Offshore Energies UK (OEUK) has issued a warning to the UK Government that without a permanent replacement for the temporary Energy Profits Levy (EPL), the UK risks losing thousands more jobs, billions in investment, and critical supply chain capability essential for energy security and transition.
In a letter co-signed by more than 110 companies to Chris McDonald MP, the UK government’s new Minister for Industry, OEUK’s Supply Chain Champion, Steve Nicol, Executive President, Operations, at Wood, has led a call to Government urging them to work with industry and implement a competitive, permanent tax regime from 2026, as outlined in the Treasury’s 2025 oil and gas price mechanism consultation.
“OEUK is making the case that the Energy Profits Levy isn’t working for government, industry or consumers,” said OEUK.
“The Office for Budget Responsibility (OBR) has revised down its forecast EPL revenue from £41.6bn in November 2022 to £17.4bn in its latest outlook. This covers the period 2022-23 to 2027-28. This is less than half what was forecast.
“OEUK has also warned that under the current fiscal regime industry is losing 1,000 jobs a month.”
OEUK said if the tax is reformed as its proposes, the sector can:
- Add £137 billion to the economy by 2050
- Secure £41 billion of extra investment in UK energy by 2050
- Support 23,000 additional jobs by 2030
- Unlock £12 billion in additional tax receipts by 2050
“The impact of the tax on investment and jobs is being felt by the sector’s supply chain, the ecosystem of companies of all sizes across the UK that design, build and service everything from wind farms and hydrogen plants to oil and gas platforms and carbon capture projects and the networks connecting them,” said OEUK.
“It includes operations and maintenance companies, catering firms, and specialist high tech manufacturers – from Shetland and Orkney, Inverness and Grangemouth, to Humberside and Teesside, East Anglia and the North West, and all the way down to Cornwall.
“Many companies in the sector operate ‘multi-revenue’ models, progressing oil and gas and renewables in tandem.
“Stable cash flow from oil and gas underpins investment in emerging opportunities such as floating offshore wind and carbon capture and storage (CCS).
“The support of MPs for a predictable fiscal environment is crucial, says OEUK, to anchor these businesses in the UK and deliver energy security and economic growth as firms build the UK’s low carbon, high growth energy future.”
The open letter says:
“Our businesses and manufacturing bases are located throughout the length and breadth of the country, across sectors and into Grangemouth, Humberside, Teesside, Tyneside, East Anglia, the North West and down to Cornwall.
“Just over a year ago, we wrote to your predecessor – a letter endorsed by 42 companies – clearly warning of what was at stake for our industry. Since that time, the situation has deteriorated further, with thousands more jobs lost across the sector.
“The challenges have only intensified, as each week brings news of additional companies being forced to reduce their workforce and shift resources abroad to remain viable. These ongoing losses not only affect our employees but also threaten the resilience and competitiveness of the UK supply chain as a whole.
“We are witnessing an accelerated decline in activity that is undermining the value of the sector and the supply chain capability we need for our energy future. Job losses are occurring at an unacceptable scale, and there is an urgent need for supportive policy to unlock investment, drive economic growth, and safeguard the UK’s energy transition.”