Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he has made an estimate of the potential fiscal impact of the energy security investment mechanism in each financial year from 2023-24 to the end of 2027-28 in comparison with the latest published forecast by the Office for Budget Responsibility.

The Energy Security Investment Mechanism will permanently disapply the Energy Profits Levy if oil and gas prices fall to historically normal levels for a sustained period before the levy’s March 2028 sunset date.

The Energy Security Investment Mechanism uses 20-year historic averages to the end of 2022 so that it is set at $71.40 per barrel of oil and £0.54 per therm of gas. Government will require average prices to meet or fall below the level of both price thresholds for two successive quarters before disapplying the EPL and will set out further details on how this will work in due course. Based on the latest independent Office for Budget Responsibility’s forecast, the mechanism will not be triggered before the tax’s planned end date in March 2028.