OEUK Proposes £137 Billion Economic Boost and Job Safeguard with Windfall Tax Reform

OEUK Unveils Plan for Economic Growth and Job Security

Offshore Energies UK (OEUK), the leading trade body for the UK's offshore energy sector, has put forward a comprehensive plan designed to deliver a substantial £137 billion boost to the UK economy by 2050 and safeguard 160,000 jobs. The proposal, announced on October 17, 2025, calls on Chancellor Rachel Reeves to implement critical reforms to the existing windfall tax, known as the Energy Profits Levy (EPL), in the upcoming Budget.

Call for Windfall Tax Reform by 2026

OEUK's central recommendation is to replace the current Energy Profits Levy in 2026 with a permanent, profits-based mechanism. This new fiscal framework would be aligned with the Treasury's 2025 consultation and designed to activate only when oil and gas prices exceed a set threshold, levying tax against excess profits. Under this proposed mechanism, the headline tax rate for the sector would drop from the current 78% to 40%, while still ensuring additional tax revenue during periods of high commodity prices. The industry body asserts that this change is crucial to unlock over £40 billion in new investment in the UK's energy future.

Impact of Current Levy on Investment and Jobs

The offshore energy sector warns that the existing EPL has created significant investment uncertainty, leading to a decline in North Sea activity. Industry leaders, including OEUK Chief Executive David Whitehouse, have stated that the current tax regime is 'costing jobs and investment and reducing the tax revenues' that support public services. Reports indicate that around 1,000 jobs a month are being lost in the sector, and without reform, the UK's oil and gas production is projected to fall by approximately 40% within the next five years from 2025 levels. OEUK argues that waiting until 2030 for reform, as previously indicated for the EPL's end, would be 'too late to prevent lasting damage' and risks the North Sea industry's collapse 'within years, not decades'.

Strengthening UK Energy Security and Transition

OEUK emphasizes that its plan is vital for strengthening the UK's homegrown energy future and reducing reliance on costly imports. The UK currently derives 76% of its total energy from oil and gas, and in 2022, spent £117 billion importing energy. The proposed reforms aim to secure £41 billion of extra investment in UK energy by 2050 and unlock an additional £12 billion in tax receipts by the same year. Beyond oil and gas, OEUK's members are actively involved in the broader energy transition, investing in:

• Offshore wind projects
• Carbon capture and storage (CCS) technologies
• Hydrogen production

The trade body, representing over 450 companies and supporting approximately 200,000 people nationwide, advocates for a stable and competitive investment environment to ensure the UK can meet its energy needs and achieve its net-zero ambitions.