Rachel Reeves has been accused of imposing her energy profits levy (EPL) on the oil and gas industry for “ideological” purposes.
The Chancellor told MPs that the EPL, or windfall tax was part of a range of taxes “to ensure that those with the broadest shoulders are paying higher taxes”.
After delivering her Spring Statement, she said: “We got rid of the non-dom tax status, we’re introducing a higher value council tax, VAT on private schools, the energy profits levy…”
Opponents said this showed that the real purpose of the EPL – a levy on oil industry profits intended to tackle the net zero agenda – was actually part of a package of taxes to redistribute wealth.
Ms Reeves was criticised for not announcing changes to the EPL in her Spring Statement. The tax is officially set to expire on 31 March 2030 but opponents want Ms Reeves to activate a mechanism for ending it earlier.
Instead she is meeting North Sea industry leaders [on Wednesday] “to discuss the implications that they face and work with them to manage this uncertain period.”
Former Banff and Buchan Tory MP David Duguid, now running a management consultancy, said: “The approach by Rachel Reeves and the Labour Party to taxing the oil and gas industry to distruction here in the UK and refusing to scrap the windfall tax is entirely ideological..
“She says her meeting with North Sea oil and gas industry leaders is to discuss how they are impacted by current events. But that misses the key point that I hope those industry leaders drive home. And I hope the Chancellor listens.
“It’s not just about energy costs, jobs, skills and technology development or tax revenue – as important as they all are.
“If recent events has shown us nothing else, it is the need for the UK to be able to secure supply of fuel to keep our lights on, our homes warm and to keep the economy moving. That is what we mean by security
“Despite the most rapid decarbonisation of any developed country, Britain is still dependent on fossil fuels for 75% of our energy. Current Govt policy appears to become ever more reliant on imports of Liquified Natural Gas from Qatar.
“Surely now is the time for MPs from all parties to realise that we should be maximising our own domestic production.
Aberdeen-based Alan Stewart, partner at accountancy firm MHA, said this “underlines how closely energy security and fiscal policy are now intertwined.
“Heightened tension in the Middle East inevitably sharpens focus on the resilience of domestic supply and the role of the UK Continental Shelf within that framework.
“It also reopens questions around the energy profits levy and the longer-term competitiveness of the UK fiscal regime.”
US president Donald Trump called on the UK to “open up the North Sea” instead of importing energy supplies from Norway.
See also
Spring Statement was Spring Sideshow, says markets
#EPL #ideological #tax #redistribute #wealth #Daily #Business