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by Staff reporter
16 February 2024
Michael Marra defends Labour's energy sector windfall tax plan

Michael Marra defends Labour's energy sector windfall tax plan

Scottish Labour’s shadow finance secretary has defended the UK party’s announcement of a windfall tax on oil and gas companies, saying it will help provide a “stable transition” for the energy sector.

When it published its Green Prosperity Plan earlier this month, Keir Starmer’s party “stood down” its plan to invest £28bn a year in the energy transition, saying instead it would invest under £15bn a year.

Of that, £4.7bn will be new money, with around half coming from new borrowing and the rest from changes to the government’s oil and gas windfall tax. Labour intends to raise the rate from its current level of 75 per cent to 78 per cent and also increase the period for which it will apply by one year to 2029.

Speaking on a Scottish Labour Party conference panel hosted by Holyrood magazine in conjunction with industry body OEUK, Marra said that the party is “offering a stable transition”.

“With the Green Prosperity Plan we want to say what the taxes are going to be and to provide certainty to the industry,” he said.

“We also need to provide certainty about capital allowances [and] when we talk about Norway [which also operates a windfall tax] we need to make sure we talk to our colleagues in industry to make sure we transition properly. We need parity across industry.”

Jenny Stanning, external relations director at OEUK, said she was “disappointed” with Labour’s windfall tax plan and the lack of engagement from the UK party on the issue, but added that she welcomed the bridges that the Scottish Labour Party is currently attempting to build with the industry.

“I was disappointed when the Green Prosperity Plan came out. There was a section in there about windfall taxes for oil and gas,” she said. “That for us is really disappointing, because we believe through our own analysis that can lead to the loss of up to 42,000 jobs – real jobs, real people, real communities – and about £26bn worth of economic value, which will have a huge impact on Scotland and the UK.

“We have been disappointed about that because of the lack of engagement we’ve had around the detail of those proposals.”

Sarah Boyack, Scottish Labour spokesperson on energy, just transition and net zero, called for "joined-up working" between industry, government and education. She said being in opposition was "infuriating", adding her party had "learned a lot in government" prior to its loss to the SNP.

She said "it's difficult, but a grown-up conversation" has to happen around how quickly Scotland can cease oil and gas activity while renewables infrastructure is built up and workers are trained to supply that sector. Boyack said the reality is that "we need to keep that [oil and gas] sector going for decades".

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