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The biggest producer of oil and gas in the North Sea has reported that the government’s energy profits levy (EPL) has “all but wiped out our profit for the year”.

Harbour Energy said it had “reduced our UK investment and staffing levels” and bolstered its aim to expand elsewhere as a result of the hit from the windfall tax.

It has become something of a political football during the cost of living crisis to date, with opposition parties accusing the government of not going far enough in its efforts to recover costs of its energy bill support for households and businesses from extraction companies’ UK operations.

The likes of Shell and BP have revealed record profits on the back of elevated oil and gas prices due to the war in Ukraine, though their respective upstream activities expand far beyond the boundaries of the North Sea.

UK-focused Harbour had warned in January that it was to make head office workers in Aberdeen redundant in direct reaction to the hike in the levy, announced by chancellor Jeremy Hunt in November last year.

It took the EPL rate to 35% from 25% but the decision took the effective tax rate on North Sea profits to 75% because of the 40% corporation tax charge already applied.

However, some investment relief is granted under the levy.

Harbour’s chief executive said the job losses, yet to be completed, would be “significant” and it was looking to cut costs by $40m this year.

its profits after tax for 2022 came in at $8m (£6.7m) due to a “$1.5bn one off non-cash deferred tax charge associated with the EPL”, the company said.

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BP boss defends UK tax contribution

But shareholder distributions of $553m were made during the year and it proposed a $100m final dividend which marked a 9% increase in awards during the year.

A new share buyback plan worth $200m was also revealed.

Shares fell 2% at the open.

Chief executive Linda Z Cook said: “The UK Energy Profits Levy, which applies irrespective of actual or realised commodity prices, has disproportionately impacted the UK-focused independent oil and gas companies that are critical for domestic energy security.

“For Harbour, the UK’s largest oil and gas producer, it has all but wiped out our profit for the year.

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“This has driven us to reduce our UK investment and staffing levels.

“Given the fiscal instability and outlook for investment in the country, it has also reinforced our strategic goal to grow and diversify internationally.”

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‘These are the windfalls of war’

Labour is among government critics urging that the EPL is more punitive given that households and businesses are suffering from record energy bills.

Mr Hunt is widely expected to maintain the energy price guarantee at its current level of £2,500 in his budget next week rather than cut the level of support from April as had been planned.

This is due to a fall in wholesale gas costs which has reduced the expected cost of the financial aid package.

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Sky News joins police raid on Turkish barbershop – and all is not as it appeared

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Sky News joins police raid on Turkish barbershop - and all is not as it appeared

In a small town in Suffolk, a team of police officers walk into a Turkish barbershop.

It’s clean and brightly painted, the local football team’s shirt displayed on one wall. Two young men, awaiting customers, hair and beards immaculate, tell officers they commute to work here from London.

Step through the door at the back of the shop and things look very different.

In a dingy stairwell, a bed has been crammed on to a landing, and a sofa just big enough to sleep on is squeezed under the stairs. The floor and steps are covered with empty pizza boxes, food containers and drink bottles. There’s a pair of socks on the floor and a T-shirt on the bed. An unopened prescription sits on a table.

At least one person is clearly living here, but possibly not by choice.

“This could be linked to exploitation, this could be linked to some forms of modern slavery,” says John French, the modern slavery vulnerability advisor for Suffolk Constabulary.

“You have to ask yourself when you come across this sort of situation, why would someone want to live in these sorts of conditions?”

John French speaks to Paul Kelso
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John French speaks to Paul Kelso

Behind a second door, this one padlocked, is a second room. This one cleaner, but clearly not safe.

Phrases in Turkish and English have been scribbled on post-it notes stuck to the wall and officers find a driving licence with a local address.

“Judging by the state of the room, this could be an ‘Alpha’ living in here,” says Mr French.

“An ‘Alpha’ is someone who’s previously been exploited,” he explains. “They have been given a little bit of trust and act like a kind of supervisor. They are very important to us, because we want to get them away from others before they can influence them.”

A brand-new Audi SUV is parked at the back.

What’s going on here?

We are in Haverhill, a small town in Suffolk bypassed by the rail network and the prosperity enjoyed elsewhere in the county, its central street bearing the familiar markers of town-centre decline.

There’s a Costa, a Boots, a branch of Peacocks, and several pubs and cafes, but they are punctuated by “cash intensive” businesses, including barbers, vape stores and takeaways, and several vacant premises that stand out like missing teeth.

It’s the cash-intensive businesses that have brought the attention of police, these local raids part of the National Crime Agency’s (NCA’s) Operation Machinize, targeting money laundering, criminality and immigration offences hidden in plain sight on high streets across England.

