Humza Yousaf said he would maintain the North Sea windfall tax at current levels, as he visited Aberdeen to blast plans from Labour on Monday.
The Scottish First Minister said Keir Starmer’s proposals to extend and hike the levy would deliver a jobs “tipping point” which, according to analysis, would see a worst-case scenario of 100,000 jobs lost.
Mr Yousaf’s opponents accused the SNP of “breathtaking hypocrisy” and being “incoherent”, citing the Scottish Government’s “presumption against” new exploration for Scotland’s energy strategy.
When asked what he would do differently to Labour, Mr Yousaf said he would maintain the tax at current levels, put in place by the UK conservative government in 2022.
He said: “We do believe in a windfall tax, we believe in it at the current levels and we believe in it, because it should protect people during the cost of living crisis, of which, of course, energy bills are the most significant factor for most people.”
The Labour proposals would extend the life of the levy to the end of the next parliament, hike the headline rate of tax from 75% to 78% and, crucially, remove any investment allowances.
That latter point has been seen as a major barrier to future investment, with trade body Offshore Energies UK (OEUK) estimating £26bn of economic value will be lost.
‘There are no windfall profits to tax’
© Supplied by AJL/Chris SumnerAberdeen and Grampian Chamber of Commerce chief executive Russell Borthwick told Energy Voice following an industry roundtable with Mr Yousaf: “We welcome the first minister’s and engagement with industry today, and his recognition that the energy sector is good for Scotland. We would like to see Sir Keir Starmer follow suit and bring his front bench to Aberdeen to hear the concerns of our members.
“Oil prices have returned to normal levels, therefore there are no windfall profits to tax. We should be talking about removing the tax, not extending it in any form.”
The chamber boss outlined “three concerns” regarding Labour’s policy “the tax rate, the removal of investment allowances, and the presumption against future exploration in the North Sea”.
Mr Borthwick added: “While the SNP’s opposition to Labour windfall tax proposals is welcome, at present Humza Yousaf still shares Labour’s opposition to new fields in the North Sea, something the industry needs to see addressed in his revised energy strategy.”
He explained the need to “dispel the myth” that accelerating North Sea decline will “us to net zero quicker.”
Mr Borthwick concluded: “It does not – it makes the energy transition even harder, decimates the workforce and supply chain, and leaves us even more reliant energy imports.”
David Whitehouse, OEUK chief executive said: “It’s so important the First Minister’s speech today began to recognise our energy transition must be done in collaboration with people, not done to them.”
MR Whitehouse emphasised: “It’s essential we choose a homegrown transition that makes the most of our oil and gas heritage and builds genuine partnerships with our world class firms and workforce.
Labour stands to create a ‘tipping point’, Yousaf claims
Last week investment bank Stifel said 100,000 jobs could be lost in a “worst case scenario” under Labour’s windfall tax plans.
Mr Yousaf cited these figures saying: “What we’re hearing from the industry, you’re not hearing it from government, its industry figures telling you that tipping point that Labour is suggesting will mean 100,000 jobs on the scrap heap. That to me is not a just transition.”
Douglas Ross said: “Humza Yousaf is displaying breath-taking hypocrisy masquerading as a friend of Scotland’s oil and gas industry when he and the SNP have abandoned it at every opportunity.
“The SNP have a long-standing ‘presumption against’ policy on all new oil and gas licences, they oppose Rosebank, they were the first party to call for a windfall tax and it’s only a few months since Humza Yousaf was proclaiming the end of the industry in a speech in New York.”
© Ryan Duff/DCT MediaThe SNP leader explained his party’s position regarding the presumption against oil and gas in a media question and answer session in Aberdeen.
Yousaf said: “We’re going to take an evidence-based approach. We’ve said that from day one.”
He explained that the SNP’s position looks at the impact of “any oil and gas licence in relation to climate compatibility operations.”
Yousaf added that his “evidence-based approach” will ask what new licences mean for workers “and what it means for our energy security.”
Labour’s Ian Murray lambasted the first minister for not going far enough. He said “its beggars’ belief” that Mr Yousaf thinks the tax paid by a person earning more that a person earning more than £28,500 per year should go up while oil and gas firms remain the same.
Mr Murray added: “Labour’s plans will tackle the cost of living crisis and drive down bills for good,” he said this will happen by delivering cleaner energy through the party’s proposed “publicly owned GB Energy.”
He added that Labour predicts 50,000 “clean power jobs” will be created in Scotland as a result of its plans to bring in a publicly owned energy firm.
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