Serica Energy boss warns Labour’s push on North Sea could lead to huge job losses

The head of Serica Energy has warned that Labour’s policies on North Sea oil could lead to huge job losses and end up being “worse for the environment”.

David Latin criticised the government’s plans to remove a tax break for oil producers that allows them to offset taxes with reinvested cash.

This comes after the Labour Party last week confirmed an increase in energy profits tax from 3% to 38%, effective from 1 November.

This will raise the tax on oil and gas activities to 78 percent, one of the highest in the world.

Yesterday, Latin said the company expected tax increases but raised concerns around investment. ‘Capital allowances mean companies can offset investment against tax. And if the ability to do so is reduced, then companies like Serica simply won’t invest.’

‘What will happen if we don’t invest is that there will be less tax revenue and many job losses.

“There will be less security and it will be worse for the environment,” added the president of Serica.

The government believes the measures will contribute to its drive to increase renewable energy and decarbonise the energy sector by 2030.

This comes after Chancellor Rachel Reeves also came under heavy criticism last week for claiming there was a £22bn hole in the public finances.

The fossil fuel industry continues to make a significant contribution to the UK’s energy supply, accounting for around 74 per cent of energy supply and employing around 200,000 workers.

Latin has warned that Labour’s policy could be bad news for energy security, with growing reliance on imports if producers start to pull investment out of Britain.

Offshore energy giant EnQuest also spoke out against the North Sea offensive yesterday.

“Reductions in investment allowances will stifle investment in the sector and will be a highly damaging measure for employment across the UK,” he said.

“Rather than accelerating decarbonisation, these measures will accelerate the decline of UK oil and gas production, making the country even more reliant on ever-increasing carbon imports, damaging a vital indigenous industry and the hundreds of thousands of jobs it supports,” he added.

After Russia’s invasion of Ukraine drove up oil and gas prices, raising household bills, a one-off tax of 25 percent was introduced, later raised to 35 percent.

The tax wiped out most of producers’ profits last year. Producers including Serica, Ithaca Energy and Harbour Energy have been looking for projects overseas.