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.
Aberdeen and Grampian Chamber of Commerce policy director Ryan Crighton described the move as the “fourth Tory tax raid” on the North Sea in two years.
He said the Chancellor is losing the support of industry and of his north-east-parliamentarians.
‘I fought against it’
Mr Ross told the P&J the Chancellor has made the “wrong decision” to extend the levy – and would not vote for it.
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.
“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 levy would be ditched if market prices fall to their “historic norm” for a sustained period.
He added: “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”.
‘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 the Chancellor to make a last-ditch plea.
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 asked if it was part of a bizarre plan to turn Conservatives into nationalists by “taxing Scotland’s natural resources in order to pay for a tax cut in England”.
The decision was also a blow for north-east MP and UK nuclear minister Andrew Bowie.
At the weekend, he had even told the P&J his government might consider reducing the levy or scrapping it completely.
In a social media post after the budget, Mr Bowie said the reality was “deeply disappointing”.
He added: “I will be working with him to resolve this.”
Douglas Lumsden, the Scottish Tory energy spokesman, said north-east MSPs are “not happy” about the decision.
“I can understand this will be disappointing for so many,” he said.
“Our MPs will be working hard to have it amended.”
In further bad timing for his party, Scottish Tories had scheduled a debate in Holyrood for Wednesday afternoon condemning Labour’s plan to extend the windfall tax.
“We can all agree on one thing,” said Labour MSP Daniel Johnson in Holyrood. “Douglas Lumsden desperately needs Jeremy Hunt’s phone number.”
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