Chancellor Jeremy Hunt branded the oil and gas industry “losers” in his own budget, one day after extending the windfall tax on their profits for another year.
His decision on Wednesday caused anger among industry figures – and totally contradicted Scottish Tory leader Douglas Ross’s key electoral message in the region.
“Who are the losers?” said Mr Hunt, responding to a question on BBC Radio’s Today programme.
“Foreigners who are resident in the UK who were able to pay a cheque and avoid paying tax at the same rate as everyone else, the so called non-doms. They are going to pay significantly more tax.
“I’ve also asked the Scottish oil and gas industry to pay an additional contribution because the war in Ukraine is lasting longer. Oil and gas prices are going to stay higher for longer.
“I think it’s fair they can make an additional contribution to the cost of living.”
Cutting the levy on energy profits was a central demand of the Scottish Tories, and was supposed to be a clear line with Labour and the SNP.
But Moray MP Douglas Ross failed to convince the Treasury, leaving him red-faced after spending days condemning Labour’s plan to extend the tax.
Mr Hunt said the levy will go to 2029 and raise an extra £1.5 billion.
Stunned north-east Tories
Scottish Tories were stunned, a few days after boasting of support for oil and gas businesses in their party conference in Aberdeen.
In another awkward twist, they had planned a debate in Holyrood at the same time as the budget entirely focused on their support for oil and gas.
One senior Tory said anger is now turning on Mr Ross – a party leader and MP who “should be able to be heard” in London.
UK Government energy minister Andrew Bowie – the MP for West Aberdeenshire and Kincardine – is also in a difficult position.
He would have to lose his government job if he votes against the measure.
On Sunday, he told us he expected the tax to be cut or even ditched.
Conversation