'Punitive' tax rates will discourage oil and gas companies from investing in the UK says south Dorset MP Richard Drax.

The MP's comments came as MPs rejected Labour’s bid to block the Offshore Petroleum Licensing Bill.

The Bill cleared its first Commons hurdle after MPs gave it a second reading, and passed it by 293 votes to 211, a majority of 82.

It will undergo further scrutiny at a later date.

Speaking in the Commons, Mr Drax said: “As I understand it, these companies will face a corporation tax of 50% and a windfall levy of 35%, I’d be very grateful if when he sums up at the end of all this, whether that’s true.

“Now I’m not an expert in industry, but I would think that chief executives and board members and shareholders will wince if having been told we’re going to do all this, they were going to pay all this punitive taxation, they might say ‘why on earth should we do this in the first place?'”

The MP for south Dorset added: “If we’re going to do this for all the common sense reasons the minister and the government thinks we should, why on earth are we raising taxes to such a point that it’s good going to discourage and disincentivise all those who need to spend hundreds of millions of pounds or more to get this oil and gas out of the ground.”

Mr Drax continued: “This Bill has a lot going for it, not least a most welcome return to our old and absent friend, common sense.

“Can I urge the government to find pragmatic solutions to the transition to net zero and allow the private sector to do what it does best, provide jobs and prosperity?”