Reeves’s ‘reckless’ failure to axe windfall tax will energise Tory and SNP Holyrood election campaigns
Daily Telegraph 26/11/25
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A furious, but inevitable, row has erupted over the future of Scotland’s North Sea oil and gas industry after the so-called windfall tax on its profits was not abolished in the Budget, as had been demanded by both the Scottish Tories and SNP.
The fact that the energy profits levy (EPL) has not been axed is set to play a major role in the campaign, which has already started, for the Scottish Parliament elections due next May.
Thanks to what many will claim is an unholy alliance between the Tories and the SNP on this issue, only Labour now supports the continuation of the levy.
That the tax would be ended in the Budget had been widely expected by political observers as North Sea oil profits have slumped alarmingly.
Opponents of the levy have consistently claimed that it scares off oil companies from investing in the North Sea or in developing existing fields and insist that such firms would return to the north-east of Scotland if the EPL was abolished.
However, by keeping it and giving in to Ed Miliband, Sir Keir Starmer and Rachel Reeves are now being accused of “sounding the death knell” for the entire industry and of being responsible for an estimated 1,000 oil and gas workers losing their jobs every month by failing to scrap the levy.
Harriet Cross, the Conservative MP for Gordon and Buchan, where many oil workers live, told the Commons: “Highly skilled oil and gas workers are now living in fear as a direct result of Labour’s shameful, idealistic desire to close down this vital sector.
“At the heart of this are people with families who have given decades to an industry that is being destroyed by this Labour government.
“The Chancellor’s Budget is economic sabotage that is not worth the paper it’s written on and is an absolute betrayal to the north-east of Scotland.
‘A really dark day for our oil industry’
In what turned out to be an emergency debate in the Holyrood parliament, Douglas Lumsden, Conservative MSP for North East Scotland, described the failure to end the levy as “reckless”, before adding: “This is a really dark day for our oil industry.”
Douglas Ross, the former Scottish Tory Party leader, and Andrew Bowie, the shadow Scottish Secretary, both have constituencies containing many oil workers and attacked the Government, claiming that the levy was killing off the oil industry.
Mr Ross said: “Labour’s decision to keep it [the EPL] shows they don’t care about the North-East and the thousands of workers who stand to lose their jobs. Utterly disgraceful.”
Mr Bowie added that he feared that “the death knell is being sounded for our oil and gas industry”.
Whether the MP is right about a death knell for the oil business, Labour’s chances of success in next May’s Holyrood election now look decidedly more doubtful.
The Energy Secretary’s net-zero target and his opposition to the development of new oil fields, such as the giant Rosebank field off Shetland, have always been controversial in Scotland and especially in the several marginal constituencies around Aberdeen, for long the UK’s oil capital.
Instead of cancelling the EPL, Mr Miliband announced a new five-year project entitled “The North Sea Future Plan” – a UK Government undertaking to “manage existing oil fields” while not allowing any new ones.
It is bound to be seen as little more than sop by his opponents. And, frankly, a sop is exactly what it is.
One of its main objectives is said to be to protect the existing jobs and communities for oil workers but that won’t be easy, as the Scottish Affairs select committee has already warned.
Earlier this year it said that new jobs for former highly paid workers in the oil and gas industry were not being created fast enough.
Can Mr Miliband’s new “baby” on the road to net zero sort this problem … and quickly? We shall see.
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