New Scottish Labour leader pledges to prioritise North Sea policy in talks with PM

Michael Marra, the newly appointed leader of Scottish Labour and regional MSP for the north-east, has stated that oil and gas policy will be central to his discussions with the prime minister. The Dundee-born politician, who has replaced Anas Sarwar in Holyrood, indicated his support for an earlier termination of the energy profits levy, commonly referred to as the windfall tax. Marra confirmed this stance after defeating south Scotland MSP Joe Fagan in the leadership contest, asserting that the sector would be at the heart of future conversations with the UK government.

The new leader claimed to have contributed to efforts aimed at increasing investment allowances under the windfall tax regime. However, the current Labour government, led by prime minister Kier Starmer and chancellor Rachael Reeves, has removed the investment allowances previously available to firms under the EPL. Furthermore, the government increased the rates imposed by the fiscal policy by three per cent. Under these measures, the headline rate paid by North Sea operators has risen to 78 per cent. The levy is scheduled to remain in place until 2030, at which point it will be replaced by the oil and gas revenue levy, or OGRl. Marra argued that the commitment to scrap the energy profits levy by 2030 needs to be accelerated, citing the need for real progress in the sector.

Marra explained that his dialogues with Labour’s Andy Burnham will also address the long-term sustainability of the UK continental shelf. He noted that these discussions have been ongoing for several years and that he intends to continue making a strong case for the industry. The timing of these political engagements coincides with the prime minister’s arrival in New York for the annual United Nations gathering. Burnham expects to find common ground with US president Donald Trump, who has been vocal in his support for North Sea oil and gas production. This diplomatic context may influence the current focus of conversations regarding the sector.

The UK oil and gas industry is currently awaiting a decision from Burnham’s government on the Jackdaw and Rosebank developments. Both projects are operated by Adura and had their previous approvals revoked following a landmark court ruling that found earlier government decisions to be unlawful. New environmental impact assessments, which include figures on downstream emissions, have gone to consultation. These assessments are set to be approved or rejected by energy secretary Miatta Fahnbulleh. Marra previously discussed the Rosebank development in 2024 when he featured in the documentary The Road to Rosebank. At that time, he highlighted the importance of ensuring a clear pipeline of talent from oil and gas to renewables, with particular attention to the supply chain. He also addressed questions regarding the potential detrimental impact of Labour’s energy policy, emphasising the need for a stable policy regime that encourages investment and works with people. He argued that while the industry should make an appropriate contribution to those facing high energy prices and the cost of living crisis, a stable framework is essential for maintaining investment.