If the polls are correct, Labour will be in government in less than a month from now, yet the party’s policies are already having an impact on business.
Three oil and gas companies – Jersey Oil and Gas, Serica Energy and Neo Energy – said on Wednesday they had decided to delay by a year the planned start of oil production at Buchan, an oilfield in the North Sea 120 miles to the north-east of Aberdeen, which they jointly own.
The trio explicitly linked the decision to the earlier than expected timing of the election.
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Jersey Oil and Gas, speaking on behalf of itself and its joint venture partners, told shareholders: “While activities continue in order for the Buchan project to be ready for field development plan approval by the end of this year, the exact timing for achieving this key milestone and enabling project sanction is naturally linked to securing fiscal clarity from the next government and ensuring that the project remains financially attractive.”
Labour’s flagship energy policy
That was a reference to Labour‘s energy policies.
Sir Keir Starmer, the Labour leader, confirmed last week that Labour intends to spend £23.7bn over the life of the next parliament on a ‘green prosperity plan’ at the centre of which is the creation of a state-owned vehicle, Great British Energy, that will invest in renewables.
It will be chiefly funded by raising the existing windfall taxes first imposed on North Sea oil and gas producers by Rishi Sunak, as chancellor, in 2022.
Sir Keir, who spoke last week of a “proper windfall tax“, proposes to raise the total level of tax from the current 75% to 78%.
Ed Miliband, the shadow secretary of state for energy security and net zero and the architect of Labour’s energy plans, also proposes to strip away tax reliefs Mr Sunak put in place, alongside the windfall tax, which allowed producers to offset their investments in new production…
