To say that the new Labour Government has been pussyfooting about in lamentable ways in key areas would be quite the understatement.

However, in one area it will have seemed, at least to some, like a bull in a china shop.

Prime Minister Sir Keir Starmer and his new Government have sat on their hands when it has come to the Tories’ hard Brexit, having ruled out any move to rejoin the European Union or single market, and this remains a great pity.

They have sadly also adopted the fiscal constraints of the failed Conservatives. And, in general, they have appeared afraid to put their own stamp on things, with the important exceptions of thankfully declaring the Conservatives’ Rwanda deportation scheme for some asylum seekers entering the UK “dead and buried” and doing something to help employment rights.

However, when it has come to the North Sea oil and gas sector, Labour has not shown any fears about upsetting the applecart.

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And this looks increasingly like an area in which a Labour Government that has exhibited incredible caution, and not in a good way, would be wise to tread a little more carefully.

Clearly, Scotland is particularly exposed to any ill effects of policy errors relating to the North Sea which lead to a significant hit to activity.

Many, many thousands of jobs are at stake.

Labour seemed intent on mounting a major charm offensive in Scotland ahead of the July 4 General Election, for its own political ends.

However, when it has come to its stance on the North Sea, it has appeared not to care so much about the effects of its policymaking on Scotland.

That is, of course, not to say that the new Labour Government is not entitled to form an opinion on what oil and gas companies should be paying in taxes or to take a keen interest in the environmental impact of North Sea activity. And of course, in terms of lobbying power, the oil and gas sector and many of the big companies within it are perfectly capable of looking after themselves.

Rather, the danger seems to come from what looks like something of a relentless attack on North Sea activity from the new Government.

Labour went into the General Election with a pledge to end new North Sea exploration licences.

The move looked somewhat naïve, given not only the UK’s weakness when it comes to security of energy supply but also the simple truth that the energy “transition” is just that. Transitions take time, and sensible decisions must be made in the meantime.

And that is before we even get to the importance of the North Sea - not just crucially to the Scottish economy but also the UK as a whole.

This is not to say there should not be a windfall tax on North Sea profits. That said, some might look at the likes of the big banks and wonder why they are not being taxed a bit more. And there is understandably controversy over the profits being made by household electricity and gas suppliers.

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There are signs that plenty of operators in the North Sea have been making good money in spite of the windfall tax.

However, if the tax is hiked by too much, you risk killing the goose that is laying the golden eggs.

Furthermore, the Labour Government has launched a consultation exercise on environmental aspects of North Sea activity, which does not conclude until the spring of next year.

Labour has had a long time to decide exactly what it wants to do in the North Sea.

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It is good that it is consulting but the delays in it confirming what it is doing, especially given the somewhat hostile noises from the new Government towards the oil and gas sector, are creating great uncertainty.

And such uncertainty can be corrosive.

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NEO Energy, which is 100%-owned by Norwegian private equity player HitecVision, got the week off to quite the start on the business and economic front by going big on this uncertainty when it warned on Monday morning of first oil from the major Buchan Horst development being “inevitably” delayed.

The new Government will need to take a view on how much of what oil and gas companies are saying amounts to lobbying and to what extent their observations and warnings represent a danger of lost activity. Hopefully, Sir Keir and his Cabinet care about the latter given they keep telling us that economic growth is their number one priority.

NEO Energy declared on Monday that it had decided to “materially slow down” investment across all of its development assets, blaming policies from the new Labour Government.

The company, which owns 50% of the Buchan Horst development and is the operator on this project, declared: “In recent weeks, the Government has announced a number of measures which have materially increased the level of uncertainty in relation to the UK’s oil and gas sector and investment decisions in this context are extremely challenging.”

It added: “In relation to the Buchan Horst project, NEO Energy awaits clarity regarding the UK regulatory and fiscal framework so that the full impact can be assessed. This will inevitably delay first oil timing in relation to the project which was previously forecast to be late 2027.”

NEO Energy said its joint venture, in which Jersey Oil & Gas has a 20% stake and Serica Energy a 30% interest, will “seek a licence extension in order to continue technical evaluation in light of these changes to tax and environmental consents”.

Note the references to “extremely challenging” investment decisions and “materially increased” uncertainty for the sector as a whole.

All of this should certainly give the Labour Government some pause for thought.

That is not to say it should roll over, and this would seem unlikely in any case given the degree of stubbornness shown by Sir Keir on the likes of refusing to mitigate in any serious way the Brexit damage.

However, the new Government should assess carefully the likely impact of what it is planning on the North Sea for itself, in light of what it has heard so far, and it should do so quickly.

Politics is one thing, but protracted uncertainty is not good for the economy. And, as observed previously, Labour says it really cares about the economy.

NEO Energy noted that the Department of Energy Security and Net Zero had announced on August 29 that it plans “to begin a consultation with industry on new environmental guidance in relation to oil and gas projects”.

The North Sea player observed: “This consultation is not expected to conclude until spring 2025. Consequently, the Offshore Petroleum Regulator for Environment and Decommissioning has further announced that while the consultation is ongoing, they will be deferring assessment of all environmental statements, including ones already in progress, such as the Buchan Horst project.”

NEO Energy added: “This follows the announcement on 29 July 2024 that the Government intends to increase the energy profits levy (EPL) to 38%, thereby increasing the marginal tax rate to 78%, to extend the EPL sunset date to 31 March 2030, to remove investment allowances and the intention to reduce capital allowances with the extent to be determined after industry consultation. In addition, the Government wishes to consult on changes to the fiscal regime beyond 31 March 2030. These changes clearly have a negative impact on the economics and overall viability of a project such as the Buchan Horst.

“Against this uncertain backdrop, NEO Energy and its 100% owner, HitecVision, have taken the decision to materially slow down investment activities across all development assets in its portfolio.”

When NEO Energy lays all of Labour’s moves out like this, it looks like quite the onslaught from the new Government on the North Sea.

The Labour Government looks like it should really exercise some of the caution that it seems so intent on adopting in other areas.