IEA Chief Operating Officer and Energy Analyst Andy Mayer has written in CapX on the negative impact of windfall taxes on the UK’s energy crisis recovery.

Andy wrote:

“Amid an ongoing energy crisis and European war, with the new profit tax rates at 75 per cent and the opposition calling for the rate to be even higher, firms are deserting the North Sea. The latest to do so is the largest. Harbour Energy, who employ 1,200 people in Aberdeen, plan to shed one-third of their staff. They signalled the danger in January, and again in early March, in the hope of some relief in the Spring Budget or ‘Powering Up Britain’ energy strategy. Relief was, however, not forthcoming.

“The Government has had a year of similar warnings from Total, Ithaca, Shell, BP, and Brindex (who represent independents). OEUK, the trade body for large and diversified energy companies, claimed 90% of firms were cutting investment. Five hundred million barrels of oil have already been lost – akin to a year of the UK’s output – and production will fall 15% per year by 2030. It notes some positive shift to investments in offshore wind, but that it is held back by its own five-year 45 per cent windfall tax on energy generators and the burdensome regulatory climate.

“Despite promising ‘greater energy independence’, the Government’s policies have in practice delivered the precise opposite: greater dependence on imported fossil fuels, with those imports subsidised through the domestic energy price guarantee.”

Read Andy’s full piece here.