Trade body OEUK has stated that the Energy Profits Levy, also known as the 'windfall tax', on UK energy firms should be scrapped by 2025 or it could risk having a 'detrimental impact' on investment in the sector.
OEUK said that a new round of windfall taxes would 'leave the UK facing decades of energy insecurity' and only serve to 'heap further costs on consumers'.
The trade body warned that imposing new taxes would 'make the UK seem fiscally unstable and a riskier place to invest'. It said that if investment in the sector declined, then production would plummet – creating a 'disaster' for UK energy security.
Mike Tholen, Sustainability Director at OEUK, said: 'The government has a duty to both protect consumers and to ensure national energy security. Labour's proposals to hit our own producers with further taxes will discourage investment and so risk a rapid decline in UK production.
'That would mean buying more energy from abroad, increasing the UK's trade deficit and further risking UK energy security.
'It comes at the worst possible time for the UK offshore sector, which is still reeling from the introduction of the windfall tax in May.'