Kemi Badenoch to call for end to energy windfall tax and oil licence ban

Tory leader Kemi Badenoch is poised to advocate for the end of the windfall tax on oil and gas firms and the ban on new licences in a major speech

Initially established by the prior Conservative administration but extended upon Labour’s ascent to power, the energy profits levy was intended to finance initiatives aimed at reducing household expenses. However, the policy has faced criticism from within the industry.

Addressing the Scottish Conservative conference in Edinburgh on Friday, Ms Badenoch is anticipated to champion the oil and gas sector, accusing the UK Government of “killing” it. She is expected to assert that “renewing our party and our country means standing up for our oil and gas industry”.

She will add: “When the oil and gas windfall tax, the energy profits levy, was brought in, the oil price was near a historic high, at the exact time as energy bills for the British people were sky-rocketing.

“But there is no longer a windfall to tax. It has long gone. And the longer this regressive tax on one of our most successful industries remains, the more damaging it becomes.

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“Labour have extended and increased this tax. They are killing this industry.”

If the measure remains in place to 2030 as intended, Mrs Badenoch will say “there will be no industry left to tax”.

She will add: “So, today, I say enough. Labour must remove the energy profits levy. Labour must speed up the process of replacing it with a system that rewards success and incentivises investment.

“Because we shouldn’t have this energy profits levy at all.

“We must scrap the ban on new licences.

“We must overturn the ban on supporting oil and gas technology exports.

“And we must champion our own industry.

“We must let this great British, great Scottish industry thrive, grow and create jobs – ensuring our energy security for generations to come, driving growth and making this country richer in the process.”

Mrs Badenoch will address her first Scottish party conference as leader on Friday while her counterpart north of the border Russell Findlay will deliver his inaugural address on Saturday.

Responding to Mrs Badenoch, Simon Francis of the End Fuel Poverty Coalition said her comments were “out of touch”, adding: “Even with the windfall tax in place, the energy industry made over £115 billion in profits in 2024 alone.

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“Meanwhile, average household energy bills remain hundreds and hundreds of pounds higher than they were before the energy crisis started.

“While the Government is right to be consulting on reform of the windfall tax, maintaining a profits levy could help fund home upgrades and a social tariff which would bring down energy bills for the most vulnerable in society.”

SNP MSP Kevin Stewart said: “The Tories wrecked our economy, presided over soaring household bills and ripped Scotland from the EU against our will.

“And now they’re lurching further to the right as they haemorrhage votes to Nigel Farage.

“This weekend will be an important reminder of how Westminster has failed Scotland. Only the SNP is offering hope and a brighter future as an independent nation.”

Scottish Labour deputy leader Jackie Baillie said: “While the Tories and SNP let energy workers down by failing to plan for the future, Scottish Labour is committed to taking action towards reaching net zero, creating jobs and cutting energy bills.

“The Tories are on the side of oil and gas giants rather than working Scots, but Scottish Labour will work with the UK Government and use devolved powers to deliver a just transition for the industry.

“With Kemi Badenoch desperately attempting to rally the few remaining Scottish Tories, it seems like it won’t be long until they can fit all of their MSPs in a single taxi.”