Offshore Energies UK (OEUK) has sent a letter, co-signed by more than 110 companies, to the new minister of industry at the Department for Business and Trade, Chris McDonald, urging the government to remove the energy profits levy.
OEUK said that without a permanent replacement for the temporary levy, the nation risks losing thousands more jobs, billions in investment, and critical supply chain capability essential for the UK’s energy security and transition.
Steve Nicol, executive president of operations at Wood, told the government to work with the industry and implement a competitive, permanent tax regime from 2026, as outlined in the Treasury’s 2025 oil and gas price mechanism consultation.
OEUK claimed that the energy profits levy isn’t working for the government, industry, or consumers. The Office for Budget Responsibility has revised down its forecast of revenue from the levy from £41.6bn ($55.8bn) in November 2022 to £17.4bn ($22.3bn) in its latest outlook. This covers the period 2022-23 to 2027-28. This is less than half what was forecast.
The trade association has also warned that under the current fiscal regime, the industry is losing 1,000 jobs a month.
However, OEUK believes that if the government were to reform the tax code in line with its proposals, it could add £137bn ($183.8bn) to the economy by 2050, secure £41bn ($55bn) of extra investment in UK energy by 2050, support 23,000 additional jobs by 2030, and unlock £12bn ($16.1bn) in additional tax receipts by 2050.
The organisation said in its open letter that it previously sent a letter, endorsed by 42 companies, to McDonald’s predecessor with a warning of the state of the industry. The situation, OEUK said, has only “deteriorated further, with thousands more jobs lost across the sector.”
“[…] 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,” the trade association explained.
OEUK concluded by saying that the accelerated decline in activity is undermining the value of the sector and that job losses are occurring at an “unacceptable scale”, and that there was an urgent need for “supportive policy to unlock investment, drive economic growth, and safeguard the UK’s energy transition”.
