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Hunt’s decision on windfall tax deeply disappointing, Scottish Tory leader says

Douglas Ross said extending the Energy Profits Levy was a ‘step in the wrong direction’.

Katrine Bussey
Wednesday 06 March 2024 10:19 EST
The decision to extend the windfall tax on the energy sector was branded ‘deeply disappointing’ by Scottish Conservative leader Douglas Ross. (Jane Barlow/PA)
The decision to extend the windfall tax on the energy sector was branded ‘deeply disappointing’ by Scottish Conservative leader Douglas Ross. (Jane Barlow/PA)

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Scottish Tory leader Douglas Ross has said he is “deeply disappointed” that the Chancellor extended the windfall tax on oil and gas firms, branding the decision from Jeremy Hunt as a “step in the wrong direction”.

Mr Ross spoke out after the UK Chancellor confirmed the levy would now remain in place until 2029.

The 35% surcharge on profits due to high energy prices had been scheduled to end in March 2028, but in his Budget statement Mr Hunt said: “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.”

Overall the Treasury said spending decisions in the Budget would see the Scottish Government receive an additional £295 million in 2024-25, with Scottish Secretary Alister Jack saying this cash would be “in addition to the largest block grant since devolution began”.

Challenging ministers at Holyrood, the Conservative said: “There can be no excuses for not providing excellent public services in Scotland.”

But business leaders in the north-east of Scotland warned of the impact of extending the windfall tax could have, claiming the move “is bad for jobs, bad for investment, bad for energy security and bad for the energy transition”.

Ryan Crighton, the policy director at Aberdeen and Grampian Chamber of Commerce, said: “This is the fourth Tory tax raid on the North Sea in two years and heaps more uncertainty on a sector which needs stability to survive.”

Mr Ross said that although the Chancellor had had “some tough decisions to make” in the Budget, he added he was “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 Scottish Secretary Alister Jack said that the Budget “keeps Scotland and the whole of the UK on the right path for the future, with a clear focus on economic growth, jobs and prosperity”.

He said that “hardworking Scottish families will see more money in their pockets with a second national insurance cut” – with a 2p reduction anounced for April that will be worth an average of £450 for workers and £350 for the self-employed.

It will be the second reduction in the levy this year – with a similar 2p cut having already come into force in January.

Mr Jack went on to welcome the freeze in fuel duty aand the freeze in spirits duty, which he said would “boost our biggest export, whisky”.

With the Budget also promising up to £10 million of investment for the SaxaVord Spaceport in Shetland the UK Government minister said this “puts Scotland ahead in the new space race” as he spoke about the “exciting prospect of a first satellite launch before too long”.

The richest quarter of workers benefit 14 times more than the poorest quarter from the national insurance cut.

Roz Foyer, STUC general secretary

However, the Scottish Trades Union Congress (STUC) accused the Chancellor of “cutting public spending and cutting taxes that mainly benefit the rich”, with general secretary Roz Foyer warning this would lead to the “further destruction of our public services”.

She said: “The richest quarter of workers benefit 14 times more than the poorest quarter from the national insurance cut.”

Citizens Advice Scotland complained there was a “complete absence of the kind of support those on lower incomes need” in the Chancellor’s statement.

The charity’s social justice spokesperson Emma Jackson said: “This Budget failed to meet the scale of the challenge of the cost-of-living crisis, and the legacy of debt and destitution it will leave.”

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