A UK minster has told MSPs that a windfall tax on oil and gas profits would likely raise energy prices further as he was warned a lack of action was “killing off people”.
UK Energy Minister Greg Hands told Holyrood’s Net Zero, Energy and Transport Committee that a windfall tax on fossil fuels companies’ record-breaking profits to mitigate the cost-of-living crisis “would likely kill of investment” in the North Sea industry.
But Mr Hands failed to outline any further measures the UK Government will bring forward ahead of the next energy price cap review in October, instead claiming that “fuel poverty is devolved”.
Nicola Sturgeon has warned that there was "nothing in the Queen's speech" to help people tackle the cost-of-living crisis.
She added: "We need to see action. What steps (that) have been taken so far are not enough - they fall way short of what is needed.
READ MORE: Queen's speech: Government criticised over 'missed opportunity' to tackle cost of living
"People are struggling right now to feed their children, to heat their homes and we know it's going to get worse.
"We're seeing other governments across Europe take much more action. Let us see the action."
Speaking at the committee, Labour MSP Monica Lennon highlighted comments made by fuel poverty charities that “unless the UK Government and the Scottish Government take more action there will be a catastrophic loss of life this winter”.
She told Mr Hands that the UK Government’s Queen’s speech, delivered in the Houses of Parliament yesterday was “underwhelming to say the least” at bringing forward measures to tackle the crisis.
Ms Lennon pointed to “no windfall tax on the unique profits of big companies” and “no suspension of VAT on the energy bills of ordinary people” being included in the Conservative Government’s programme.
She added: “What are your worst fears about this winter?”
Mr Hands pointed to a previous funding package outlined by the Treasury and said the Queen’s Speech “is building on action that we have already taken”.
He said that “not all those measures have actually come into effect yet”, stressing some action will not kick in until the autumn.
READ MORE: Michael Gove rules out emergency budget to address cost of living crisis
He added: “We will continue to monitor the situation very closely.
“It’s too early to tell what the price cap will look like from October, but I think that will be a key consideration.”
Pointing to the plans for a windfall tax, Mr Hands said that oil and gas companies “already pay corporation tax at twice the rate of other companies”.
He added: “The windfall tax would be likely to kill off investment, cost jobs, particularly in Scotland.”
But in response, Ms Lennon told Mr Hands that the committee has heard from charities, trade unions and food bank volunteers that “the cost-of-living crisis is killing off people”.
She added: “With respect, we need to hear more from both your government and the Scottish Government on what will be done.
“We are dealing with a cost-of-living crisis and a climate crisis and it seems like we have a business as usual approach.”
Mr Hands suggested that any windfall tax on oil and gas companies would “very likely” lead to increased energy costs for the public.
READ MORE: Queen's speech: How it affects Scotland
He added: “Anything that prevents or reduces investment in either the energies of today, particularly gas coming out of the North Sea or renewables today or in the future is likely to have an impact on both prices and emissions.”
Greens MSP Mark Ruskell warned that without more action, when the further price cap rise comes into effect in the autumn, there will not be “enough to support those people who are going to be in spiralling debt and going to be faced with even greater levels of fuel poverty”.
Mr Hands refused the chance to outline any further measures to mitigate the expected further rises in energy costs, instead claiming “fuel poverty is devolved”.
Addressing Mr Ruskell, he added: “So I’m assuming you’ll be making the same point – I think your party if I’m not mistaken is now in government – so I assume you will make that some point to your Scottish Green ministers as well.”
He said: “I’m not denying that consumers are facing difficult times at the moment and that is why we are keeping this constantly under review.
“We are not introducing any emergency budget.”
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