First Minister Nicola Sturgeon has said there should be another windfall tax on the North Sea, and other firms making similar profits.
During a visit to Aberdeen yesterday, she said the UK Government should take action to protect consumers facing crippling energy bills.
“There should be another windfall tax on companies that are making windfall profits, whether that’s from the current global situation around energy or companies that have made windfall profits through different aspects of the Covid pandemic.”
Labour leader Sir Keir Starmer last week mooted an extension to the windfall tax, backdated to January, in order to help pay for a freeze on the energy price cap as average household bills are expected to soar to £4,300 by January.
The First Minister’s comments echo a similar sentiment from Scottish energy secretary Michael Matheson last week, who similarly stated that oil firms, and other sectors which enjoyed an economic boost from Covid, should face another levy to help abate the crisis.
Ms Sturgeon said: “Unless significant action is taken to try and avert this crisis, this is going to be worse than anything any of us have experienced in our lifetime. We are talking destitution for many people; people simply unable to meet the basic costs of living and lives will be lost from this crisis if action is not taken. That is how serious it is.”
However the North Sea oil and gas industry has argued that an extension to the Energy Profits Levy, unveiled in May by former Chancellor Rishi Sunak, would damage the sector and leave the UK more reliant upon overseas imports.
‘We’ve gone far enough on windfall tax’
The levy currently in place means oil firms are already facing a 65% headline rate of tax – an increase of 25% – through to the end of 2025, however there are investment incentives.
Ms Sturgeon was speaking in Aberdeen at a ScotWind supply chain summit yesterday, alongside businessman and former oil tycoon Sir Ian Wood.
Sir Ian had a differing view on whether the levy should be extended.
“I think we’ve gone far enough on windfall tax. I think we absolutely must maximise the oil and gas opportunity, we must do it in a way that we minimise the damage to the environment, everyone is very well aware of that.”
Sir Ian said there is “no point” in the UK importing more fuel from overseas, and that message had been delivered clearly to Ms Sturgeon.
Ultimately, however, the decision on another levy lies with the UK Government.
During a leadership hustings in Perth last week, former chancellor Rishi Sunak ruled out freezing the UK’s energy price cap if he becomes prime minister.
However Liz Truss did not directly respond directly to Labour’s proposed policy, simply warning against while his rival Liz Truss warned against “throwing money” at a short-term fix for the looming winter bills. crisis.
On the levy, and minimising environmental damage from the North Sea, Sir Ian Wood added: “There are some good things happening there; carbon capture and storage (CCS) has an immense impact on what we can do with the carbon dioxide that’s produced.
“So I am pretty confident we can handle the carbon produced and, on that basis, there is absolutely no point in us doing other than trying to work out the best thing to do economically. And right now I think economically what we’ve done it justified. We shouldn’t go any further, we now need to focus on maximising the amount of oil and gas we can get.”