Anas Sarwar has shrugged off an attack on Labour’s oil tax plans after being called a “traitor” by Aberdeen business leaders.
The Scottish Labour leader said the party would press on with its plans for a multibillion-pound windfall tax on oil profits, despite claims from more than 800 oil, engineering and business executives that the levy could cost up to 100,000 North Sea jobs.
The Press & Journal newspaper in Aberdeen, the UK’s oil capital, surprised Labour officials by splashing “the traitors” on its front page on Thursday over photographs of Sarwar, Keir Starmer, Rachel Reeves and Ed Miliband, with an oil rig in the background.
Starmer, Sarwar and Miliband met oil and engineering executives in Aberdeen several weeks ago seeking their support for Labour’s strategy to ramp up investment in low carbon energy and shift away from North Sea oil and gas.
In a lengthy speech to Scottish Labour’s annual conference, Sarwar repeatedly defended the windfall tax proposal as a key measure in combating the cost of living crisis, with energy bills now 60% higher than two years ago.
He argued it was essential to Labour’s strategy to invest in the transition to net zero, boost the UK’s ailing industrial and energy infrastructure and fund a “British jobs bonus” to create green jobs.
Attacking the oil industry’s “record” £33bn profits last year, Sarwar told delegates one energy firm, British Gas, reported a tenfold increase in its profits on Thursday. “That’s why Labour will introduce a windfall tax to tackle the cost of living crisis,” he said.
In a marked break with Labour’s direction under Jeremy Corbyn, Sarwar said the party was determined to fuel economic growth by streamlining the planning system, overhauling Scotland’s investment agencies and building stronger links with business.
“That’s why we are an unashamedly pro-growth, pro-business, pro-worker party,” he told delegates.
Earlier on Friday morning, Sarwar had hosted a private business breakfast with about 150 company executives who were invited to watch this conference speech.
Sarwar attempted to deflect attention on to the Scottish National party by accusing it of dropping support for a windfall tax even as it increased taxes for everyone earning above £28,500. “They can no longer pretend to be on the side of working people in Scotland,” he said.
His spokesperson added that the party was having “robust” conversations with the energy industry, but would not change course. He said Scotland and the UK faced an existential challenge: it either competed to be a world leader in green energy or it would be overtaken.
The official added that Labour began confidential access talks with Treasury mandarins last week to prepare for implementing that windfall tax if it wins the next election.
The joint letter from north-east Scotland business leaders, including the engineering billionaire Ian Wood, likened the alleged impact of Labour’s windfall tax plans to the forced closure of coalmines by Margaret Thatcher’s government in the 1980s.
Labour proposes increasing the energy profits levy by three points to 78%. The letter quoted analysis by the investment bank Stifel, which calculated that increase would cost the Treasury £20bn in consequent job losses.
That echoes arguments by some critics of the transition to net zero that it will be unfair if it decimates oil-reliant communities. “If you proceed with these plans, up to 100,000 people could lose their jobs; redundancies on a scale not seen in this country since the pit closures of the 1980s,” the letter said.
