Question to the Scotland Office:

To ask the Secretary of State for Scotland, what assessment he has made of the potential impact of (a) increases to the Energy Profits Levy and (b) the abolition of the investment allowance on north east Scotland.

The UK Government recognises that oil and gas will continue to have a role in the UK’s energy mix for decades to come and is committed to managing the energy transition in a way that supports jobs in existing and future industries. But we require the sector to contribute to the ambition to make the UK a clean energy superpower.

At Autumn Budget 2024, the government confirmed that from 1 November 2024, the Energy Profits Levy (EPL) rate would increase by 3 percentage points to 38%, the EPL investment allowance would be abolished and the EPL decarbonisation allowance rate would be adjusted to 66%. The government also confirmed an extension to the period the levy applies from 31 March 2029 until 31 March 2030. To support jobs in future and existing industries, the government decided to make no additional changes to the availability of capital allowances in the EPL.

The government has carefully considered the impact of the removal of the EPL’s investment allowance. HM Treasury publishes impacts in summary form for tax measures in tax information and impact notes (TIINs) alongside the Finance Bill. The summary of impacts from these changes to the EPL can be found here: https://www.gov.uk/government/publications/energy-profits-levy-reforms-2024