𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Rachel Reeves reaffirmed her commitment to end the windfall tax on North Sea oil and gas as she met energy bosses.

The Chancellor was set to discuss the gas and oil prices sent soaring by the Middle East war in talks with firms including BP, TotalEnergies and Serica.

Ms Reeves came under pressure ahead of the Downing Street discussions from Scottish First Minister John Swinney to axe the charge, which is officially known as the energy profits levy.

Introduced by the Tory government in the wake of the war in Ukraine – which sparked a sharp rise in energy prices – the charge was brought in to claw back some of these unexpected profits for the Treasury.

Ahead of the talks, the Prime Minister’s spokesman told reporters: “The Chancellor will convene a meeting with industry leaders from oil and gas firms today… including BP, TotalEnergies and Serica.

“They’ll discuss the ongoing volatility in the oil and gas prices due to the conflict in the Middle East.

“The Chancellor will make clear that she remains committed to end the energy profits levy and replace it with a more permanent and predictable regime.

“She’ll be reaffirming her commitment to support jobs and investment in the industry and look at ways to protect everyday people from the downstream impact of these costs.”

Asked whether protecting the UK public could involve an energy bill relief package similar to the one introduced by Liz Truss in 2022, the spokesman declined to “get ahead of the meeting”.

Earlier, Mr Swinney again insisted it is “utterly essential” the UK Government scraps the windfall tax, which he said is impacting investment in the North Sea and costing jobs.

He said the current “uncertainty over energy supplies” as a result of the conflict in the Middle East is now a “material consideration” for the scrapping of the charge.

Speaking during a visit to Inverness, Mr Swinney said he had hoped the Chancellor would use Tuesday’s spring statement to axe it.

When that did not happen, Holyrood’s Finance Secretary Shona Robison said Ms Reeves must use Wednesday’s meeting with North Sea industry leaders to “announce an end to this tax on Scotland’s energy”.

Mr Swinney meanwhile insisted: “Now that we have the conflict in the Middle East, I think it is utterly essential that the energy profits levy is removed.

“I had hoped it would be removed yesterday in the spring statement. It hasn’t been but the Chancellor is meeting the industry today.

“I hope that results in the removal of the energy profits levy.”

Mr Swinney, speaking to the Press Association, added: “I’ve been saying to the UK Government for some time that the energy profits levy should be removed because it is hampering investment in the North Sea oil and gas sector, which is resulting in a loss of employment at a much faster rate than we anticipated.”

With the conflict in the Middle East leading to “uncertainty over energy supplies in the period to come” the First Minister said that is now a “material consideration in whether the energy profits levy should be maintained”.

He insisted however: “I don’t think there is a case for it and it should be removed.”

But Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said: “Conflict in the Middle East and rising global gas prices show exactly why the windfall tax remains necessary, not why it should be scrapped. When geopolitical tensions push up prices, energy companies and their shareholders benefit while households face another round of higher bills from July 1.

“Energy firms have made tens of billions in profits in recent years even with the energy profits levy in place, so the idea that removing it will suddenly make energy cheaper or more secure simply doesn’t stand up.

“The North Sea is declining because of the geology of an ageing basin, not because companies are paying a fair share of tax.

“Instead of handing the industry a tax break, governments should be using these revenues to cut bills, tackle energy debt, support workers through the transition and invest in warm homes and clean energy so households are protected from exactly this kind of global price shock.”

Meanwhile, Energy Secretary Ed Miliband rejected calls for the Government to reverse its ban on new licences for North Sea drilling.

He wrote on X: “The Government continues to monitor the situation in oil and gas markets and work with our international partners. In recent days I have been in contact with a number of international colleagues including the Qatari and Saudi Energy Ministers, the IEA (International Energy Agency), and key industry figures.

“Conflict in the Middle East is yet another reminder that the only route to energy security and sovereignty for the UK is to get off our dependence on fossil fuel markets, whose prices we do not control, and on to clean homegrown power we do.”

He hit out at Tory leader Kemi Badenoch’s argument that new North Sea exploration licences could cut bills, noting they “won’t take a penny off bills” because “oil and gas is sold on international markets”.