Britain’s energy backbone is at risk of crumbling unless the government fixes its tax policy.
Offshore Energies UK (OEUK) has warned that thousands of jobs are being lost and investment is draining away because of the government’s windfall tax.
In a letter backed by more than 110 companies, Offshore Energies UK (OEUK) says the Energy Profits Levy (EPL) is “not working for government, industry or consumers” and must be replaced by a fair, permanent tax regime by 2026.
Right now, the sector is shedding 1,000 jobs every month.
These are not just offshore roles but the engineers, technicians and manufacturers across the supply chain – from Shetland to Humberside and down to Cornwall – who design, build and maintain the UK’s energy infrastructure.
Steve Nicol, OEUK’s Supply Chain Champion and Executive President of Operations at Wood, said the situation is now critical:
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.”
The industry says the EPL, introduced in 2022, was meant to raise billions from record profits during the energy crisis.
Instead, revenue projections have collapsed. The Office for Budget Responsibility has cut its forecast from £41.6bn to just £17.4bn – less than half the amount ministers expected.
OEUK argues that if the tax is reformed as proposed, the industry could inject £137bn into the UK economy by 2050, generate £41bn of new investment and support 23,000 additional jobs by 2030.
It would also deliver £12bn more in tax receipts.
The warning comes as companies increasingly shift operations overseas to survive. Many operate “multi-revenue” models, where oil and gas earnings fund renewables such as hydrogen, offshore wind and carbon capture.
Fiscal uncertainty, the group says, is destroying that balance.
“Our businesses and manufacturing bases stretch from Grangemouth to East Anglia,” the letter says. “Since we first warned ministers last year, the situation has deteriorated further. Thousands more jobs have gone and each week brings more cuts as firms move resources abroad.”
OEUK insists that a stable, long-term tax regime is vital to protect energy security, investment and growth.
Without it, Nicol warns, the UK faces a future where “the resilience and competitiveness of our entire energy supply chain” is lost – along with the skilled workers needed to build Britain’s low-carbon future.
Energy Profits Levy is killing the energy sector appeared first on Energy Live News.