Douglas Ross has been left humiliated after Rishi Sunak and Jeremy Hunt ignored his repeated personal pleas not to extend the windfall tax on oil and gas.

Labour and the SNP said it proved how irrelevant the Scottish Conservative leader was to his colleagues in London. 

In his Spring Budget, the Chancellor said the sunset clause on the Energy Profits Levy would be pushed back a year to March 2029, raising £1.5 billion, helping to pay for his 2p cut to National Insurance.

The Scottish Conservative leader said he was “deeply disappointed” by the extension and that he would vote against the measure in the Commons.

READ MORE: Jeremy Hunt paves way for spring election with tax cuts

Speaking to journalists at a briefing after the Spring Budget, Alister Jack insisted that the extension would not lead to any job losses. 

“The profits levy being extended for another year, I don’t believe will have any impact on jobs," the Scottish Secretary said. 

However, that was disputed by David Whitehouse, CEO Offshore Energies UK. He told The Herald it was "hard to understand why this wouldn't impact employment."

"Long term investment decisions need a long term approach," he added.

Awkwardly for the Scottish Tories, the Budget announcement came as they used their opposition day in Holyrood for a debate on "Backing Scotland’s Oil and Gas Sector."

Mr Hunt's decision could do real damage to the party in the next general election

The Tories are defending three seats in the North East, including that of Energy Minister Andrew Bowie, who is defending a majority of just 843.


Speaking to journalists at the Scottish Tory conference, Mr Ross warned that extending the windfall tax would be “an unacceptable blow” to the industry and workers.

He said he had and would continue to make that case "most strenuously to the Chancellor."

Despite this, Mr Hunt was not for shifting.

“We want to encourage investment in the North Sea so we will retain generous investment allowances for the sector,” he told MPs.

“We will also legislate in the Finance Bill to abolish the Energy Profits Levy should market prices fall to their historic norm for a sustained period of time.

“But because the increase in energy prices caused by the Ukraine war is expected to last longer, so too will the sector’s windfall profits.

“So I will extend the sunset on the Energy Profits Levy for an additional year to 2029 raising £1.5 billion.”

READ MORE: Scotch whisky industry welcomes alcohol duty freeze

In a statement shortly after the Budget, Mr Ross said he welcomed a number of measures announced by the Chancellor, particularly the National Insurance cut and the freeze on duty on fuel and whisky.

“However, while I accept the Chancellor had some tough decisions to make, I’m deeply disappointed by his decision to extend the windfall tax for a further year,” he said.

“The SNP and Labour have abandoned 100,000 Scottish workers by calling for the taps in the North Sea to be turned off now.

“Although the UK Government rightly oppose this reckless policy – and have granted new licences for continued production in the North Sea – the budget announcement is a step in the wrong direction.

“As such, I will not vote for the separate legislation needed to pass the windfall tax extension and will continue to urge the Chancellor to reconsider.”

Mr Bowie agreed. He said there was “much in this Budget to welcome” but “the extension of the EPL is deeply disappointing".

Labour's Anas Sarwar said: “The Chancellor’s decision to follow Labour’s lead and extend the windfall tax on the profits of oil and gas giants exposes Douglas Ross’ irrelevance in his own party and leaves the SNP to the right of the Tories on this issue."

Màiri McAllan, the Cabinet Secretary for Energy, said the snub demonstrated "just how little influence the leader of the Scottish Tory has when it comes to his leadership in London".

"I understand he made personal representations. And he must be utterly embarrassed that he's been ignored," she added.

Mr Sunak first announced the windfall tax - set at 65% - back in May 2022 after Russia’s invasion of Ukraine led to a surge in wholesale and retail energy prices.

He always insisted it would be temporary and was due to end next year.

However, after Liz Truss’s mini-budget crashed the economy, Mr Hunt increased the rate to 75% and extended it for a further two years to 31 March 2028.

READ MORE: Douglas Ross warns Chancellor against Budget Windfall Tax plan

Responding to the Budget, Ryan Crighton, policy director at Aberdeen & Grampian Chamber of Commerce, said the decision would leave the North East paying the price.

He said investors were already walking away.

“This is the fourth Tory tax raid on the North Sea in two years and heaps more uncertainty on a sector which needs stability to survive.

“Not only is Jeremy Hunt losing the support of industry, he is also losing the support of his North-east parliamentarians who understand that the windfall tax is bad for jobs, bad for investment, bad for energy security and bad for the energy transition."

He added: “We are already seeing investors walking away from deals – with some showing open dissent towards the UK – and if that gathers pace, then the 1,000 jobs we have already lost to the windfall tax could be a drop in the ocean compared to what is to come.”

Mr Whitehouse agreed. He added: “We have identified £200 billion of investment in oil and gas and the UK’s wider energy transition awaiting the green light which will not happen with such globally uncompetitive taxation in place. 

“Thousands of jobs and billions of pounds in national revenue are at risk because of the destabilising impact of these tax decisions.” 

There was dismay from the Scottish Greens too, but they said the Chancellor should have taken the opportunity to close the investment allowance which sees oil and gas producers get 91p in tax relief for every £1 they invest.

Environment spokesperson, Mark Ruskell said: “Closing that loophole could bring in billions to solve a cost of living crisis that is destroying ordinary people’s lives.

“The UK government could even have chosen to make those tax reliefs available for renewable investments to create the jobs of the future today, but it chose not to.”