There are 17 premises of interest in Haverhill alone, among more than 2,500 sites visited since the start of October, resulting in 924 arrests and more than £2.7m of contraband seized.

In a single block of five shops on the High Street, four are raided. A sweet shop yields a haul of smuggled cigarettes stashed in food delivery boxes.

In the Indian restaurant three doors down, a young Asian man is interviewed via an interpreter dialling in on an officer’s phone. They establish his student visa has been revoked, and he has had a claim for asylum rejected.

The aim is to disrupt criminality using any means possible, be they criminal or civil. Criminal or not, the living conditions at the barbers are likely to fall foul of planning and building regulations enforceable with penalties including fines and closure, so officials from the council and fire safety are on hand.

Trading Standards are here to handle counterfeit goods seizures, and immigration officers are on hand to check the status of those questioned, pursuing anyone without permission to be in the UK.

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‘A full spectrum of criminality’

Sal Melki, the NCA’s deputy director of financial crime, explains why the agency is targeting apparently small operations.

“We’re finding everything from the laundering of millions of pounds into high-value goods like really expensive watches, through to the illicit trade of tobacco and vapes, and people that have been trafficked into the country working in modern slavery conditions. We’re seeing a full spectrum of criminality.

“We want to disrupt them with seizures, arrests, and prosecutions and make sure bad businesses are replaced with successful, thriving businesses that make us all feel safer and more prosperous.”

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The last visit is to a small supermarket. Through the back door is another hidden bedroom, this one not much larger than a broom cupboard, with a makeshift bed made from a sheet of plywood and a duvet.

The man behind the counter, who says he’s from Brazil via Pakistan, claims not to live in the shop, but his luggage is in a storeroom. He’s handcuffed and questioned by immigration officers, and admits working illegally on a visitor visa.

“If he is proven to be working illegally he’ll be taken to a detention centre and administratively removed,” an immigration officer tells me. “That’s not the same as deportation, the media always gets that wrong. He’ll be given the chance to book his own ticket, and if not, he’ll be removed.”

Shortly afterwards, he’s put in a police car, his large red suitcase squeezed on to the front seat, and driven away.

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Unemployment rate jumps to highest level since late 2020 ahead of budget

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Unemployment rate jumps to highest level since late 2020 ahead of budget

The UK’s jobless rate has risen to a level not seen since late 2020, according to official figures released ahead of the budget.

The Office for National Statistics (ONS) reported a figure of 5% covering the three months to September – up from 4.8% reported last month. It was a larger leap than economists had predicted, and the ONS said that men were worst affected by the shift.

It leaves the jobless rate at its highest level since December 2020-February 2021.

It had stood at 4.1% when Labour took office last year.

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There was no better news for Chancellor Rachel Reeves in wider, experimental, HMRC data released by the ONS, which showed a 32,000 decline in payrolled employment during October.

That suggested a pause to a more recent trend of declines slowing since sharp falls first witnessed in the spring of this year.

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It was April when measures introduced in Ms Reeves’s first budget came into effect, with hikes in minimum pay and employer national insurance contributions hammering employment and investment sentiment in the private sector.

It also coincided with peak US trade war uncertainty as Donald Trump ramped up his tariffs.

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Where Reeves stands on tax rises

ONS director of economic statistics Liz McKeown said of the data: “Taken together these figures point to a weakening labour market.

“The number of people on payroll is falling, with revised tax data now showing falls in most of the last 12 months.

“Meanwhile the unemployment rate is up in the latest quarter to a post pandemic high. The number of job vacancies, however, remains broadly unchanged.

“Wage growth in the private sector slowed further, but we continue to see stronger public sector pay growth, reflecting some pay rises being awarded earlier than they were last year.”

In good news, the overall slowing in the pace of wage growth and weakening jobs market should help bolster the case for an interest rate cut by the Bank of England next month, assuming inflationary pressures continue to ease after last week’s rate hold.

The ONS figures were released as the clock ticks down to the chancellor’s second budget due on 26 November.

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The state of UK economy ahead of budget

Ms Reeves used an event in Downing Street last week to prepare the ground for a painful series of measures that are expected to be only partly offset by some announcements to keep Labour MPs onside, as she stares down a black hole in the public finances believed to be in the region of £30bn.

She has signalled a break from Labour’s manifesto tax pledge not to raise income tax, national insurance or VAT, on the grounds that the world has changed since that promise was made.

The chancellor’s gripes include Brexit and the effects of the US trade war.

Nevertheless, a spending priority would appear to be the lifting of the two-child benefit cap. That would take an estimated 350,000 children out of poverty, according to the Child Poverty Action Group.

