The UK Government is today facing mounting pressure from business leaders, unions and international allies to reverse policies blamed for driving North Sea oil and gas into decline.
Sir Jim Ratcliffe’s Ineos has warned that up to 200,000 UK jobs are at risk unless Westminster changes course on what it called “ruinous energy policies”.
Marking 50 years of the Forties Pipeline, the company accused the government of “squandering the legacy” of North Sea oil and gas, saying the Energy Profits Levy and the ban on new exploration were deterring investment and undermining energy security.
The warning comes as new analysis shows that no new exploration wells have been drilled in UK waters this year - the first time since 1964.
By contrast, Norway has drilled 30, highlighting how policy differences rather than geology are driving the collapse in activity. Industry body Offshore Energies UK said the current tax regime and uncertainty over future licensing are costing around 1,000 jobs a month.
International voices are now joining the calls for change. Donald Trump’s ambassador to London, Warren Stephens, said the UK should “scrap its ban on extracting new oil and gas” if it wants to remain a strong ally to the United States.
He described the current policy as “incorrect”, urging the government to use domestic resources rather than import energy from abroad.
The debate over Britain’s energy future is intensifying ahead of the autumn budget on November 26. Chancellor Rachel Reeves is expected to outline a new North Sea strategy and could move to scale back the windfall tax earlier than planned.
However, industry leaders warn that unless decisive action is taken soon, the UK risks permanent damage to its energy supply chain, workforce and fiscal base.
Russell Borthwick, Chief Executive at Aberdeen & Grampian Chamber of Commerce, said: “More than three years after it was introduced as a temporary measure, the Energy Profits Levy has become a self-defeating policy. It is deterring investment, shrinking the tax base, and accelerating the decline of the North Sea. The result is fewer jobs, lower revenues and greater reliance on imported energy with four times the carbon footprint of our own.
"The government now has a clear choice - continue down a path that makes the UK poorer and weaker, or act decisively to restore competitiveness, attract investment and protect the skilled workforce and supply chain needed to deliver the energy transition.
"Removing the windfall tax and replacing the blanket ban on new licences with a policy that considers demand and emissions would strengthen energy security, sustain employment and unlock billions in additional revenue for the Treasury.”