Committee publication · Special Report · 16 January 2026 · HC 1603
6th Special Report - The future of Scotland’s oil and gas industry: Government Response
Summary
This government response to the Scottish Affairs Committee's October 2025 report on Scotland's oil and gas industry sets out the UK government's position on managing the North Sea's decline while scaling clean energy. The government partially or fully accepts most recommendations, pointing to the North Sea Future Plan (November 2025), £63 billion in clean energy capital investment, new Transitional Energy Certificates for existing fields, and the North Sea Jobs Service as its core transition strategy.
Key findings
- Government commits to no new oil and gas exploration licences but will manage existing fields for their full lifespan using new Transitional Energy Certificates to maintain economic viability.
- Clean energy workforce target: nearly double from 440,000 (2023) to 860,000 jobs by 2030 through £63 billion capital investment, £9.4 billion for CCUS, and £1 billion Great British Energy Supply Chain Fund.
- Energy Profits Levy (EPL) set to end March 2030 or earlier; will be replaced by new Oil and Gas Price Mechanism (35% rate) when oil/gas prices exceed thresholds ($90/barrel, 90p/therm for 2026/27).
- North Sea Jobs Service (world-leading programme) and Oil and Gas Transition Training Fund (up to £18 million 2026–27 to 2028–29, UK and Scottish government jointly funded) to support worker transitions.
- Government partially disagrees on accelerating new fiscal regime implementation and on hypothecating oil and gas revenues for transition funding due to fiscal sustainability concerns and production decline expectations.
Government position
The government partially accepts recommendations 1, 7, 9, 12, and 14; fully accepts recommendations 5 and 16; and fully agrees with conclusions on the need for pragmatic transition management. It rejects using oil and gas tax revenues to fund transition (citing volatility and declining production), declines to accelerate the fiscal regime beyond 2030, and defends case-by-case EIA decisions without mandatory explanatory statements. The overall stance is cautiously supportive of the Committee's direction while asserting the adequacy of its published plans and investment commitments.
Tone
ProceduralTopics
Key actors
Scottish Affairs Committee, UK Government (Department for Energy Security and Net Zero, HM Treasury), North Sea Transition Authority (NSTA), Great British Energy, Petroineos, Skills Development Scotland, Unite the Union, Trade unions (generically referenced)
Notable line
“… oil and gas will remain an important part of our energy mix for decades to come. Below, we have set out our responses to the Committee's recommendations and conclusions.”
Key Quotes
“The government welcomes the report 1 from the Committee.”
“Delivering our Clean Energy Superpower Mission could see our clean energy workforce nearly double from around 440,000 in 2023 to around 860,000 jobs supported across clean energy sectors and their supply chains by”
“The North Sea basin is highly mature. Oil and gas production has seen a natural decline of 75% between 1999 and”
“Additional oil and gas licensing would not reverse the natural decline of oil and gas production in the North Sea basin or change the UK's status as a net importer.”
“The North Sea 4 Jobs Service will be tailored to workers' individual needs, for example by helping applicants assess their existing skills and experience, identify target career pathways and potential vacancies …”
“… government also recognises the importance of building long-term stability and certainty in the oil and gas fiscal regime. That is why Autumn Budget 2025 announced a new Oil and Gas Price Mechanism (OGPM) will replace the EPL when it ends, giving the oil and gas sector the long-term certainty and predictability it needs to plan future investments.”
Source · parliament.uk record ↗