Keir Starmer will take a wrecking ball to Scotland's economy

FILE - Supply vessels used in the oil, gas and renewable energy industry are docked by the Caledonian Oil's tank, at the Aberdeen Harbour, in the North East of Scotland, on April 29, 2022. to announce the latest version of his “five pledges” for government.

However, this is going to result in anything but economic stability. A report last week from analysts at the Stifel investment bank forecast that Labour’s planned increase to the windfall tax and proposed removal of incentive allowances will mean that job numbers in the North Sea could fall from 200,000 to 100,000 – as quickly as by the next General Election in 2029. Stifel bases this calculation on a likely fall in North Sea investment as extra tax goes into the Treasury’s coffers.

But these numbers are bonkers. If raising the windfall tax leads to a fall in investment, output will actually start dropping – and tax revenues with it. Stifel calculates the UK will lose around £20bn in taxes as a result. Labour’s tax numbers are nonsense. Which will mean even more austerity. We’ve been here before, of course. In 1975, we had the British National Oil Corporation, which aimed to develop much of Britain’s North Sea oil industry for the public good. It was flogged off to BP in 1988.

The irony in all this is that nearly half of the UK and Scotland’s offshore wind generating capacity is state-owned. Alas, the states involved are Denmark, France, Sweden and China.

Source: Financial Digest (financialdigest.net)

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