Energy Profits Levy: Letter to the UK Government

To: Rt Hon Ed Miliband MP, Secretary of State for Energy Security and Net Zero and Rt Hon Rachel Reeves MP, Chancellor of the Exchequer

25 February 2026

Dear Ed, Rachel,

I am writing once again to set out the Scottish Government’s call for an immediate end to the Energy Profits Levy (EPL), as its retention is placing a just energy transition at risk and is damaging Scotland’s economy.

Prior to the UK Autumn Budget, there were clear warnings from across the energy industry on the necessity of making the transition from the EPL to a fairer and more stable regime as soon as possible. These warnings were not heeded. The consequences are being felt for business confidence, jobs and investment across Scotland’s energy sector. These impacts are already being seen, and I fear that they will continue in the weeks and months to come.

The First Minister raised these matters with the Prime Minister on 5 December and again on 16 February. The First Minister was clear that the UK Government must act now or run the risk of delivering irreversible deindustrialisation and decline in Scotland’s economy.

Your letter received earlier today (in response to the First Minister’s letter of 19 December) acknowledges that the EPL “was always intended as a temporary measure”, whilst also restating that “it will end by 2030”. It also restates plans for the Oil and Gas Price Mechanism (OGPM) as a long-term successor regime.

These responses provide very little assurance. The EPL has already been in place for too long, action is required now.

The Scottish Government has already noted the high-level design of the OGPM as a future fiscal regime and the intention to legislate for this, but there is very little value in setting out the principles of an improved regime if these are not going to be implemented until 2030. 

The impacts of the EPL on jobs and investment are already happening and these are being felt acutely in the North East of Scotland.

We now face a situation that UK Government decisions are driving an accelerated decline in North Sea oil and gas and opening up a gap with the renewables industry. This is a gap into which jobs and livelihoods are being lost. We also have the longstanding concern that the UK Government is failing to treat the offshore energy sector, located primarily in the North East of Scotland, fairly in terms of taxation alongside other parts of the UK economy.

I would implore you to ensure that the UK Government’s Spring Statement next week announces the immediate removal of the EPL. This would send a strong and positive signal to the wider energy industry, as well as to communities and workforces here in Scotland. 

These fiscal changes must also form part of any wider plan for a just transition from oil and gas to renewables, one which protects jobs and skills and delivers a pipeline of future investment.

Yours sincerely,

Gillian Martin