Will the tax burden finally start falling?

Is the government ready to start cutting taxes? After taking the burden to a post-war high, it seems ministers are preparing to change direction – in one area, anyway. This morning Jeremy Hunt announced that the energy levy on oil and gas companies, known as the ‘windfall tax’, will come to an end in 2028 – a direct response to growing fears that the effective 75 per cent tax on profits was driving business and investment out of the country.

Divestment from the North Sea has become a heavily contested topic. Keir Starmer announced that Labour would ban all new production in the North Sea, perhaps putting into perspective for the Tories just how far their windfall tax has shifted what is politically possible. There’s been plenty of evidence of businesses getting cold feet too: the largest energy producer in the North Sea, Harbour, has been shedding hundreds of jobs, after the company claimed its tax bill, which includes the levy, ‘all but wiped out’ profits last year.