fuel production are causing alarm.
The Government has also said drilling licences for new oil and gas fields will not be issued.
Critics fear the increasingly hostile environment will result in oil and gas firms fleeing overseas, hitting energy supplies and tax receipts.
The Aberdeen Chamber of Commerce said the plans risked an ‘open revolt’.
Warning that ‘our path to net zero could look more like a road to nowhere’, the group’s chief executive Russell Borthwick added: ‘Confidence is at rock bottom.’
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The 100,000 energy jobs under threat are across the UK, but they are concentrated in the north-east of Scotland and Aberdeen in particular.
Fear about Labour’s North Sea plans rose last week when it was forced to deny reports that Energy Secretary Ed Miliband had overruled officials and banned regulator Ofgem from issuing any new drilling licences, including those in their first round of approval.
His department later clarified that licences for new fields will not be issued, but existing ones would not be revoked and fields already operating would be managed for the entirety of their lifespan.
The confusion came as Labour races ahead with plans to meet its target of zero-carbon electricity by 2030.
Experts say that if the transition to renewables is poorly handled it could lead to a ‘hard stop’ to investment – with dire consequences for the 200,000 jobs in the oil and gas sector, not just in Aberdeen but across the UK.