Trump was proper! Business chiefs blast Labour over ‘reckless’ destruction of North Sea oil and fuel trade

Labour is facing a fresh onslaught from the oil and gas industry after Donald Trump lashed out at Britain’s ‘catastrophic’ energy policies.

Speaking at the World Economic Forum in Davos last week, the US President said government policy was making it ‘impossible’ for companies to operate there and branded the drive to net zero the ‘green new scam’.

The remarks have won the backing of local business groups with one industry leader describing Labour’s approach to the North Sea as ‘puzzling’ and ‘reckless’.

Russell Borthwick, chief executive of the Aberdeen & Grampian Chamber of Commerce and a prominent voice in the industry, said the windfall tax ‘has imposed an eye-watering burden on UK producers’.

And he said the new ‘oil and gas price mechanism’ designed the replace it, which will see headline tax rates fall from the current 78 per cent to the prior level of 40 per cent, but not until 2030, must be introduced ‘immediately’.

His comments were echoed by Offshore Energies UK, which said the new regime ‘must be brought forward to boost homegrown energy production instead of creating a climate where we rely on importing resources we have here’.

The so-called energy profits levy was introduced by the Tories in 2022, but has since been raised to 38pc by Labour – taking the headline tax rate on oil and gas profits to 78pc – and extended to March 2030.

The punitive tax – among the highest in the world – has been blamed by the sector for job losses and a lack of investment, with no new wells drilled in the British North Sea in 2025 for the first time since 1964.

Writing on dailymail.co.uk, Borthwick said: ‘In a world marked by war in Europe, instability in the Middle East and growing tension between global powers, energy security is no longer an abstract policy debate. It is a hard-edged question of national resilience, economic competitiveness and geopolitical credibility.

‘Yet the UK appears determined to move in the opposite direction, as President Donald Trump highlighted to global leaders during his address to the World Economic Forum last week.’

Branding UK regulations ‘dysfunctional’, he added: ‘While Norway has stepped up as a cornerstone of European energy security – to the clear benefit of its economy, workforce and public finances – the UK has instead chosen to erode its own ability to produce, refine and supply energy from the North Sea. This is not just puzzling. It is reckless.

‘The UK North Sea remains a strategic national asset. It has the capacity to meet a far greater share of domestic and European demand, yet its potential has been systematically constrained by policy choices that actively discourage investment.’

He said delaying the introduction of the new oil and gas price mechanism to 2030 was ‘indefensible’.

‘It should be brought forward immediately to restore competitiveness and unlock investment. Strategic energy supply cannot be built on punitive taxation,’ he said.

His comments were echoed by Katy Heidenreich, a director at OEUK, who said: ‘As long as the UK needs oil and gas it makes sense to use its own rather than rely on imports. 

‘The UK needs homegrown oil and gas alongside renewables to maintain energy security, affordability and the world class supply chain required to expand energy projects across wind, hydrogen and carbon storage.

‘That is why the Government must bring forward the oil and gas price mechanism in 2026. Investors cannot wait until 2030. Without this we risk more supply chain companies being forced to go overseas, further job losses, and continued industrial contagion.’

Ideology is suffocating energy supplies – and the consequences are impossible to ignore

Russell Borthwick is chief executive of Aberdeen & Grampian Chamber of Commerce 

In a world marked by war in Europe, instability in the Middle East and growing tension between global powers, energy security is no longer an abstract policy debate. It is a hard-edged question of national resilience, economic competitiveness and geopolitical credibility.

Yet the UK appears determined to move in the opposite direction, as President Donald Trump highlighted to global leaders during his address to the World Economic Forum last week.

Over the past three years, Europe has rightly sought to end its dependence on Russian gas. But in doing so, it has pivoted sharply towards imported liquefied natural gas from the United States, creating a new strategic dependency in an increasingly uncertain world.

While Norway has stepped up as a cornerstone of European energy security – to the clear benefit of its economy, workforce and public finances – the UK has instead chosen to erode its own ability to produce, refine and supply energy from the North Sea. This is not just puzzling. It is reckless.

The UK North Sea remains a strategic national asset. It has the capacity to meet a far greater share of domestic and European demand, yet its potential has been systematically constrained by policy choices that actively discourage investment. A dysfunctional regulatory regime has delayed major projects.

The Energy Profits Levy has placed domestic producers at a crippling competitive disadvantage. And an ideological ban on new licences is suffocating future supply while hollowing out a world-class supply chain.

The consequences are now becoming impossible to ignore.

Reports that the UK continues to import refined oil products – including jet fuel – that can be traced back to Russian crude via third countries should alarm anyone serious about sanctions and security.

In effect, we are outsourcing production abroad, importing energy with higher emissions, and potentially sustaining revenues for hostile regimes, while simultaneously shutting down cleaner domestic alternatives. This is the worst of all worlds.

There are three structural failures at the heart of current policy, each of which could be addressed quickly by a government that genuinely prioritises energy security.

First, the tax regime. The Energy Profits Levy has imposed an eye-watering burden on UK producers, driving capital away at precisely the moment global instability demands greater domestic resilience. The Oil and Gas Price Mechanism was intended to correct this, but waiting until 2030 to introduce it is indefensible. It should be brought forward immediately to restore competitiveness and unlock investment. Strategic energy supply cannot be built on punitive taxation.

Second, declining production. As output from the UK Continental Shelf falls, our reliance on imports rises. That exposes households and businesses to greater price volatility, increases vulnerability to geopolitical shocks, and exports jobs, skills and economic value overseas. 

Transitional Energy Certificates and tie-backs are welcome, but they are not enough. The government must revisit its opposition to new licences and allow any field to proceed where the alternative is importing more oil and gas from abroad. Import dependency is not climate leadership; it is industrial self-harm.

Third, refining capacity. The closure of facilities such as Grangemouth uncovers a deeper failure to understand energy systems as a whole. A resilient nation does not merely extract energy – it refines, processes and supplies it domestically. 

Losing refining capacity makes the UK structurally dependent on international supply chains we do not control. Sustained North Sea production is essential to keeping remaining refineries viable and safeguarding fuel security.

Taken together, these trends leave Britain more exposed, less competitive and strategically compromised. Energy security, economic security and national security are inseparable. Policy must finally reflect that reality.

The businesses I represent are ready to invest, innovate and deliver secure, affordable and lower-carbon energy for the UK. But they cannot do so in an environment that actively penalises domestic production in favour of imports.

In an age of geopolitical fracture, producing more from the North Sea is not nostalgia or denial. It is common sense. The question is no longer whether Britain can afford to back its own energy industry – but whether it can afford not to.