Liberal Democrat Treasury spokesperson, Daisy Cooper, said of the employment data: “Surely the writing is on the wall now for the chancellor’s jobs tax.

“Everyone except Rachel Reeves seems to have woken up to the fact that forcing small businesses to pay more in tax for giving people jobs would damage job opportunities. Now the proof is staring her in the face.

“The government must reverse their damaging national insurance hike at the budget, and commit to saving the small businesses who employ millions in Britain and are at risk of collapse, if they’re to have any hope of reversing today’s concerning trend.”

The Conservatives accused Ms Reeves of presiding over a “high-tax, anti-business” agenda.

Secretary of State for Work and Pensions, Pat McFadden, said: “Over 329,000 more people have moved into work this year already, but today’s figures are exactly why we’re stepping up our plan to Get Britain Working.

“We’ve introduced the most ambitious employment reforms in a generation to modernise jobcentres, expand youth hubs and tackle ill-health through stronger partnerships with employers.

“And this week we’re going further by launching an independent investigation that will bolster our drive to ensure all young people are earning or learning.

“We’re backing businesses to grow and create jobs by cutting red tape, signing trade deals and securing hundreds of billions in investment, which helped make the UK the fastest growing economy in the G7 in the first half of this year.”

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UK’s Prevent counter-terrorism strategy ‘is no longer keeping the country safe’, commission warns

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UK's Prevent counter-terrorism strategy 'is no longer keeping the country safe', commission warns

The UK’s Prevent counter-terrorism strategy “is no longer keeping the country safe” and needs a “radical overhaul”, an independent commission has found.

It said 90% of people referred to the scheme are turned away because they have no obvious ideology, even though they can go on to commit violent crimes.

In a wide-ranging report, the commission also recommended narrowing the definition of what constitutes terrorism to provide greater clarity.

And it called for decisions by government to proscribe organisations to be reviewed every five years to ensure proportionality. That recommendation comes as the Home Office faces a legal challenge over its decision to ban the activist group Palestine Action.

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Record referrals to Prevent scheme

‘Not fit for purpose’

Full details of the commission’s findings – based on a three-year review into the UK’s counter-terrorism measures – will be unveiled at the Royal United Services Institute (RUSI) think tank in London today.

The starkest conclusions are about Prevent.

“The evidence we had shows that the present approach to Prevent is not fit for purpose,” said Sir Declan Morgan, a former chief justice of Northern Ireland who chaired the commission.

Underlining the failure of the scheme, Axel Rudakubana – the Southport murderer who stabbed three girls to death and attacked 10 other people at a Taylor Swift-themed dance class in July last year – had been referred to Prevent three times.

But no evidence had been found of a fixed ideology, so his case was closed in 2021. The teenager committed the atrocity three years later.

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“The Independent Commission on Counter-Terrorism says that Britain’s counter-terrorism strategy is no longer keeping the country safe,” according to an executive summary of the report.

“It calls for a radical overhaul of Prevent to make it part of a broader initiative dealing with violence and no longer based on a flawed radicalisation model.”

A changed terror threat

The commission found there is no evidence that radicalisation is a predictor of whether a person will become a terrorist.

It said terrorist threats in the UK have morphed from plots by groups such as al Qaeda or Islamic State to “self-initiated” individuals with “complex, mixed, unclear or unstable ideologies”.

As a result, there has been a surge in referrals to the counter-terrorism scheme.

“This risks overwhelming Prevent and missing individuals being drawn into terrorism,” the report warned.

It said more than 58,000 people have been referred to Prevent since 2015, but more than 90% had no counter-terrorism concerns.

The other 10% showed no evidence of criminal activity.

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Youth extremism drives Prevent referrals

The commission also said the majority of referrals are children and young people, even though they only comprise 21% of the population.

“Prevent needs a major overhaul and integration into a wider system to which all those susceptible of being drawn into violence can be referred,” it said.

The commission described this as a “single access point” that would be the first port of call for concerns about the susceptibility of individuals to being drawn into violence.

Those at risk of involvement in terrorist violence would then be passed to Prevent, while others would be dealt with by different agencies.

On tightening the definition of terrorism, the commission recommended what it called a more focused statutory definition.

“Terrorism should be defined narrowly as acts intended to coerce, compel, or subvert government or public institutions, and the threshold for property damage should apply only to conduct causing serious risk to life, national security, or public safety, or involving arson, explosives, or firearms methods inherently capable of causing unpredictable harm,” it said.

Sir Declan said: “Our narrower definition provides greater clarity while ensuring the government can tackle terrorism effectively.”

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