The UK Government has been accused of “bowing to pressure from oil and gas giants” by announcing that it will remove the windfall tax should the price of the commodities continue to fall.

Tory ministers said they would slash the current 75% tax on North Sea oil and gas profits back to its regular 40% if prices reach certain levels.

The announcement drew criticism from opposition parties, unions and poverty and environmental campaigners, with the change branded “premature” and “one of Rishi Sunak’s biggest personal failures as chancellor and Prime Minister”.

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The Scottish Greens said the announcement “stinks to high heaven” and questioned whether the Government had struck "backroom deals" with energy giants. 

Meanwhile, Scottish Tory MPs, including Douglas Ross, welcomed the announcement on Friday morning.

The UK Government said the windfall tax, first announced a year ago, will remain in place until 2028 as previously planned unless oil and gas prices fall to the levels needed for it to be revoked.

Downing Street said the change was being made to “protect domestic energy supply and safeguard thousands of jobs reliant on that sector”.

“Industry has warned that companies are cutting back on investment,” the UK Government said.

“This puts the long-term future of the UK’s domestic supply at risk, meaning we would be forced to import more from abroad at a time when reliable and affordable energy is a focus for families and businesses.”

But a union chief said ministers “should not bow to pressure from oil and gas giants”.

“This would be a gift to energy giants who have enjoyed a record-breaking cash bonanza, while families across Britain have struggled to heat their homes,” Paul Nowak, TUC general secretary, said.

“Oil and gas companies have been allowed to get away with treating the British public like cash machines.”

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Nowak criticised the UK Government for considering “scaling back this already-moderate windfall tax” after already leaving “billions on the table by refusing to impose a proper windfall tax”.

Mark Ruskell MSP, the Scottish Greens' environment spokesperson, said the decision was “unbelievable” and “environmentally devastating”.

“What are they thinking? It stinks to high heaven of yet more very questionable backroom deals being struck with profit-heavy business and the Tory government, and to hell with the consequences for our planet,” Ruskell (pictured below) said.

“If anything we should be hitting these shareholder-driven corporations with higher taxation to redress the environmental destruction they have wrought on our environment for decades without political challenge from Tory or Labour governments.”

The National: Mark Ruskell speaking in Holyrood.

Ruskell said the decision was the “exact opposite of climate leadership” and said the Tories cannot be trusted to protect the environment.

“To announce this during a cost of living crisis created by their economic failures, and on the very day major banks and building societies are pulling mortgages because of soaring interest rates created by those actions, shows utter contempt for ordinary people,” he added.

“It seems not a day now goes by without the polluters’ party coming up with yet another way to screw over our environment. We can only hope that the next generation of voters will be ready to mobilise against them to make the UK a Tory-free zone.”

Freya Aitchison, Friends of the Earth (FoE) Scotland oil and gas campaigner, said that fossil fuel girls should be “paying the full price” for the harm their products cause.

“These firms have made obscene profits in the last few years and the UK Government is yet again making their lives easier by slashing the windfall tax,” she said.

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“The windfall tax is already compromised by a massive loophole that gives a 91% tax break to companies investing in new fossil fuel developments.

“The tax needs to be strengthened, not weakened, yet the UK Government is once again prioritising the interests of greedy fossil fuel companies over the interests of people and the planet.

LibDem leader Ed Davey said: “This out-of-touch Government has shown yet again that it doesn’t care about people struggling just to get by, or the small businesses clinging on.

“This energy tax failure ranks as one of Rishi Sunak’s biggest personal failures as chancellor and Prime Minister.”

Simon Francis, the co-ordinator of the End Fuel Poverty Coalition, said the idea was “premature”.

“Energy bills are predicted to remain high and levels of household energy debt are still surging,” he said.

Meanwhile, West Aberdeenshire and Kincardine MP Andrew Bowie said on social media that he was “delighted” by the announcement and claimed it showed the Tories “standing up for Scottish jobs”.

Bowie wrote: “I have spoken to so many in the industry and around the North East of Scotland who have been calling for this, and I and other Scottish Conservatives have now successfully made this case.

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“Unlike the SNP and Labour who would abandon the North East and our workers.”

Scottish Tory leader Ross added: “It’s great to see the UK Government listening to the North Sea oil and gas sector and taking action to secure 90,000 Scottish jobs.

“While Labour’s position is led by Just Stop Oil, only the Conservatives are standing up for the North East.”