Oil and gas industry will be 'taxed to death' as pleas to remove levy ignored

Chancellor removes restrictions on drilling but energy profits tax remains

- BY BEN BORLAND

THE UK’s oil and gas industry faces being “taxed to death inside five years” after Rachel Reeves ignored pleas to axe the Energy Profits Levy (EPL).

The Chancellor did relax restrictions on new drilling in the North Sea by approving a “tieback” policy that allows new licences to be granted for existing fields.

But industry leaders and political critics had been pushing hard for the windfall tax of 78% to be phased out earlier than 2030, with research from Robert Gordon University in Aberdeen warning that about 1,000 jobs a month are being lost.

In a bitter blow, Rachel Reeves didn’t even mention the EPL in her Budget and instead opted for what one business figure described as a “cliff-edge end to North Sea production”.

Russell Borthwick, chief executive at Aberdeen & Grampian Chamber of Commerce, said: “The UK Government has accepted, through its announcement on tiebacks, that its policy towards a sustainable future for the North Sea is completely and utterly flawed, risks terminal damage to the UK’s energy security and is proving economically ruinous.