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The government will end the windfall tax on bumper oil and gas profits in 2028, if prices drop.

The move is in response to fossil fuel companies warning they are cutting back on investment.

The windfall tax – 75% of North Sea oil and gas production profits – will continue for the next five years but the government has announced that if prices fall to historically normal levels for six months the tax rate for oil and gas companies will return to 40%.

Prices had reached historic highs following the invasion of Ukraine, resulting in record profits for oil and gas producers such as Shell and BP.

Companies do not pay the full 75% or 40% rate as they can offset tax liabilities on investment they make.

Though the windfall tax included an investment allowance the government said if it didn’t end when prices come down the long-term future of the UK’s domestic oil and gas supply is at risk, as the country would import more from abroad.

The windfall tax, known as the energy profits levy, has raised around £2.8bn to date, the government added, and is expected to raise almost £26bn by March 2028.

Funds raised have been used to support household energy schemes such as the energy price guarantee, which limits typical domestic energy bills until the end of June.

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No new oil and gas projects can be developed if the world is to stay within safe levels of climate change, the International Energy Agency said more than two years ago.

But the Treasury said it would be “irresponsible to turn off the North Sea taps overnight”.

“Without oil and gas from British waters, we would be forced to import even more from overseas, putting our security of supply at risk,” Gareth Davies, exchequer secretary to the Treasury, said.

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The tax will end when prices fall to $71.40 per barrel of oil and 54p per therm of gas for six months. At present a barrel of brent crude oil is trading around $75 a therm of gas is roughly 60p.

Supporting new oil and gas projects in the North Sea has been politically contentious in recent weeks. Labour has come under pressure from the GMB union and the prime minister over its policy to ban new fossil fuel projects in the waters off the UK.

Labour leader Keir Starmer said he would work with unions to “seize the opportunities” of green energy to prevent mass job losses and avoid mistakes of the 1980s which decimated coal communities.

Today’s announcement has been welcomed by industry and politicians but not campaigners.

Offshore Energies UK, formerly Oil and Gas UK, but the group said more needed to be done and details of the government plan need to be understood.

“Enabling continued UK energy production now and in future depends on a predictable and fair fiscal environment. The UK must be competitive if we are to be successful in the global race for energy investment,” a spokesperson said.

“We provide over 200,000 good, skilled jobs across the length and breadth of the UK.”

Labour cautiously welcomed the policy end but said there were problems with loopholes in the how the tax currently operates with much of the money not being collected.

It’s “right there is a strategy for bringing those taxes to an end when the time is right, because it should only be on the basis of un-forecast profits”, said Labour’s shadow immigration minister Stephen Kinnock.

NGO Global Witness said the policy announcement was obscene. It show government “has learned nothing from the energy crisis and is intent on returning to business as usual as quickly as possible”.

“That means doing nothing to reduce our dependence on oil and gas, doing nothing to provide price security for consumers, and doing nothing to rein in climate breakdown. The fossil fuel industry has used its enormous influence and power to fight the windfall tax, and it is an affront to humanity that it appears to have won,” a spokesperson said.

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‘Stability in Middle East is priority,’ says Starmer – as world reacts to strikes

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'Stability in Middle East is priority,' says Starmer - as world reacts to strikes

Sir Keir Starmer has said stability in the Middle East is “a priority” following US strikes on Iran’s nuclear facilities, as the world has reacted to the attack.

The prime minister also called on Iran to “return to the negotiating table” to “reach a diplomatic solution to end this crisis”.

Follow latest: Iran considering ‘all options’ after US strikes

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US strikes on Iran explained

In a statement, Sir Keir said: “Iran’s nuclear programme is a grave threat to international security.

“Iran can never be allowed to develop a nuclear weapon, and the US has taken action to alleviate that threat.

“The situation in the Middle East remains volatile and stability in the region is a priority.

“We call on Iran to return to the negotiating table and reach a diplomatic solution to end this crisis.”

The UK was not involved in the strikes but was informed about them in advance by the US, Business Minister Jonathan Reynolds told Sky News’ Sunday Morning with Trevor Phillips.

Sir Keir and Foreign Secretary David Lammy had been pushing for a diplomatic solution. On Thursday, the prime minister warned of a “real risk of escalation” in the conflict.

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Trump: Iran strikes ‘spectacular success’

The US struck three sites in Iran early on Sunday morning, with Donald Trump boasting the country’s key nuclear sites were “completely and fully obliterated” in an address to the nation from the White House and warned there could be further strikes if Iran retaliates.

