Donald Trump has accused the UK government of “making a very big mistake” by increasing the windfall tax on North Sea oil and gas profits.
The president-elect made the comment on his Truth Social media platform after a US firm announced plans to pull the plug on its operations in the area due to the policy.
Trump called on Britain to “open up the North Sea” and “get rid of windmills” — an apparent reference to the UK’s offshore wind farms.
Trump’s successful run for the presidency included the three-word campaign pledge “drill, baby, drill”. He has claimed he will increase oil and gas production during his second administration.
By contrast, Labour pledged in the run-up to the general election to ban all new drilling and exploration licences as part of Ed Miliband’s “green prosperity plan” to shift away from fossil fuels to cleaner energy.
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The windfall tax was introduced by Boris Johnson and his chancellor Rishi Sunak in 2022 in response to rising energy profits when prices soared after the Russian invasion of Ukraine.
In October the levy was raised from 35 per cent to 38 per cent, increasing the headline rate of tax on North Sea oil and gas profits to 78 per cent, and extended until 2030.
The rise prompted Apache, a US oil firm based in Texas, to announce plans to cease all production in its UK operations by December 2029 because of what it called “the onerous financial impact of the energy profits levy”.
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Apache, which has run the Forties oil field, the second largest in the North Sea, since 2003, also blamed new UK regulations on the control of emissions from North Sea facilities for making oil production “uneconomic”.
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Apache said it would instead focus on preparing for the “responsible decommissioning of our assets”.
Offshore Energies UK warned that the windfall tax rise could result in a loss of £13 billion to the UK economy from 2025 to 2029 and put 35,000 jobs at risk. The industry body also forecast that the dismantling of North Sea oil and gas infrastructure will cost £24.6 billion through to 2033.
Last month UK regulators approved a permit for a consortium, led by BP and Equinor, to begin pumping carbon dioxide in a site nearly a thousand metres below the seabed, off the coast of Yorkshire. Miliband, the energy secretary, said that the project marked a “new era for clean energy in Britain”. The government hopes the technology can be used to store captured emissions in disused North Sea oil and gas fields.
A government spokesman said: “Our priority is a fair, orderly and prosperous transition in the North Sea in line with our climate and legal obligations, and we will work with the sector to protect current and future generations of good jobs.
“We need to replace our dependency on unstable fossil fuel markets with clean, homegrown power controlled in Britain – which is the best way to protect billpayers and boost our energy independence.”
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There is a long history of friction between Trump and Labour. David Lammy, the foreign secretary, is on record as having described Trump as a “woman-hating, neo-Nazi-sympathising sociopath” in an article for Time magazine in 2018, when he was an opposition backbencher.
Sir Sadiq Khan, the mayor of London who received a knighthood in the new year honours list, has described Trump as a racist and a homophobe who held “ignorant” views on Muslims. In 2016 Trump responded by challenging Khan to an IQ test.
Relations between Trump’s campaign and the Labour government were also strained in October when it emerged that 100 party members had travelled to the US to volunteer for Kamala Harris.
However, Starmer appears to have built a good relationship with Trump since becoming prime minister. In September, after the pair had dinner together at Trump Tower in New York, Trump described Starmer as “very nice”, adding: “He ran a great race, he did very well, it is very early, he is very popular.”
Their friendly rapport appeared to continue after Trump’s election win in November, when Starmer became one of the first world leaders to congratulate him on his “historic” victory. According to the diplomatic report, the pair fondly reminisced about their previous meeting and spoke of Trump’s love of Scotland and the royal family.
