The incoming government must listen to energy industry concerns about the UK’s fiscal regime and licences for domestic oil and gas production if it is to deliver a successful energy transition, says David Whitehouse, chief executive of Offshore Energies UK.
In a message to members on the eve of tomorrow’s general election, Whitehouse has warned that mismanaged energy policy leading to lack of investor confidence will threaten the decarbonisation of the UK economy.
If the new government gets it right, he says: “Decarbonisation of the UK economy can be one of the greatest opportunities of our time, with the potential to create wealth across every community in the UK.”
But he warned: “Details matter. Labour Party policies, poorly managed and delivered without industry input, could spell chaos for employment in this industry at a time when there are already concerns about the economy.”
His message to the 400-plus energy companies operating in oil, gas, wind and hydrogen production as well as carbon capture, points out that today’s UK offshore energy industry supports 200,000 jobs and says the Labour leadership must deliver on its assurances to engage with industry on how to manage the UK’s energy transition.
“Many of those working directly for producers and the wider supply chain are highly skilled. These people are mobile talent, and we need to keep them here or risk losing them to other countries, slowing down our transition at the benefit of others,” he says.
“We have the future offshore energy industry right here on our doorsteps. From Newcastle to Cardiff to Aberdeen, these people deserve to be part of decisions impacting this industry.
“The UK’s national debt currently stands at 100% of annual national income, the highest level seen in sixty years. The UK spent a net £42 billion importing oil and gas last year. We need policies that attract private investment, and not deter it. We should choose to prioritise homegrown energy production.”
READ BELOW THE FULL TEXT OF THE MESSAGE TO MEMBERS FROM DAVID WHITEHOUSE OEUK CHIEF EXECUTIVE:
The UK offshore energy industry has much to offer the next party of government, but currently stands with the most to lose. Apprehension about the future of oil and gas, wind and the offshore energy sector overall in the UK is already disrupting investment. Recent months and weeks have shown the extent of concerns, with companies, trade unions and former politicians speaking out in favour of a pragmatic approach.
Keir Starmer, Rachel Reeves and Ed Miliband have committed to meet with the sector and I welcome that. There must be meaningful engagement on policies which directly impact our companies and people.
To calm the waters and deliver economic growth, whichever party forms the next government must come good on promises to engage and listen to our concerns on the fiscal regime and oil and gas licences.
Every political party has put economic credibility and growth at the heart of its election strategy. For whichever party becomes the next government, the choices – and consequences of those choices – are clear.
We can make the most of UK companies, infrastructure and people to drive a homegrown energy transition or take a path that increasingly relies on others. To grow the economy and reach net zero in a way that leaves no one behind, OEUK has pressed all parties to choose a homegrown energy transition.
The decarbonisation of the UK economy can be one of the greatest opportunities of our time, with the potential to create wealth across every community in the UK if we get this right. But mismanaged policy and lack of confidence risks undermining this.
Today UK offshore energy companies support 200,000 jobs. Many of those working directly for producers and the wider supply chain are highly skilled. These people are mobile talent, and we need to keep them here or risk losing them to other countries, slowing down our transition at the benefit of others. We have the future offshore energy industry right here on our doorsteps. From Newcastle to Cardiff to Aberdeen, these people deserve to be part of decisions impacting this industry.
Details matter. Labour Party policies, poorly managed and delivered without industry input, could spell chaos for employment in this industry at a time when there are already concerns about the economy.
The UK’s national debt currently stands at 100% of annual national income, the highest levels seen in sixty years. The UK spent a net £42 billion importing oil and gas last year. We need policies that attract private investment, and not deter it. We should choose to prioritise a homegrown energy transition. From public borrowing to national expenditure, demands on Treasury are and will continue to be significant. There is no resilience on the Chancellor’s balance sheet, and people are struggling too. The only way the next government can grow the economy and not just manage the economy, is through partnership with the very industries based here and committed to delivering net zero.
A thriving economy is the bedrock for a homegrown energy transition, with the lion’s share of the £1.4 trillion needed to achieve net zero expected to come from private companies.
Fiscal certainty, competitive returns, and long-term commitments by policy makers across the energy landscape will be key. Any future government must look again at overly regulated markets and punitive tax regimes that restrict this.
But why does any of this matter to voters? Put simply, this industry is set to invest £200bn by the end of this decade in wind, hydrogen, carbon capture and the oil and gas we will continue to need during this time.
We can choose to retain that investment here with all the benefits that brings in taxes paid, jobs supported and growth to the economy, or we can choose to increasingly rely on others with none of the benefits of an industry anchored here in the UK.
Decisions made by politicians in the coming weeks will be felt for decades to come. They will shape the future of our economy and energy security. These decisions must be done in partnership with people, communities and sectors involved and not done to them.
This industry can grow the economy, support jobs, cut emissions and realise a homegrown energy transition. The opportunities are inspiring, and we need industry to feel optimistic about its potential.
That optimism can only begin by seeing the next government turn words into pragmatic and supportive action.
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