Read more:
What we know so far about US strikes
What happens next is largely in Iran’s control

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‘Trump’s bold decision will change history’

Netanyahu praises Trump

Israel‘s Prime Minister Benjamin Netanyahu praised Mr Trump for the strikes, saying: “Your bold decision to target Iran’s nuclear facilities with the awesome and righteous might of the United States will change history…

“History will record that President Trump acted to deny the world’s most dangerous regime the world’s most dangerous weapons.”

UN secretary-general ‘gravely alarmed’ by US attack

But UN secretary general Antonio Guterres said he was “gravely alarmed by the use of force” by the US against Iran.

“This is a dangerous escalation in a region already on the edge – and a direct threat to international peace and security. There is a growing risk that this conflict could rapidly get out of control – with catastrophic consequences for civilians, the region, and the world.”

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European Union foreign policy chief Kaja Kallas urged all sides to step back and return to the negotiating table. “Iran must not be allowed to develop a nuclear weapon,” she said in a post on X.

“I urge all sides to step back, return to the negotiating table and prevent further escalation,” she said, adding that EU foreign ministers will discuss the situation tomorrow.

Cuba's President Miguel Diaz-Canel. Pic: Reuters
Image:
Cuba’s President Miguel Diaz-Canel. Pic: Reuters

How the world reacted to the strikes

Cuba’s President Miguel Diaz-Canel said on X: “We strongly condemn the US bombing of Iran’s nuclear facilities, which constitutes a dangerous escalation of the conflict in the Middle East.

“The aggression seriously violates the UN Charter and international law and plunges humanity into a crisis with irreversible consequences.”

Venezuela’s foreign minister Yvan Gil said his country’s government “condemns US military aggression” and “demands an immediate cessation of hostilities”.

In a statement, an Australian government spokesperson said Iran’s nuclear and ballistic missile programme “has been a threat to international peace and security”.

Japan's Prime Minister Shigeru Isiba. Pic: Reuters
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Japan’s Prime Minister Shigeru Isiba. Pic: Reuters

Japan’s Prime Minister Shigeru Ishiba said it is “crucial that there be a quick de-escalation of the conflict”.

Italy’s foreign minister Antonio Tajani said after the attack that his country’s government hopes “a de-escalation can begin and Iran can sit down at the negotiating table”.

The US attack came after more than a week of strikes by Israel, which have significantly degraded Iran’s air defences and offensive missile capabilities, and damaged its nuclear enrichment facilities.

Israel’s strikes on Iran have killed at least 865 people and wounded 3,396 others, according to the Washington-based group Human Rights Activists. The group said of those killed, 365 were civilians and 215 were security force personnel.

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UK

Latest polling says if an election was held tomorrow Reform UK would win a majority

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Latest polling says if an election was held tomorrow Reform UK would win a majority

Since the local elections Reform UK has had no shortage of good polls.

But a new one suggests Nigel Farage‘s party has a chance not only of winning the next election, but of claiming a decent Commons majority, too.

In February, Reform topped a Sky News/YouGov poll for the first time, with Nigel Farage’s party edging in front on 25%, Labour pushed into second on 24%, with the Tories on 21%.

But a fresh one from Ipsos puts Reform on 34%, nine points ahead of Labour on 25%, with the Conservatives a distant third on 15%.

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Zia Yusuf: I sent a tweet I regretted

While the other parties are flatlining, Reform appears to be pushing boundaries.

Were these figures to be replicated across the country at a general election, with every constituency behaving the same way, then Reform could win as many as 340 seats, giving it a majority of 30, Sky News analysis suggests.

Labour could be reduced to 176 seats, down 236 on last year’s election, while the Tories would hit a record low of 12 seats.

But polling should always be taken with a pinch of salt and with the firm acknowledgement that there is not an election coming any time soon.

Conservative backbenchers might also tell you publicly that opinion polls are notoriously difficult to translate into seat numbers because voting percentages in individual constituencies can vary hugely from the overall average.

But the truth is that the symbolism of Reform UK topping another poll is likely to be noticed by MPs from all parties, especially backbench Conservatives who have actively been hoping their leader, Kemi Badenoch, can help them climb the polls and bring the party back into public favour.

Politics is a brutal game and when it comes to toppling underwhelming party leaders, the Tories are more ruthless than most. One wonders how many of these polls Mrs Badenoch’s party will allow her to endure.

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Reeves takes aim at Reform UK

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This poll is also a warning to Labour.

