JEREMY Hunt has provoked anger from Scottish Tories by confirming he will extend the windfall tax on oil and gas companies – to fund a new cut in National Insurance.

Unveiling the Spring Budget on Wednesday afternoon, the Chancellor confirmed National Insurance would be cut by 2%, a tax reduction that will apply across the United Kingdom.

It will be funded by additional taxes on vapes and tobacco. But controversially, it will also be funded by maintaining until 2029 the windfall tax on North Sea oil and gas companies which have posted bumper profits because of the war in Ukraine.

READ MORE: Douglas Ross 'threatens to quit as Scottish Tory leader' amid Budget row

Scottish Tory leader Douglas Ross reportedly became embroiled in a heated row with both Hunt and the Prime Minister about the policy.

Speaking in the Commons, Hunt said the Government would abolish the Energy Profits Levy “should market prices fall to their historic norm for a sustained period of time”.

But he added: “Because the increase in energy prices caused by the Ukraine war is expected to last longer, so too will the sector’s windfall profits. So I will extend the sunset on the Energy Profits Levy for an additional year to 2029 raising £1.5 billion.”

Scottish Tory MPs are up in arms over the proposals, Ross vowing to vote against the measure.

The Scottish Tory leader said: “I’m deeply disappointed by his decision to extend the windfall tax for a further year.

“The SNP and Labour have abandoned 100,000 Scottish workers by calling for the taps in the North Sea to be turned off now.

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“Although the UK Government rightly oppose this reckless policy – and have granted new licences for continued production in the North Sea – the budget announcement is a step in the wrong direction.

“As such, I will not vote for the separate legislation needed to pass the windfall tax extension and will continue to urge the Chancellor to reconsider.”

Energy minister Andrew Bowie, also the MP for West Aberdeenshire and Kircardine, said the decision was “deeply disappointing”.

Elsewhere in the Budget, the Chancellor announced that he would reform the controversial non-dom tax regime, of which Rishi Sunak’s wife Akshata Murty (below) was until recently a beneficiary.

Claiming non-domiciled status allows wealthy people who live in Britain to say they are not fully settled in the country to avoid paying UK taxes on their income earned abroad.

The National:

In practice, this means people save money by electing as their primary domicile a lower-tax country to which they have ties.

Hunt said he would “replace the non-dom regime with a modern, simpler and fairer residency-based system”.

He added: “From April 2025, new arrivals to the UK will not be required to pay any tax on foreign income and gains for their first four years of UK residency, a more generous regime than at present and one of the most attractive offers in Europe.

“But after four years, those who continue to live in the UK will pay the same tax as other UK residents.”

He said that those who currently benefited from the non-dom regime would be given “transitional arrangements”, including a two-year period during which people will be “encouraged to bring wealth earned overseas to the UK where it can be spent and invested here”.

This will attract an extra £1bn in tax, he said.

Paul Johnson, the director of the Institute for Fiscal Studies, praised the Chancellor for “removing outdated concept of ‘domicile’” and replacing it with a “residence based system”.

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He added: “Good. Lots of detail to see here.”

Duties on alcohol will remain frozen at their current rate, dodging a 3% rise, until February 2025, Hunt said, and the 5p cut in fuel duty will remain in place and the tax frozen for a further 12 months.

Hunt also unveiled measures to tackle the “unfairness” of the child benefit regime.

At present, the payment is withdrawn if one parent earns more than £50,000 a year.

“That means two parents earning £49,000 a year receive the benefit in full but a household earning a lot less than that does not if just one parent earns over £50,000,” he said.

“Today I set out plans to end that unfairness."

He said the Government would consult on moving the high-income child benefit charge to a household-based system by April 2026.

“But because that is not a quick fix, I make two changes today to make the current system fairer,” he added.

“I confirm that from this April the high-income child benefit charge threshold will be raised from £50,000 to £60,000. We will raise the top of the taper at which it is withdrawn to £80,000.

“That means no one earning under £60,000 will pay the charge, taking 170,000 families out of paying it altogether. And because of the higher taper and threshold, nearly half a million families with children will save an average of around £1,300 next year.”

Hunt has come under fire from the Scottish Government, which described the Budget as a "betrayal" of public services. 

Finance Secretary Shona Robison said: "Public services up and down the UK are in real need of investment, and they’re being sacrificed to deliver unsustainable tax cuts.”

Labour leader Keir Starmer claimed the Tories had "maxed out" Britain's "credit card" and hit out at Sunak for presiding over taxes at a "70-year high".

SNP economy spokesperson Drew Hendry said: "Scotland's budget has already been slashed by the UK government – and now they are cutting public services to the bone.”

The LibDems's Scottish affairs spokesperson Christine Jardine accused the Government of introducing "stealth taxes" rendering the National Insurance cut "meaningless".