The UK's Energy Profits Levy (EPL), a windfall tax on oil and gas profits introduced in 2022, is facing mounting political pressure for early repeal. A group of eight former energy ministers from Conservative, Labour, and Scottish governments has publicly urged Prime Minister Keir Starmer to scrap the levy immediately.

Industry and Political Pressure for Change

The former ministers argue that the EPL, extended by the current Labour government to 2030, is damaging North Sea production. They contend that policy decisions, not geology, are prematurely curtailing domestic output, jeopardizing jobs, energy security, and industrial activity. They warn that waiting until 2030 to replace the EPL is too long and that without urgent fiscal and regulatory reform, the UK will face increased imports, loss of industrial capacity, job losses, and the offshoring of emissions.

Proposed Policy Actions

The letter calls for a three-pronged approach: scrapping the EPL, approving the major Rosebank and Jackdaw field developments to restore industry confidence, and rolling back licensing restrictions. The ministers link domestic production to improved national security, arguing that rising LNG imports expose the UK to geopolitical risk and do little to reduce global carbon emissions.

Current Status and Potential Timeline

While the levy is currently slated to end in 2030—to be replaced by a price shock mechanism for periods of high prices—the UK Treasury has recently held discussions with North Sea operators about potentially rolling it back earlier. Industry sources suggest a repeal could occur as early as 2027. These calls for change coincide with energy becoming a focal point ahead of the Scottish Parliament elections.