As the party approaches a year since its major victory, it will not have much to celebrate if these numbers are anything to go by.

According to this survey, only 19% are satisfied with the job Sir Keir Starmer is doing as prime minister, with 73% dissatisfied.

And the figure of 25% of voters intending to vote Labour is a level not seen since October 2019.

While abstract to much of the public, polling can often shape not only the chatter inside Westminster but how and when plots by MPs begin.

For Reform UK, this is a much-needed morale boost after a surprise resignation by their former Chairman Zia Yusuf, and then an almost immediate U-turn back into the party.

And Kemi Badenoch – who said during her leadership campaign that the Conservatives needed to go back to first principles and that this would take time – will be wondering, seven-and-a-half months after winning the leadership, how much time she really has left.

Ipsos interviewed a representative probability sample of 1,180 British adults aged 18+, via the Ipsos UK KnowledgePanel. Data was collected between 30 May-4 June 2025.

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Palestine Action: The ‘enemy within’ or non-violent protesters?

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Palestine Action: The 'enemy within' or non-violent protesters?

The impending ban on protest group Palestine Action has divided opinion – described as both “outrageous” and “long overdue”.

Home Secretary Yvette Cooper is expected to take the step after the group broke into RAF Brize Norton in Oxfordshire on e-scooters and sprayed two Voyager planes with red paint.

The prime minister described the attack as “outrageous” and a rapid review of security at MoD bases is under way.

It was the latest protest in a five-year campaign from Palestine Action (PA) that has targeted arms manufacturers, financial institutions, political figures and government buildings.

Red spray paint has become its signature.

Damage to planes at Brize Norton
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Damage to planes at Brize Norton

Damage to planes at Brize Norton

On its website, PA says it is a “direct action movement” committed to ending “global participation” in what it calls Israel’s “genocidal and apartheid regime”.

It adds that it uses “disruptive tactics” to target “corporate enablers of the Israeli military-industrial complex”.

Banning the group would make membership of it illegal. It would be treated as a terrorist organisation.

Saeed Taji Farouky, a spokesman for PA, told Sky News that potential proscription was “unfair”, adding that it was “ludicrous” that a “civil society direct action group” could end up on the same list as ISIS.

He added: “It’s not logical, it’s not even consistent with the British legal definition of terrorism, it’s a reaction that’s been taken overnight, with almost no discussion or debate.

“The whole thing is incredibly worrying, mostly for what it means about British law in general, about undermining the very basis of British democracy and the rule of law.”

There are “no circumstances” under which the two people who breached Brize Norton would be handed over to the police, he said.

Singer-songwriter Paloma Faith, who spoke at a pro-Palestine rally in Whitehall in central London on Saturday, told Sky News she was “devastated” by the move.

Paloma Faith spoke at the pro-Palestine rally
Image:
Paloma Faith spoke at the pro-Palestine rally

“I have met some of the people who have friends in that group. They are young students and they are basically trying to do something because they feel that our government is failing them.”

She added that “everyone” wants to end what she described as a “massacre” in Gaza.

Israel says its military campaign in Gaza is a way of defending itself against Hamas, which killed more than a thousand people in its 7 October attacks and took about 240 people hostage. Hamas-run health authorities claim Israeli attacks have since killed almost 56,000 people in Gaza.

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What’s happening to Palestine Action?

Faith continued: “When you scribble on something, or paint on it, it’s a non-violent protest and it shouldn’t be made at the same level as a violent protest – it is unjust.”

Ben Jamal, director of the Palestine Solidarity Campaign, backed Palestine Action’s use of non-violent protest.

A bank damaged by Palestine Action
Image:
A bank damaged by Palestine Action

He told Sky News: “There has been a place for that in all political movements in history.

“In the struggle for the rights of black people in the US, in the struggle against apartheid in South Africa, in the struggle for women to have the vote, people took forms of non-violent direct action.

“Imagine if we had the current [situation] back in those days – we would have been proscribing the suffragettes, treating them as terrorists.”

There was a pro-Israeli counter-protest
Image:
There was a pro-Israeli counter-protest in London

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Others have welcomed the move. Lord Walney, who served as the government’s independent adviser on political violence, told Sky News the decision was “long overdue”.

“Palestine Action have acted as the enemy within which is why it’s right, now, to crack down on them,” he said.

“They have terrorised working people for a number of years and there’s a number of serious violent charges that are going through the court system at the moment.”

The UK government is expected to announce its decision early next week.

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