THE SNP have been accused of making a U-turn on a windfall tax on energy companies making record profits after one was announced today.
During Rishi Sunak’s announcement of extra government support to ease the cost-of-living crisis, Labour shadow chancellor Rachel Reeves attempted to portray the Tories as taking her party’s lead on measures to support hard-pressed households.
And she accused the SNP of changing position on taxing oil and gas giants on enormous profits.
The SNP have previously made arguments against a windfall tax on energy firm, citing concerns the move could hammer the oil sector which is fundamental to the economy of Scotland’s north east and refused to back Labour motions in Holyrood and Westminster to call for a tax.
But in March, the party changed position on the policy, with SNP energy spokesperson Stephen Flynn calling for a “broad-based” windfall tax on all major companies that made “excessive” profits.
Reeves broadly welcomed the Chancellor’s announcement on Thursday, but added that the Government’s “dither and delay has cost our country dearly”.
She said: “On this side of the House, we welcome the fact that the Government is finally acting on our calls to introduce a windfall tax. And it is good to see the SNP U-turning today, too, and saying they are also in favour of a windfall tax on oil and gas profits. Well done to the SNP.”
Kirsty Blackman, the SNP’s work and pensions spokesperson, did not address the jibe and accused the Government of not going far enough with the £15bn package of measures.
She said Sunak had “just suddenly realised people are struggling with cost of living” in the same week the damning Sue Gray report was released.
Blackman noted the measures failed to increase benefits and highlighted the short-term measures to tackle soaring energy bills would not last next year, though increased utilities costs would.
Gavin Newlands, the SNP’s transport spokesperson, hit back at the Chancellor’s excuse that food bills were rising across the world and were not a result of Brexit.
He said: “This statement today may have put out the fires on the backbenches behind him, or some of them but it doesn’t provide the support and plan these islands require.
“In a 22-minute statement which began with an explanation of the rate of inflation, he presumably forgot to mention Brexit, which has directly caused a 6% increase in food prices, relative to international prices.”
Blackman called for a windfall tax to target other companies making excess profits, noting energy firms were "disproportionately" based in Scotland.
Sunak “could not bring himself” to use the words “windfall tax”, according to Reeves but announced what he called an “energy profits levy” which he said would raise around £5bn – 25% tax on extraordinary profits.
But oil and gas firms will also receive a new investment allowance, which the Chancellor said would see firms save 91p for every £1 companies invest in the country, in a sop to Thatcherite Tory hardliners.
He also said that the £200 loan every household was to receive for energy bills would be doubled and will now be a grant.
More than 8m of the lowest income households will receive a £650 one-off payment. It will apply to households on Universal Credit, Tax Credits, Pension Credit and legacy benefits.
Separate one-off payments of £300 will go to pensioners and £150 for those receiving disability benefits.
Businesses in Aberdeen, where the oil industry employs thousands, have reacted furiously to the announcement of the windfall tax, saying “we’ve shot ourselves in the foot”.
Ryan Crighton, Policy Director at Aberdeen & Grampian Chamber of Commerce, said: “In the short-term, taking an additional £5bn from a sector already taxed at 40% will achieve very little apart from making the North Sea – already one of the world’s most mature basins – less attractive to investors.
“Tax and fiscal stability, above all else, really matter in a globally competitive investment market, and today we’ve shot ourselves in the foot.
“It needlessly puts obstacles in our path to net zero and will increase our reliance on imported energy, which comes at a greater environmental and financial cost.”
