Scotland’s green energy industry has joined oil and gas firms to issue a plea for action to prevent mass job losses in the North Sea.
Scottish Renewables united with Offshore Energies UK (OEUK) to urge Chancellor Rachel Reeves and Net Zero Secretary Ed Miliband to stop Grangemouth-scale job losses before the energy transition has happened.
Among the measures they demanded is the replacement of the windfall tax on oil and gas profits, which they said could help safeguard 160,000 jobs and unlock £40billion of investment.
The unprecedented joint plea increases the growing pressure on the Labour government to act amid dire warnings that 400 jobs will go every fortnight between now and the end of the decade unless ministers change course.
In the letter to Ms Reeves and Mr Miliband, David Whitehouse, chief executive of OEUK, and Claire Mack, chief executive of Scottish Renewables, said: ‘Our energy future stands at a critical juncture.
‘Unless we slow the pace of decline in North Sea oil and gas while simultaneously accelerating the scale and speed of renewable energy deployment, we face a widening gap in jobs, investment and capability that will weaken our economy.
‘Ultimately, this will make the government’s energy ambitions harder to achieve, and cause long-term damage to our communities.’
They demanded that the energy profits levy is replaced in 2026.
The green energy industry is among the organisations that have issued a plea for action to prevent mass job losses in the North Sea
Rachel Reeves has been urged to ditch her perceived ‘hostility’ towards oil and gas sector
The controversial levy was introduced by the Conservative government then increased to 38 per cent by Labour and extended to 2030.
It results in an overall 78 per cent tax rate on oil and gas profits.
In their joint letter, Mr Whitehouse and Ms Mack said the tax ‘risks accelerating the decline of the North Sea industry and the wider supply chain, with direct consequences for jobs and the economy’.
They said replacing it with a more supportive measure would be ‘a welcome act of economic pragmatism’ and could unlock £40 billion of investment and provide ‘greater energy security’.
They also demanded investment in offshore wind and increase the scale and pace of job creation, and called for intervention in the energy industry ‘to prevent industrial and employment gaps, as illustrated by the situation at Grangemouth’.
Mr Whitehouse and Ms Mack said: ‘The UK has a generational opportunity to lead a new wave of industrialisation rooted in clean energy, advanced manufacturing and regional regeneration.
‘But this will only be realised if government policy actively supports the conditions for growth. Grangemouth stands as a stark warning of what happens when intervention comes too late.
‘This isn’t a question of oil and gas or renewable energy – it’s about securing the energy future of this country.’
Ed Miliband’s ban on new licences is being blamed for ‘risking’ tens of thousands of jobs
Scottish Conservative energy spokesman Douglas Lumsden said: ‘It speaks volumes that organisations across the energy industry have joined forces to urge Rachel Reeves to finally ditch her hostility towards the oil and gas sector.
‘The extension of the Energy Profits Levy and Ed Miliband’s ban on new licences is risking putting tens of thousands of workers on the scrapheap and driving away crucial investment.
‘The desire of both Labour and the SNP to turn off the taps in the North Sea is an act of national self-harm.
‘With even those in these sectors urging Rachel Reeves to change approach in her Budget, she cannot ignore these warnings any longer.’
In the Commons yesterday (TUE), Exchequer Secretary Dan Tomlinson said: ‘At the Budget, we will be setting out clearly our proposals for the future of the energy profits levy and the oil and gas mechanism.
‘We will make sure that we can provide the certainty to business on the future regime as soon as we can.’
Tory Shadow Scottish Secretary Andrew Bowie said: ‘There is only one successor to the energy profits levy that will protect Scottish jobs and that is dismantling it completely.’
A UK government spokesman said: ‘We are taking a responsible approach that recognises the long-term role of the sector while exploring what follows the end of the Energy Profits Levy, so firms continue to invest and pay their fair share of tax.
‘The oil and gas sector will be with us for decades to come, as we deliver a fair and orderly transition in the North Sea to drive growth and secure tens of thousands of skilled jobs, with the biggest ever investment in offshore wind and first of a kind carbon capture and storage clusters.’