New poll shows UK backs commonsense position on North Sea
New polling by Survation for True North Advisors shows that the public wants a more pragmatic approach on energy than the policies being pursued by the current UK government.
In a challenging few weeks for Britain’s energy sector – with Harbour Energy announcing plans to cut 250 staff from its workforce as a direct consequence of the Energy Profits Levy (“windfall tax”), and the shelving of the Hornsea 4 offshore wind project – the findings present a significant challenge to the government’s approach towards the North Sea.
When presented with the fact that firms operating in UK waters are taxed at 78%, people view the windfall tax as unfair by a factor of three to one.
Despite having been brought in initially to help reduce the cost of living after a spike in energy prices caused by Russia’s invasion of Ukraine, just 27% of people across the UK believe the windfall tax has been effective in reducing household bills, compared with 62% who think it is ineffective.
The public do not believe that the tax, put in place when oil prices were nearly double what they are today, has been effective in encouraging energy companies to move away from fossil fuel extraction towards renewables.
People across the UK appear to be enthusiastic supporters of the North Sea energy sector and, by a factor of three to one, view the industry as an economic force for good which has a positive impact on the economy overall.
An overwhelming 68% of respondents believe that the UK should meet demand for oil and gas production from domestic sources, while just 15% think we should rely on imports – despite government decisions accelerating a decline in domestic supply in recent years, driving the amount of energy we import as a county to record levels.
Commenting on the findings, True North’s Senior Energy Advisor Allister Thomas said:
“Since the windfall tax was first imposed in May 2022 the price of Brent Crude oil has nearly halved, meanwhile, the levy has been increased by successive governments.
“As the industry faces this punishing tax rate, coupled with uncertainty on environmental assessments and a closed-door on exploration, these findings show the UK has become a difficult place to do business.
“It leaves the country reliant on imported oil and gas, and has cost jobs from the energy supply chain which is vital for delivering projects in offshore wind, hydrogen, and carbon capture which are needed for net zero.
“The shift to renewables at scale is the goal, particularly offshore wind, but volatile transmission charges and the risk of zonal pricing are undermining investment plans. Policy should instead seek to put the energy transition back on the front foot.”