Senior Scottish Conservatives have spoken out against the Chancellor’s decision to extend the windfall tax on energy firms in his Budget – with UK energy minister Andrew Bowie branding the move “deeply disappointing”.
The West Aberdeenshire and Kincardine MP spoke out as Scottish Tory leader Douglas Ross claimed the move by Jeremy Hunt is a “step in the wrong direction”.
Their comments came as the industry body Offshore Energies UK (OEUK) warned the impact of extending the windfall tax will mean “thousands of jobs and billions of pounds in national revenue are at risk because of the destabilising impact of these tax decisions”.
Chief executive David Whitehouse said: “We have identified £200 billion of investment in oil and gas and the UK’s wider energy transition awaiting the green light which will not happen with such globally uncompetitive taxation in place.”
But Scottish Secretary Alister Jack dismissed the concerns, telling journalists: “The profits levy being extended for another year, I don’t believe will have any impact on jobs.”
Mr Hunt used Wednesday’s Budget to confirm the 35% surcharge on profits due to high energy prices – which was due to end in March 2028 – is being extended for another year.
The Chancellor told MPs: “Because the increase in energy prices caused by the Ukraine war is expected to last longer, so too will the sector’s windfall profits.
“So I will extend the sunset on the Energy Profits Levy for an additional year to 2029, raising £1.5 billion.”
Mr Bowie said he will look to work with the Chancellor to “resolve this”.
Mr Ross conceded the Chancellor had had “some tough decisions to make” in the Budget, but added he too is “deeply disappointed by his decision to extend the windfall tax for a further year”.
The Scottish Conservative leader said: “The SNP and Labour have abandoned 100,000 Scottish workers by calling for the taps in the North Sea to be turned off now.
“Although the UK Government rightly oppose this reckless policy – and have granted new licences for continued production in the North Sea – the Budget announcement is a step in the wrong direction.”
But Mr Jack said with oil and gas prices having risen “enormously” in the wake of Russia’s invasion of Ukraine, it is “right” for some of the cash raised to come back to the Treasury.
The Scottish Secretary said: “Thanks to Putin’s behaviour, the prices have gone up enormously and the profits have gone up exponentially.
“Therefore some of that needs to come back to support the Government in helping families and improving public services.”
Environmental campaigners at Friends of the Earth Scotland said extending the levy is “the very least the Chancellor could have done to claw back some of the vast wealth that energy companies have extracted from the UK public”.
Its just transition campaigner Rosie Hampton said “fossil fuel giants have forced millions of households into fuel poverty while upholding the climate-destroying status quo”.
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