A former Conservative Energy Secretary has said the Energy Profits Levy was the “single, most stupid thing we did in 14 years of government”.

Speaking on GB News, Kwasi Kwarteng said: “I’ve got previous. I was Energy Secretary when the then Chancellor Rishi Sunak brought in the EPL, the Energy Profits Levy, which is more popularly known as a windfall tax.

“At the time, I was very much against it. I said to the Prime Minister, we shouldn’t be bringing this in, because all that it would do is it would drive off investment. The tax is something like 75%, I think it’s been extended to 78% and they’ve extended the duration for two extra years.

“So it was going to end, I think, in 2028 and now it’s been extended to 2030. So if you’re an investor, someone trying to put money into the North Sea to extract oil and precious resources, energy resources, you’re completely disincentivised from doing that.

“And I think it was a bad mistake that the Conservatives, my government, brought in.

“Now what Labour have done is they’ve just compounded an error. They’ve extended, as I say, the time which this profits levy will last, and they’ve increased the rate from 75% to 78%.

“At a time when there’s so much uncertainty, energy resources are scarce, the prices of things has been going up, it’s insanity not to try and use those resources.

“I think the government is split. I think essentially, Rachel Reeves, to be fair to her, would probably like to drill, as it were, to lower energy costs to some degree. But Ed Miliband, who is the energy secretary, the role that I had for nearly two years, he’s decided that he’s going to dig in and appease the climate lobby.

“We didn’t need [the windfall tax], it was populist nonsense and I said that to Boris. I said it directly to his face.

“Everyone hated the energy companies because they were making money. They were the ones who were exploiting the resources.

“This is absolute socialist madness, the idea that there’s a bottomless pit of money and that you can keep taxing it.

“They thought that people would keep investing in the North Sea even if they put 75 -78% tax. Of course, they wouldn’t do it. All the companies I spoke to were saying, this is completely insane. And you know where they’re going? They’re going off the shores of Guinea and God knows where else because they don’t want to be taxed 78%: they’re not idiots.

“I said this at the time, and I’ve written it subsequently: people have gone about the mini budget, they’ve gone about all sorts of things we did.

“This for me was the single, most stupid thing we did in 14 years of government, this energy profits levy, which, of course, the Socialists have extended.”