Red-faced Tory leader Douglas Ross hung out to dry as windfall tax extension announced

Scottish Tory leader Douglas Ross has been left humiliated by Tory Chancellor Jeremy Hunt’s budget vow to extend the controversial windfall tax on energy profits.

Cutting the levy had been a central demand of the Scottish Tories to help in the key north-east election battleground and a dividing line between Labour and the SNP.

But their pleas to halt the levy fell on deaf ears.

Delivering his budget in the Commons on Wednesday afternoon, Mr Hunt confirmed he will extend it by a year to 2029, raising £1.5 billion.

Stunned Scottish Tory insiders admitted there is “huge anger” within the party over what was clearly a clash behind closed doors.

Mr Ross, the MP for Moray, warned Prime Minister Rishi Sunak it would hammer the Tory vote north of the border.

‘I fought against it’

Mr Ross told the P&J the chancellor has made the “wrong decision” to extend the levy.

He said: “I fought against it as hard as I could.

“I’m disappointed that the decision has been taken to extend it by a year.

“My main priority here was to support oil and gas.

Oil and gas has become an election wedge issue. Image: Shutterstock.

“The Conservatives are still the most pro-sector and workers of all the parties in Scotland.”

But an SNP source claimed the Tories are “finished in the north-east of Scotland”.

“They can’t seriously go into the next general election threatening to destroy 100,000 Scottish jobs,” they added.

First Minister Humza Yousaf opposes Labour’s plans to increase the windfall tax and extend it an extra year.

It was introduced as a response to soaring profits in May 2022.

Mr Hunt said the government will legislate for a mechanism to abolish the levy should market prices fall to their “historic norm” for a sustained period of time.

He added: “But because the increase in energy prices caused by the Ukraine war is expected to last longer so to will the sector’s windfall profits so I will extent the sunset on the energy profits levy for an additional year to 2029, raising £1.5 billion”.

‘Heated’ discussion with PM

Mr Ross approached Mr Sunak during a pre-budget event at parliament on Monday night.

After a “heated” discussion between the pair, it’s understood he sought out Chancellor Jeremy Hunt to make a last-ditch plea to drop the measure.

But he would not change course.

The party argues that extending the windfall tax by an extra year allows the government to deliver a National Insurance cut for millions of workers across the UK.

SNP Westminster leader Stephen Flynn got his jibe in early while Mr Sunak was dealing with prime minister’s questions before the budget.

He told the prime minister he risks turning his Conservative colleagues in Scotland into nationalists by “taxing Scotland’s natural resources in order to pay for a tax cut in England”.

Prime Minister Rishi Sunak with Scottish Conservative leader Douglas Ross during the Scottish Conservative party conference at P&J Live on Saturday. Image: PA.

The announcement was unwelcome news to Tories north of the border, including north-east MP and nuclear minister Andrew Bowie.

At the weekend, he had even suggested the UK Government was considering reducing the levy or scrapping it completely.

He told the P&J: “I take the view, the department takes the view, the government takes the view, that the energy profits levy is there but we’re not saying it’s going to be remaining as it is forever.”

Mr Bowie, who publicly opposed the windfall tax before becoming a minister, added that the chancellor is currently reviewing it and “looking at the level at which we might be able to reduce or get rid”.

Meanwhile, Douglas Lumsden, Scottish Tory energy spokesman, said north-east MSPs are “not happy” about the decision.

Despite his “disappointment”, he claimed the party remains the “only party backing the oil and gas industry”, pointing to its support of new oil and gas licences.

The North East MSP added: “I can understand this will be disappointing for so many.

“Our MPs will be working hard to have it amended.”

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