The Energy Profits Levy (EPL), a controversial tax on the UK North Sea oil and gas industry, was extended until 2030 in the 2024 Autumn budget by the new Labour government, which also imposed restrictions on new exploration licences. Despite this manifesto commitment, the GMB trade union suggests there is political scope for the government to scrap the EPL this year, acknowledging the difficult optics of raising taxes on the industry while working people face financial pressures.

Industry Impact and Job Losses

The introduction of the EPL in 2022 has led to a severe cratering of investment in the UK North Sea, contributing to mass job losses across operators like Harbour Energy, Repsol, and BP. The situation is projected to worsen, with Robert Gordon University estimating the equivalent of 1,000 jobs could be lost every month through 2030 if government policy remains unchanged. The GMB criticizes the government for not taking these job loss concerns seriously enough, highlighting the disparity between actual job losses and the promised "mythical" clean energy jobs that often fail to materialize as planned.

Critique of Transition and Industry Lobbying

The transition of workers from oil and gas to clean energy jobs is seen as inadequate. A report warns that regions like Aberdeen, where one in twenty people work in oil and gas, will be disproportionately affected, with the local workforce on a "cliff edge" due to a lack of available clean energy roles. The government's North Sea Skills passport initiative has been criticized as ineffective. Furthermore, the GMB notes that the oil industry itself has hampered its cause through ineffective lobbying, likening its repeated warnings on taxation to "the boy who cried wolf," which has eroded trust with the government. This lost trust is echoed by industry executives, who note a pivot of investment away from UK waters.

Broader Energy Policy Context

The GMB supports the government's net zero emissions targets but argues that "net zero does not mean zero," emphasizing that the UK will require oil and gas for decades to come. The union contends it is nonsensical to leave domestic resources undeveloped, resulting in lost tax receipts and job opportunities, while ultimately relying on imports. The EPL is scheduled to be replaced by a price shock mechanism in 2030, but only if commodity prices do not fall below a certain threshold before then.