Home World Windfall tax 'will result in job losses', vitality business warns

Windfall tax 'will result in job losses', vitality business warns

Windfall tax 'will result in job losses', vitality business warns

A windfall tax “will bring about job losses”, the vitality business has warned.

Deirdre Michie, chief govt of Offshore Energies UK, which represents the offshore oil and fuel business, mentioned their provide chain is “really worried” concerning the implications of a windfall tax, which is anticipated to be introduced in the present day.

“That will directly impact manufacturing in this country,” she mentioned.

“It will undermine our supply chain, and it will bring about job losses.”

Windfall tax solely equals £60 for each family – dwell updates

Ms Michie mentioned “we need to wait to see what the details are”, however added: “This isn’t feeling good, to have this unexpected surprise on a sector that has been committed to working positively with the government on the security of energy supply and on the energy transition.”

She mentioned historical past exhibits {that a} windfall tax “doesn’t work” as a result of it undermines funding.

“If we don’t have investment, we don’t have new projects coming through, production in the sector will drop off a cliff by 2030 – at a time when we need to ensure that we have enough oil and gas to satisfy the demands that the country will still require going forward, rather than having to increase costly inputs, which also have, ironically, a higher emissions footprint,” she mentioned.

But she defended will increase in earnings amongst vitality firms, saying “they come on the back of two years of significant losses by this sector”, pointing to the impression of COVID-19.

“At a time when the country needs to really focus on its security of energy supply and the energy transition, we have been arguing for stability and predictability in terms of the fiscal regime that is working,” she added.

“It is generating significant returns for the Treasury that they can then use to address the consumer crisis, but at the same time, can give the kind of investor confidence that’s needed to keep investing in oil and gas and underpin the energy transition.”

Read extra: What’s a windfall tax, how a lot do oil firms already pay, and has the UK tried it earlier than?

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Why costly vitality impacts every thing

A windfall tax is a one-off tax imposed by a authorities that targets companies which have benefited from one thing they weren’t accountable for – also called a windfall.

In the case of vitality firms, they’re reaping the advantages of sky-high costs partly as a result of demand has elevated because the world emerges from the pandemic and resulting from provide constraints following sanctions imposed on Russia after its invasion of Ukraine.

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The UK is predicted to implement such a tax and use the proceeds to assist folks fighting hovering vitality payments, following within the footsteps of Italy and Spain.

Reports prompt the prime minister and chancellor have been cut up on whether or not to introduce a windfall tax, amid rising stress from Labour to take action.



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