Foreign investment in Britain’s energy sector has plunged to a 12-year low, as investors shun North Sea oil and gas projects.
The number of foreign-funded British energy projects halved to just 27 last year, according to EY.
Just three of these were in oil and gas, down from 16 the previous year, as Labour kept new North Sea drilling on hold and maintained a windfall tax on operators’ profits.
The industry is now bracing for potentially even higher taxes in John Healey’s first Budget as Chancellor and is still uncertain whether new drilling licences will be approved.
A broader EY survey of foreign investors found that Britain’s high energy costs were the country’s biggest turn-off as an investment destination. Investors were also worried about the country’s political stability and high labour costs.
They said the biggest risk to Britain’s attractiveness in the next three years was its uncertain economic outlook, including growth, interest rates and public debt.
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