Offshore Energies UK, a body representing the UK's offshore energy industry, has called for the government to help rebuild investment confidence following tax hikes that have forced the UK's biggest oil and gas producer in the North Sea, to start planning job cuts.

OEUK was reacting to a Reuters report that Harbour Energy had told staff it planned job cuts, linked to the windfall tax imposed on the UK sector last year. The jobs would be cut at Harbour Energy's headquarters in Aberdeen.

 Mike Tholen, sustainability director at Offshore Energies UK, which represents 400 companies involved in producing energy from oil,  gas and offshore wind, in UK waters, said the windfall tax was always likely to undermine investment.

"A  year ago, the offshore energy operators were being taxed at 40% of profits, and the UK had a reputation as a stable place to invest. Since then, we have had two tax rises, and the operators are now being taxed at 75% - by far the highest of any UK industry. Some politicians are also  proposing further tax rises and the removal of investment allowances. 

• UK North Sea Oil Giant to Cut Jobs Due to Windfall Tax

“These tax increases, and the threat of more to come, have made the UK a much riskier place to invest, and so makes it far more likely that investors will look overseas instead." 

“This matters because the UK gets 75% of its total energy from oil and gas.  We have 32 million vehicles relying on petrol or diesel plus 23 million  homes reliant on gas for heating. We also get 42% of our electricity  from gas fired power stations. 

 “Our members produce 40% of  the nation’s gas , and so are essential to the nation’s prosperity and  energy security but we can only maintain that kind of output by constant investment.

"If we don’t invest then production will decline and leave  us increasingly reliant on imports. The global energy crisis caused by  Russia’s invasion of Ukraine shows how risky that could be."

 “We now need the government to help rebuild confidence so that the offshore industry can continue to provide energy for consumers as well as building the low-carbon energy systems  of the future.”