The UK Government believes a windfall tax on energy companies would kill off investment and cost jobs, energy minister Greg Hands has said.
He also said the Scottish Government’s opposition to new nuclear power stations is preventing it from being part of a “renaissance” of the sector.
Addressing Holyrood’s Net Zero Committee on Wednesday, one MSP responded to his comments on a windfall tax by saying the cost-of-living crisis is “killing off people”.
Conservative minister Mr Hands said world events had driven up energy prices and the UK Government is not able to completely insulate consumers from this.
He said UK ministers are spending £22 billion this year to help households with the cost of living.
Some of this help – such as the Energy Bills Support Scheme, which will provide a £200 reduction in electricity costs – will not be felt until October, he said.
Mr Hands said: “It’s very much the belief of the Chancellor – matters of taxation are matters for the Chancellor – that a windfall tax would kill off investment.
“For example in the North Sea and particularly from companies that are also using those proceeds to invest increasingly in renewables.
“Oil and gas companies already pay corporation tax at twice the rate of other companies, they’ve paid around £375 billion in taxation to the Exchequer since North Sea oil and gas came on stream.
“So we take the view that the windfall tax would be likely to kill off investment and cost jobs, particularly in Scotland.”
Scottish Labour MSP Monica Lennon responded to him, saying: “Instead of killing off investment, just to quote your words back. What we’re hearing from charities, trade unions in Scotland, local volunteers and food banks is that the cost-of-living crisis is killing off people.”
Charities in Scotland are warning the energy crisis will lead to ‘catastrophic loss of life’ this winter unless the UK government and Scottish government do much more.
As part of our #EnergyCrisis inquiry, @SP_NetZero took evidence from UK energy minister @GregHands. 👇 pic.twitter.com/ds4zlQbGc5
— Monica Lennon MSP (@MonicaLennon7) May 11, 2022
She asked about the proposed Jackdaw oil field in the North Sea, to which the minister said an independent environmental assessment is being carried out.
Increased investment in gas will help with the UK’s security of supply, he said.
Scottish Conservative MSP Liam Kerr asked if there is a case for wholesale restructuring of the energy market.
Mr Hands said the UK Government is looking to change the UK’s energy mix, increasing the move to renewables and nuclear power.
He said: “It would be really helpful if the Scottish Government were to drop its ideological opposition to nuclear. Because nuclear has got a fantastic track record in Scotland.
“It’s a pity to see Scotland not participating – thanks to the Scottish Government’s approach to nuclear – in our nuclear renaissance.”
SNP MSP Jackie Dunbar later commented on Mr Hands’s evidence to the committee.
She said: “The minister’s appearance at committee was pathetic. It provided no reassurance to families across Scotland who are terrified to open their bills right now and having to make the unthinkable decision between heating and eating.
“This is a cost-of-living crisis created by the Tory Government and due to their continued inaction, families in Scotland are slipping further and further into poverty.
“Their failure to invest in Scotland’s renewable sector and their obsession with nuclear power compounds that.
“It also illustrates the shambolic response from the UK Tory Government as Boris Johnson tells MPs support is on the way, but that is then denied by the Treasury and Greg Hands at Holyrood.”
