Oil and gas sector a ‘cash cow’ for the Treasury
Jeremy Hunt has confirmed that he will raise the energy profits levy – or windfall tax – from 25% to 35%, prompting an Aberdeen business leader to accuse the government of using the industry as a cash cow.
It will see oil and gas companies’ tax bill increase from 65% to 75% of profits on UK operations., and it will extended from December 2025 to until March 2028.
The Chancellor is also introducing a temporary 45% levy on electricity generators. Together these taxes will raise £14bn next year.
Ryan Crighton, policy director at Aberdeen & Grampian Chamber of Commerce, said the industry will be left wondering which direction the government wishes to take on energy.
“It has become impossible to keep up with what this government wants from the energy sector,” he said.
“Does it want to increase energy security and accelerate the UK’s path to net zero? Or does it simply want to use the North Sea as a cash cow? Today’s £80billion tax raid sends a clear signal that it is the latter.
“Aberdeen and its energy sector is again plugging the UK’s fiscal deficit and the bare minimum we should be getting in return is a Green Freeport and the acceleration of support for the Acorn project on the Buchan coast.
“We must now hear positive announcements on both of these projects in the months ahead. Anything else will amount to a complete betrayal of this region.”
The sector feels it is getting little support from any of the political parties who have all called for windfall taxes.
This is despite warnings that additional taxes will force a re-think of investment and mean that the opportunity to accelerate the energy transition is being missed.