EurOil: UK Labour party drops plans to backdate North Sea windfall tax

With the debate over North Sea oil and gas policy raging in the UK ahead of the next general election, Labour has dropped plans to backdate a windfall tax on producers’ profits to the start of 2022, a party spokesperson confirmed to the Financial Times on February 9.

The windfall tax was introduced by the Conservatives under former Prime Minister Boris Johnson in May 2022, and has been roundly criticised by the North Sea industry for sapping investment and accelerating the decline in the country’s hydrocarbon production.

While the decision not to backdate the tax by five months is a concession to producers, it has done little to get the industry on board with Labour policy, as the party still intends to extend the lifetime of the levy by two years until 2029 if elected in the next election, due to take place in either late 2024 or early 2025.

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