LABOUR have insisted that their plan to hit oil and gas companies with a windfall levy is not a “tax on Aberdeen”.
Jeremy Corbyn unveiled the policy yesterday at the party’s manifesto launch in Birmingham, describing it as a “just transition tax” that would help create one million green jobs and deliver the “substantial majority” of the emissions cuts needed to tackle the environmental emergency by 2030.
The size and exact mechanism of the tax is to be determined by a consultation.
Shadow chancellor John McDonnell told the Press and Journal: “No, it’s a tax for Aberdeen because all that money will go on investing in the jobs that people need in the just transition from fossil fuels to renewable.
“It will be the biggest investment Scotland has seen in generations, £100 billion and more, all for the Scottish people to make sure their economy will thrive.”
While North Sea production peaked in 1999 and has been declining ever since, it still supports around 120,000 jobs in Scotland and 270,000 across the whole UK.
Reportedly when the prospect of the tax was raised at a manifesto planning meeting, Scottish Labour leader Richard Leonard was left “ashen-faced”.
The Unite branch representing oil workers is the union’s largest in Scotland.
Alex Kemp, professor of petroleum economics at Aberdeen University, said the plans were “misguided” and would “discourage investment” into the UK North Sea. It would, he said, mean the country would have to import more oil and gas from countries that are “doing nothing to reduce their emissions”.
The academic also suggested that profits weren’t what they once were.
Kemp said: “It’s quite misguided to suggest there is a windfall that can be claimed from the North Sea under today’s conditions.
“Investment in the North Sea is down dramatically. We hope it has bottomed out, but it is at a very low level historically.”
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