The government’s tougher windfall tax on oil and gas companies risks losing £12bn in tax receipts, according to trade body Offshore Energies UK (OEUK).

Labour came to power with an election pledge to toughen the windfall tax regime – known as the energy profits levy (EPL). This tax was put in place by the previous government in May 2022 in response to the surging oil and gas prices.

In last year’s Autumn Statement, the EPL was increased to 35%, with the Treasury announcing it would remain in place until 2028 unless oil and gas prices fell for a sustained period.

However, the Labour Party pledged in its manifesto that it would not issue new licences to explore new oil and gas fields and would close loopholes in the windfall tax left by the previous government that enabled oil and gas firms to reduce their taxes through investment allowances.

If the government sticks to its pledge and raises the headline tax rate by three percentage points in the Autumn Statement, it means that from November...