Despite a challenging global outlook, Spring is time for some cautious optimism.

Despite a challenging global outlook, Spring is time for some cautious optimism.

There are glimmers of hope we are beginning to see some consensus emerging in the House of Commons last week after members on both sides of the floor spoke in support of the UK’s offshore energies industry.

The Second Reading of the Finance Bill saw MPs from across parties back the introduction of the Energy Security Investment Mechanism (ESIM), the development of which OEUK has led for our industry.

This legislation means that the lifetime of the Energy Profits Levy, or windfall tax, which is damaging investor confidence, is now tied to actual wholesale energy prices and there is now a formal mechanism for its removal when conditions allow.

OEUK has worked across all parties and our membership to make the ESIM a reality, and comments around the chamber underlined a recognition of our industry and its workforce as strategic assets to the UK.

The Exchequer Secretary to the Treasury, Gareth Davies MP, supporting the bill stated that “The ESIM operates on the basic principle that it is only right that when prices of oil and gas come down to normal levels, so too should the tax on exceptional profits. That gives certainty to industry and also brings more fairness.”

Shadow Financial Secretary to the Treasury, James Murray MP, made clear Labour's support for a time-limited windfall tax, and restated that the Labour Party's policy would be for the windfall tax to end no later than the end of the next parliament, stating that 'we recognise that by its very nature, the windfall tax is expected to be a one-off levy in response to extraordinary profits, and will ultimately come to an end...no later than the end of the next Parliament. “

As OEUK has always said, windfall taxes should be temporary and targeted and not become a permanent feature of a fiscal regime. While we still have a way to go, at least this principle is now set in law, and important to see cross party support.

We now need to restore long-term confidence in our industry so we can build a homegrown energy transition together. This confidence could be built with a globally competitive tax framework that enables a homegrown energy transition.

Our evolving offshore energy sector has a critical role to play in the future. Providing energy that the country needs, supporting 200,000 jobs in communities up and down the country, paying taxes that support our public services, supporting a world class supply chain, while delivering investment in the wider energy transition. We won’t get any of this without a fiscal regime that encourages investment.

To grow the UK economy, deliver energy security?and net zero we must see a strengthening of the consensus that we have glimpsed in Westminster. Our energy journey must be focused on attracting investment, growing our economy, supporting our communities, all while tackling our climate goals. We must build confidence in the UK as an irresistible place to make long-term investments in energy and make a fair return. Setting big targets is easy, meeting them is the hard bit. If policy makers get this right, a homegrown energy transition could unlock economic growth for decades to come.

?We will continue to work with all parties to create the conditions we need to enable the huge private sector investments we need to make this exciting future a reality right here in the UK.

?Let’s choose a homegrown energy transition.

?You can download a free copy of our Offshore Energies UK industry manifesto here oeuk.org.uk/manifesto