EMBATTLED Chancellor Rishi Sunak is expected to host a meeting with oil and gas chiefs in Aberdeen on Thursday after announcing a raid on their profits in a last-ditch attempt to head off the cost of living crisis.
Sunak, who has been embroiled in personal scandal in recent months as well as fending off attacks for his sluggish response to spiralling costs and slow growth, will face North Sea industry leaders after announcing a windfall tax on their profits last month.
Sunak's political fortunes were sunk earlier this year when it was revealed his wife was involved in a legal tax avoidance scheme and he was fined for breaking Covid rules during lockdown.
Oil and gas firms such as BP, Shell and Harbour Energy are reported by the Financial Times to be attending the meeting have hit out at the 25% tax on their profits.
The paper reports he is attempting to “smooth” relations with the industry after flip-flopping on a windfall tax.
And he faced a frosty reception from the SNP MP for Aberdeen South, Stephen Flynn (above), who said the Chancellor “had a cheek” to position himself as a champion of North Sea energy.
“For too long his government has syphoned off profits from Scotland’s resources while failing to invest in our energy sector and Net Zero future – the reality is Scotland has the energy, it just needs the power,” said Flynn.
The emergency levy on oil and gas firms is expected to pay for a £5 billion cost-of-living support package but also features an allowance to give companies a tax incentive to invest in “projects that cut emissions”.
Sunak said: “The North Sea will be the foundation of the UK’s energy supply in the decades to come as we transition to cleaner ways to fuel our country.
“It’s vital we encourage continued investment by the oil and gas industry in the North Sea and our new investment allowance provides huge tax reliefs for projects that cut emissions.
“I look forward to hearing about the projects Scottish industry have planned as they continue to lead the charge to net-zero with new innovations and investment.”
But the Chancellor was told the Tories had “failed to deliver tangible support” for Aberdeen, despite the city having “bankrolled his government to the tune of nearly £400bn over the years”, according to Flynn.
We reported previously how the north east of Scotland, where thousands of jobs linked to the oil and gas sector, has been “short-changed” by the UK Government failing to match the Scottish Government’s investments and not replacing EU funds.
Flynn added: “His government has faced repeated calls to match the Scottish Government’s £500m Just Transition Fund, to back carbon capture in the north east and to change his investment allowances plan to encourage renewables development, yet, despite the cash he is counting in the Treasury, he sat on his hands.
“The Chancellor has the flexibility because of the taxes generated in the north east to properly invest in our net zero future and to put cash in the pockets of families who have been hit hard by his cost of living crisis – his visit to our city must be a turning point.
“We are the oil and gas capital of Europe, but if we are serious about becoming the net zero capital of Europe then we must be top of the list for investment.”
