Kalani Tharanga, JadeTimes Staff
D.W.G. Kalani Tharanga is a Jadetimes news reporter covering Political Blogs.
Threat to Investment and Jobs
The UK's oil and gas industry has raised serious concerns over the government's plan to increase the windfall tax on energy companies, warning it could have severe repercussions for the economy. Offshore Energies UK (OEUK) cautioned that the proposed hike in the Energy Profits Levy (EPL) from 35% to 38% could lead to a sharp decline in investment in the sector, potentially costing the UK economy £13 billion between 2025 and 2029. The industry body estimates that this reduction in investment could put 35,000 jobs at risk by 2029, particularly as the North Sea oil and gas operators already face a total tax rate of 78% on profits from November. David Whitehouse, OEUK's chief executive, stressed that the policy, intended to spur economic growth, might instead hinder the sector’s ability to contribute positively to the UK’s economy.
Industry Confidence Wanes
In the broader context of the UK’s business environment, confidence among industry leaders has been shaken by discussions of tax increases and stricter employment rights. The Institute of Directors (IoD) reported a sharp decline in its Directors' Economic Confidence Index in August, following a brief surge in July. This drop reflects growing concerns over the government’s policy direction, particularly in light of Prime Minister Sir Keir Starmer’s warning of a "painful" autumn Budget. Anna Leach, chief economist at the IoD, emphasized the need for a stable tax and policy framework to restore business confidence and encourage investment.
Meanwhile, the Confederation of British Industry (CBI) noted a "mixed picture" for private sector activity, with some sectors, like manufacturing and consumer facing businesses, still struggling. The CBI called for measures such as business rates reform and a clear business tax roadmap to drive long-term sustainable growth.
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