Budget Resolution No. 12: Energy (oil and gas) profits levy (increase in rate)

What happened: On 6 November 2024, the House of Commons voted on Budget Resolution No. 12, which proposed increasing the Energy Profits Levy (the windfall tax on oil and gas company profits) from 35% to 38%. The motion passed by 455 votes to 125, a majority of 330.

Why it matters: The increase in the windfall tax rate forms part of the government's post-Budget legislative package, raising the headline tax rate on the profits of oil and gas producers operating in the North Sea. Combined with existing North Sea taxation, the levy brings the total tax rate on such profits to 78%. The measure is intended to raise additional public revenue during a period of elevated energy company profits, contributing to broader fiscal plans announced in the Autumn Budget 2024. The policy directly affects oil and gas companies operating on the UK Continental Shelf, with potential knock-on effects for investment decisions, employment in the energy sector, and the longer-term trajectory of North Sea production.

The politics: The vote split along largely predictable party lines. Labour, Labour and Co-operative, Liberal Democrat, Plaid Cymru, and Green MPs all voted in favour, while Conservatives, the Scottish National Party, Reform UK, and the Democratic Unionist Party voted against. A small number of independents fell on both sides. There were no notable rebels within the major parties. The SNP's opposition is notable given Scotland's particular economic exposure to North Sea oil and gas; the party argued the measure would deter investment in Scottish waters. The Conservatives and Reform UK framed their opposition around energy investment and competitiveness, placing this vote within a wider debate about the balance between taxing fossil fuel profits and maintaining conditions for domestic energy production.