Scottish MPS in revolt over North Sea windfall levy

Country’s Tory leader will vote against extension of oil and gas tax as he fears for seats north of Border

THE Scottish Conservative leader has vowed to vote against the Chancellor’s decision to extend the windfall tax on North Sea oil and gas as his party openly rebelled against the move.

Douglas Ross said he was “deeply disappointed” by Jeremy Hunt’s announcement that the Energy Profit Levy (EPL) would continue another year, until 2029, saying it was the “wrong move”.

The Moray MP said he would not vote for the legislation required to extend the levy and pledged to continue lobbying the Chancellor to “reconsider”.

Andrew Bowie, an energy minister in the Government, also expressed his opposition to the extension. The oil industry is a key employer in his West Aberdeenshire and Kincardine seat and he is defending a majority of only 843.

The decision was deeply embarrassing for the Scottish Tories, coming only days after they used their party conference in Aberdeen to repeatedly emphasise their support for the North Sea. The city is Europe’s oil capital.

Mr Ross had personally lobbied the Prime Minister and Mr Hunt not to go ahead during a pre-budget meeting of MPS on Monday. Scottish Tory insiders were dismayed by the announcement, warning that it damaged hopes of holding three seats in the north-east of Scotland, including Mr Bowie’s. They had hoped to exploit voter anger at Labour and SNP plans to wind down North Sea operations more quickly as part of the transition to net zero.

In a clear sign they had been blindsided, they used their debating time at Holyrood yesterday to press a motion in which they castigated Labour over its “proposed extended windfall tax”. Sir Keir Starmer has also proposed keeping the levy until 2029. Mr Hunt told the Commons that the Government would legislate to abolish the EPL “should market prices fall to their historic norm for a sustained period of time”.

“But because the increase in energy prices caused by the Ukraine war is expected to last longer, so too will the sector’s windfall profits,” he said.

“So I will extend the sunset on the Energy Profits Levy for an additional year to 2029, raising £1.5 billion.”

Mr Ross said: “While I accept the Chancellor had some tough decisions to make, I’m deeply disappointed by his decision to extend the windfall tax for a further year. 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.

“As such, I will not vote for the separate legislation needed to pass the windfall tax extension and will continue to urge the Chancellor to reconsider.”

Mr Bowie tweeted that he agreed with Mr Ross, but did not make clear whether he intended to vote against the legislation. He said: “The extension of the EPL is deeply disappointing. I will be working with him to resolve this.”

But Alister Jack, the Scottish Secretary, said: “I still believe that with the huge profits the energy companies have made, following Putin’s illegal invasion of Ukraine, it is right that some of that money comes back to the Treasury to be able to help people.”

Pressed whether the move had damaged the Scottish Tory election campaign, he insisted the decision would not hit jobs in the North Sea and the Conservatives were “the one party who support the oil and gas industry”.

The Dumfries and Galloway MP, who is standing down at the election, said the SNP and Labour “keep shifting their position on it” and “we are the people who are issuing the licences”.

Anas Sarwar, the Scottish Labour leader, said the Chancellor’s decision “exposes Douglas Ross’ irrelevance in his own party and leaves the SNP to the right of the Tories on this issue”.