The new Labour Government has confirmed it will follow through on its election pledge to increase the windfall tax on North Sea firms to 78% and cut the investment allowance.

In further blow, the tax raid is being extended to 2030.

Responding to the statement from Chancellor Rachel Reeves, Russell Borthwick, chief executive of Aberdeen & Grampian Chamber of Commerce, said:

“This decision is reckless, wrong and economically ruinous for the North sea and ignores the explicit warnings of industry, investors, academics and unions.

“The Chancellor should be on the next flight to Aberdeen and meet with the companies who will be pulling investment from the UK and the workers who will be extremely worried for their future.

“The new government is pushing the North Sea dangerously close to ‘game over’ territory and this will, in turn, put our energy transition and security at risk.

“Instead of seeing the energy sector as the solution to challenges in the UK’s public finances, the Chancellor has taken the wrongheaded decision to tax the industry into oblivion. The consequence of that will be £20billion lost in revenues to the Treasury, greater reliance upon imported oil and gas – worse for the planet and the economy – and tens of thousands of jobs across the UK placed in jeopardy.

“Confidence in the UKCS is already at rock bottom. Unless the UK government rolls back from this position on the Energy Profits Levy then we’re facing the destruction of industry on a scale not seen in over thirty years.”