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Opposition parties slam Labour’s “Aberdeen Tax”

Thursday November 28th 2019 at 11:53 AM


Opposition parties have hit back at Labour’s proposal to slap the North-sea oil and gas industry with an £11bn tax bill if it wins power next month.

Labour has said it will hit the North-east energy industry with a £12bn levy if it’s elected on December 12. Photo: Marine Scotland

Industry bosses have raised concerns the so called “Aberdeen Tax” would deliver a hammer blow to the energy sector.  

Gareth Wynn, of Oil and Gas UK, said: “Any increase in tax rates will drive investors away and damage the long-term competitiveness of the UK’s offshore oil and gas industry, threatening jobs and future tax revenues and needlessly damaging the UK economy.”

During Labour’s manifesto launch in Birmingham last week, Jeremy Corbyn announced the windfall tax, something the party leader said would help workers move into low carbon jobs. 

Although the finer points of the levy are yet to be ironed out, Labour denounced the sector for not paying sufficient taxes during oil boom in the 1990s and 2000s.

Mr Corbyn said: “We can no longer deny the climate emergency, we can see it all around us.

“A Labour government will ensure the big oil and gas corporations that profit from heating up our planet will shoulder and pay their fair share of the burden with a just transition tax.”

But Conservative candidate for Gordon, Colin Clark, blasted the proposal, branding it a “death knell” for the oil and gas industry.

He said: “Nicola Sturgeon has made red lines for working with the Labour party but she hasn’t ruled this out.

“The North-east of Scotland depends on the oil and gas economy and the SNP candidates up here should rule out having anything to do with an £11bn tax that would undermine employment.

“Energy companies are part of the solution, not the problem.

“They have the engineers in Aberdeen and Aberdeenshire, they have the technology for hydrogen and carbon capture and, most importantly, they have the money to invest in delivering net-zero for the UK.

“The energy sector is the key to delivering a low carbon future and we should be getting on board, not trying to tax them out of sight.”

During her party’s manifesto launch in Glasgow yesterday, SNP leader Nicola Sturgeon was asked by P&J reporter Tom Peterkin if she could categorically rule out SNP support for the levy.

She replied: “I am not attracted to that (the tax) or in favour of that. The only caveat is that I haven’t seen any detail of it.

“But it seems to me that proposal would cost jobs in the north-east of Scotland in particular.

“I am absolutely committed to the transition away from fossil fuels. That transition is already under way in Scotland and we have got to make sure that is done fairly.”

Liberal Democrat candidate for Gordon, James Oates, described the plan as a “non-starter” that made no economic sense.

He said: “The idea that the oil industry is some sort of milch cow that the exchequer can latch onto whenever they want is a crazy one.

“It’s not as if the industry doesn’t have considerable costs in terms of decommissioning and although this proposal may fill some visceral, anti-big business part of the Labour saw, it doesn’t actually serve any practical purpose.

“The way it’s been proposed just injects more uncertainty at a time when the North-east is already facing considerable pressure.”

We contacted Labour candidate for Gordon, Heather Herbert, for comment.

The other candidate for the seat is the SNP’s Richard Thomson.

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