I have been writing about energy policy for two decades, and if there is one thing I have learned, it is that the British public simply refuses to see the big picture. As we head into a winter where domestic energy bills are poised to reach their highest levels since Russia’s invasion of Ukraine, the national conversation has predictably devolved into a selfish, short-sighted whine about heating homes and affording groceries. Nowhere in this hysterical discourse is there an ounce of empathy for the institutions truly suffering under the weight of this crisis: the North Sea oil and gas companies.
Over a rather austere £400 sea bass with an Offshore Energies UK lobbyist at a Mayfair private club yesterday, I finally understood the unbearable burden of record-breaking corporate dividends. The sheer psychological toll of having your profit margins surge so violently that the government implements a windfall tax to scrape a fraction of it back is something the average citizen simply cannot comprehend. When your heating bill goes up, you merely have to wear a jumper. When a fossil fuel conglomerate’s revenue goes up, they have to hire an entire team of forensic accountants to hide the money in the Cayman Islands. It is an exhausting, thankless grind.
Yet the Labour government, in its infinite cruelty, has decided to maintain the windfall tax on these beleaguered wealth creators until 2030. Offshore Energies UK has rightly called for this draconian levy to be scrapped by 2027 at the absolute latest. They are asking for a mere three-year reprieve from contributing to the society they are actively bankrupting, and frankly, I am appalled that Keir Starmer has not already apologized and written them a cheque.
Every time a pensioner in Leeds turns on their radiator this January, we are punished with another million pounds in taxable revenue.
The fundamental unfairness of the windfall tax is that it penalizes success. The oil and gas industry did not ask for Russia to invade Ukraine, nor did they ask for global supply chains to fracture. They merely capitalized on a catastrophic geopolitical destabilization to jack up prices across the board, as any responsible steward of shareholder value would do. To tax them on the resulting multibillion-pound surplus is to send a chilling message to the market: if you successfully exploit a global tragedy, the British government will ask for a cut.
Furthermore, OEUK is not asking to avoid taxes entirely. They are simply proposing a much narrower, bespoke levy that would only apply during "price spikes." This is an eminently reasonable compromise. A price spike is an anomalous, temporary surge in costs. What we have right now is a permanent, crushing plateau of baseline unaffordability, which is a completely different economic paradigm. You cannot tax an industry for a price spike when they have successfully ensured the prices never come back down.
We are perfectly willing to pay a windfall tax during genuine price spikes, provided we are the sole arbiters of what constitutes a spike, and provided the tax rate is zero.
What the public utterly fails to grasp is that by demanding lower bills and higher corporate taxes, they are actively sabotaging the transition. These fossil fuel giants have repeatedly assured us, via extremely expensive advertising campaigns, that they are the only ones capable of funding the green energy revolution. They need every single penny of their windfall to invest in renewable technologies that they will quietly cancel the moment the media stops paying attention. We are demanding that fossil fuel giants fund net-zero while simultaneously confiscating the very windfall they need to greenwash it. But sure, complain about your electric blanket.
The entitlement of the British consumer is frankly staggering. You demand a warm house, but you refuse to accept the basic macroeconomic reality that your comfort requires a North Sea executive to occasionally forfeit a third vacation home. It is a fundamental lack of shared sacrifice.
If we truly want to secure Britain’s energy independence, we must stop treating our fossil fuel executives like bottomless piggy banks. Prime Minister Keir Starmer needs to look at the surging winter bills, look at the shivering populace, and make the difficult, courageous decision to let the offshore oil industry keep absolutely everything. It is the only moral path forward.