Help for millions and a £1.3bn boost for North Sea oil in Budget for ‘comeback country’

The moves were among the stand-out features of his address yesterday, which he described as “the Budget for Britain, the comeback country”.

But he stressed that the changes could not have been implemented if Scotland had voted to go it alone in the recent referendum.

Mr Osborne’s decision to help the industry was prompted by plunging oil prices which have led to redundancies and lay-offs.

His measures included a cut in the Supplementary Tax on oil firms’ profits from 30 per cent to 20 per cent, backdated to January.

The UK Government will cut Petroleum Revenue Tax from 50 per cent to 35 per cent as well as introducing a “simple and generous” tax allowance to stimulate investment in the North Sea by investing £20million in new seismic surveys of the UK continental shelf.

The package is expected to yield more than £4billion of additional investment over the next five years and boost production by 15 per cent by the end of the decade.

In addition, Scotland-specific measures included a two per cent cut on Spirits Duty, a move which will see 16p cut from a £12.90 bottle of whisky.

Announcing the £1.3billion package, Mr Osborne reminded MPs – and voters – that it was only because of the size of the UK economy that the steps could be taken in his “Budget for Britain”.

He said: “It goes without saying that an independent Scotland would never have been able to afford such a package of support.”

Andy Samuel, Oil and Gas Authority chief executive, welcomed the tax cuts, saying: “This is an important step as we continue to work closely with industry and government to secure long-term investment in this vital sector of the UK economy.”

Leading oil tycoon Sir Ian Wood welcomed the “essential lifeline” but warned up to 10,000 jobs could still be lost.

He said: “There will undoubtedly be job losses but these should be in the 5,000 to 10,000 range out of the 380,000 current jobs and very significantly less than would have occurred under the previous fiscal regime.”

Scottish Tory leader Ruth Davidson said: “This is yet more proof that the North Sea is best served within the strength of the UK, which can deliver assistance a separate Scotland simply would not have been able to.”

The Scotch Whisky Association said the two per cent cut in excise duty on spirits was fair to consumers and a boost for the industry.

David Frost, SWA chief executive, said: “This is a historic decision and only the fourth time whisky duty has been cut in a century. The Chancellor’s announcement will be toasted across the whisky industry and by consumers who are getting a fairer deal on tax when they have a drink of Scotch.”

The Scottish Government will also benefit from an extra £31million in 2015-16 through Barnett Formula funding. 

Liz Cameron, the chief executive of Scottish Chambers of Commerce, welcomed the reduction in drinks duty.

She said: “In addition to whisky, Scotland is at the forefront of the rapidly expanding craft beer sector and these reductions will help these industries prosper.” 

The Budget came as it emerged yesterday that North Sea oil and gas receipts are on course to be less than a tenth of what the SNP claimed they would have been in Scotland’s first year as a separate nation.

In their Scotland’s Future White Paper, the Nationalist government insisted offshore revenues would be between £6.8billion and £7.9billion.

But yesterday the independent Office for Budget Responsibility forecast that revenues for 2016/17 would total just £600million.

Scottish Tory energy spokesman Murdo Fraser said: “We knew the SNP’s oil projections were fanciful.”

Last night, a Scottish Government spokesman said: “In terms of previous Scottish Government oil price projections, these were in line with other independent international forecasts at the time, and the UK Government’s own Energy Department was anticipating oil prices around US$130 a barrel in 2018.”