UK government plans to end North Sea windfall tax

Wednesday 05 March 2025 5:50 pm

British oil and fuel drillers may face a brand new tax regime following the vitality disaster, which pegs levies to fluctuations in world oil and fuel costs.

The mechanism is meant to exchange the infamous “windfall tax” and was outlined in a session on the North Sea printed on Wednesday.

The session additionally seeks to unravel laws launched by the Labour authorities banning new oil and fuel licences within the North Sea.

The windfall tax calls for a further 38 per cent levy on earnings from oil and fuel and was launched when vitality costs soared within the wake of Russia’s invasion of Ukraine in 2022.

It’s seen as controversial within the sector, which argues its sudden introduction undermined investor confidence. Critics imagine tying the speed to vitality costs would create a extra predictable tax regime.

The Division for Vitality Safety and Internet Zero (DESNZ) mentioned the brand new plans would ship a “honest return for the nation throughout occasions of unusually excessive costs.”

It comes after the UK authorities conceded plans for the Rosebank and Jackdaw oil and fuel fields off Shetland had been inexperienced lit unlawfully, following a Excessive Courtroom verdict in January.

The Vitality Secretary, Ed Miliband, mentioned: “The North Sea can be on the coronary heart of Britain’s vitality future. For many years, its employees, companies and communities have helped energy our nation and our world.

“Oil and fuel manufacturing will proceed to play an vital function and, because the world embraces the drive to wash vitality, the North Sea can energy our plan for change and clear vitality future within the many years forward.”

Unions have put up fierce opposition to Labour’s plans to ban new licenses within the North Sea.

Unite normal secretary Sharon Graham mentioned: “Unite has been calling for the federal government to supply a concrete plan with actual jobs for the transition of North Sea employees because it was elected. This session might be a step in the appropriate route, however it have to be greater than a speaking store. 

“We urgently want funding in wind manufacturing and different inexperienced applied sciences to create the nicely paid, extremely expert jobs that are commonly promised however hardly ever delivered.

“Till that occurs, we’d like to withstand any calls that quantity to offshoring our carbon tasks for the sake of advantage signalling. We should not let go of 1 rope earlier than we’ve got maintain of one other”