Prime Minister Rishi Sunak has refused to kill off claims the Chancellor is teeing up a longer levy on oil and gas profits.
In Aberdeen, the Tory leader was asked to explain reports that the revenue raising policy will be extended beyond 2028.
But his refusal to confirm or deny before next week’s budget sparked concern among business leaders – and left some red-faced Tories fuming.
One Scottish Conservative said the muddled message will cause big problems in the region after they attacked Labour and the SNP over their tax plans so heavily.
“This can’t be allowed to happen,” the politician warned.
‘Not appropriate’
© Supplied by DCT DesignAsked for clarity during a briefing in Aberdeen on Friday, Mr Sunak said: “I’m sure you and everyone else will understand why it would not be appropriate for me to comment on any speculation or fiscal policy ahead of the budget.
“But what I can say is that we have consistently been the only major party that has backed the North Sea oil and gas industry.”
Mr Sunak, writing in the P&J on Friday morning, had made a big show of his support for continued oil and gas exploration.
“I want more offshore wind, I want more nuclear power and, while we transition to more green energy, I want more oil and gas that comes from home,” he wrote.
According to a report from Bloomberg, Chancellor Jeremy Hunt is considering extending the levy, due to expire in March 2028.
The same report said the move is “low down the list of potential measures under consideration”.
The windfall tax on oil and gas companies – known as the energy profits levy – raised £2.6bn in its first year. It was justified as a response to big profits in 2022.
Labour wants to increase the tax rate from 75% to 78%, the same as Norway.
Asked for clarity on the Tory position, the Treasury stated: “We keep all taxes under review and do not comment on future tax policy outside of fiscal events.”
Aberdeen & Grampian Chamber of Commerce chief Russell Borthwick, said the tax policy is now confused.
© Supplied by AJL/Chris Sumner‘Confusing’
“This confusing position from the Conservatives does not help,” he warned.
“One the one hand we have the prime minister saying ‘I want more oil and gas’, and on the other we have Treasury officials briefing that they might increase the windfall tax next week.”
Mr Borthwick had earlier written to the Chancellor calling for the removal of the Energy Profits Levy altogether.
He continued: “Right now, we are at risk of the North Sea oil and gas industry being wound down through rhetoric, rather than strategic policy.
“If this continues unchecked, it will be as chaotic as it will be economically damaging. Discretionary capital will continue to move overseas, the transition will stall, jobs lost in their thousands and a world class supply chain built up over decades – much of it in the North-east of Scotland – will go.”
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