Industry proposal delivered to Treasury sets out multibillion investment plans – if Chancellor delivers windfall tax changes this budget.
Offshore Energies UK (OEUK) has set out plans to deliver a £137 billion economic boost and safeguard 160,000 jobs, calling on Chancellor Rachel Reeves to use next month’s Budget to reform the windfall tax.
The leading trade body for the UK’s offshore energy sector has said it will accept Treasury proposals for a reformed permanent profits-based mechanism if the changes are delivered in 2026.
OEUK wants the reform brought forward to 2026 to halt decline, protect jobs and restore investor confidence through a new blueprint shared with ministers.
The organisation warns that time is running out to stem a slow erosion of industrial and supply chain capability, with companies saying that waiting until 2030 for reform would be too late to prevent lasting damage. Industry has thrashed out a proposal to put to the Chancellor which it says will unlock more spend, tax and jobs from the sector than current plans which could shut the North Sea down prematurely.
With less than six weeks until the Chancellor unveils her tax and spending plans, OEUK says early reform is essential to secure investment, safeguard jobs and strengthen the UK’s homegrown energy future, arguing that the choice is not between growth and climate ambition but how to deliver both.
Under OEUK’s formal proposals to government, over £40 billion of new investment could deliver £137 billion in economic value, supporting thousands of skilled jobs across the country and generating significant tax revenues for public services.
David Whitehouse, Chief Executive of Offshore Energies UK, said:
“This is a crucial moment for securing the future of the North Sea and the UK’s energy system.
“Decisions made in the coming weeks will determine whether we keep investment and jobs here or lose them overseas.
“The windfall tax is costing jobs and investment and reducing the tax revenues that support families, communities and vital services across the UK.
“Today we have shown there is another path – one that restores confidence, secures long-term investment and anchors the skills and supply chain needed to deliver the UK’s energy transition.
“We are asking the Chancellor to back our approach. In return, we will boost UK growth, tax revenue and jobs and underpin the UK’s climate ambitions.
“This is about investing in homegrown energy over imports. This is about supporting communities and jobs.”
In a detailed submission to the Treasury, OEUK warns that uncertainty in the North Sea is already rippling through the UK’s industrial heartlands – from Grangemouth to Humberside – and says action is needed now to prevent further loss of capability.
OEUK represents more than 450 companies across oil and gas, offshore wind, carbon capture and hydrogen, supporting around 200,000 people nationwide.
Its submission to the Chancellor sets out an industry proposal to government to:
• Replace the windfall tax in 2026 with a permanent, profits-based mechanism aligned with the Treasury’s 2025 consultation.
• Deploy committed funding for carbon capture, hydrogen and offshore wind projects.
• Reform electricity transmission and network charges to unlock clean power and growth.
In return, the sector will:
• Boost UK economic growth: Add £137 billion to the UK economy by 2050.
• Invest in the UK’s energy future: Secure over £40 billion of new investment.
• Pay more tax, not less: Deliver £12 billion in additional tax receipts by 2050.
• Safeguarding 160,000 jobs by 2030
OEUK warns that without timely reform, the UK will continue to lose around 1,000 jobs a month as decline accelerates and investment flows overseas.
The Office for Budget Responsibility has cut expected Energy Profits Levy revenues from £41.6 billion in 2022 to £17.4 billion in its latest forecast — further evidence, OEUK says, that the measure is no longer delivering for government or industry.
Photo: OEUK Chief Executive David Whitehouse
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