Oil & Gas UK, the representative body for the offshore energy sector, said that the Budget had laid strong foundations for the regeneration of the UK North Sea, with a £1.3bn package of support, including a 10% cut in the supplementary tax charge, a new investment allowance and a 15% cut in petroleum revenue tax.
David Frost, chief executive of the Scotch Whisky Association, said the chancellor’s 2% cut was only the fourth reduction in whisky duty in a century. ‘The industry is raising a glass to George Osborne and his Treasury team, as well as to all those who have supported our campaign over the last two decades,’ Frost said.
Scottish Finance Secretary John Swinney welcomed the support for the offshore sector, which he said was overdue. The supplementary charge cut, he said, simply restored the regime that Osborne had inherited in 2010 and amounted to a quiet admission that he had got the calculation wrong with his 2011 ‘tax grab’ from the industry.
For Labour, shadow Scottish Secretary Margaret Curran said the Budget revealed an ‘extraordinarily wide’ gap between ministerial perceptions and the realities of working people’s lives. ‘This is a government that is failing the ordinary people of Scotland, because we know that when ordinary working people succeed, Scotland succeeds,’ she said.
Danny Alexander, Liberal Democrat Chief Secretary to the Treasury, whose Inverness constituency is home to many oil-related jobs, claimed that the measures showed a UK government ‘determined to safeguard the future of this vital national asset and keep our economy on the road to recovery’.
Scottish Conservative leader, Ruth Davidson, welcomed the chancellor’s support for the whisky and oil industries. ‘The chancellor has listened to the oil industry and come good on the pledge we made to help,’ she said.
‘These tax breaks will aid investment and ensure a secure future for the North Sea.’
But a dissenting voice came from the co-convener of the Scottish Greens, Patrick Harvie, who said that the ‘£1.3 billion subsidy for fossil fuels’ should have been spent on clean energy or returning the railways to public ownership. ‘This coalition has delivered five years of hacking away at the public good and at the foundations of our welfare state,’ he said.
The Federation of Small Businesses in Scotland welcomed the simplification of taxes for the self-employed and the cut in fuel costs, but appealed to the governments in both London and Edinburgh to ensure that drive for more devolution did not increase small business red tape. Policy convener Andy Willox also urged Scottish Ministers to follow the UK lead on reviewing business rates.
The Scottish Trades Union Congress saw little to help the low-paid or those living on benefits. General Secretary Grahame Smith said: ‘The STUC welcomes the measures to support investment and exploration in the North Sea but, as long as the oil price remains around $53 a barrel, isn’t optimistic that this will be sufficient to safeguard jobs in the short to medium term.’
