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16 March 2016, 15:51
Chancellor George Osborne has said his Budget demonstrates "we are better together in one United Kingdom'', with support for Scotland's oil industry, armed forces and cities and "the most radical devolution of power in British history''.
Scotland would have faced the highest deficit in the western world if it became independent next week as the Scottish National Party had planned, he told MPs in his Budget speech at Westminster.
Major tax cuts were announced for the oil and gas industry, which has been hit by falling global prices.
In a barb aimed at the pro-independence SNP, he said: "We are only able to provide this kind of support to our oil and gas industry because of the broad shoulders of the United Kingdom.''
A decision to cut the supplementary charge on oil and gas from 20% to 10% prompted Tory MPs to gesture wildly at the SNP benches, urging them to support the move.
But Mr Osborne was jeered by the SNP when he paid tribute to the "integrity and impartiality'' of Sir Nicholas Macpherson, the Permanent Secretary to the Treasury who nationalists accused of speaking out against Scottish independence.
Duty on whisky, one of Scotland's major exports, was frozen but shares in Scotland's "other national drink'' - Irn Bru -plummeted as he announced a sugar tax on the soft drinks industry.
The tax will raise an estimated £520 million a year and Scotland will receive a share of the revenue through the Barnett formula.
The cash will be spent on doubling funding for sport in primary schools in England, and Mr Osborne urged the devolved administrations to spend their share on the next generation too.
Mr Osborne said: "The oil and gas sector employs hundreds of thousands of people in Scotland and around our country.
"In my Budget a year ago, I made major reductions to their taxes but the oil price continued to fall so we need to act now for the long term.
"I am today cutting in half the supplementary charge on oil and gas from 20% to 10% and I am effectively abolishing petroleum revenue tax too, backing this key Scottish industry and supporting jobs right across the country.
"Both of these major tax cuts will be backdated so they are effective from January 1 this year, and my honourable friend the Exchequer Secretary will work with the industry to give them our full support.
"We are only able to provide this kind of support to our oil and gas industry because of the broad shoulders of the United Kingdom.
"None of this support would have been remotely affordable if, in just eight days' time, Scotland had broken away from the rest of the UK as the nationalists had wanted.
"Their own audit of public finances confirms that they would have struggled from the start with a fiscal crisis, under the burden of the highest deficit in the western world.
"Thankfully the Scottish people decided that we are better together in one United Kingdom.''
Mr Osborne said the UK Government ``is delivering the most radical devolution of power in British history''.
Holyrood is expected to give its consent for the Scotland Bill to proceed at Westminster today.
The Bill will hand MSPs powers over income tax, air passenger duty, abortion, the Crown Estate, benefits such as support for carers and those with disabilities, plus assign a share of VAT receipts to the Scottish budget.
Mr Osborne said: "We are devolving power to our nations. The Scottish Secretary and I have agreed the new fiscal framework with the Scottish Government.
"We are also opening negotiations on a city deal with Edinburgh, we backed the V&A Museum in Dundee, and in response to the powerful case made by Ruth Davidson we are providing new community facilities for local people in Helensburgh and the Royal Navy personnel in nearby Faslane, paid for by Libor fines.''
To jeers from the SNP, Mr Osborne said: "Sir Nicholas Macpherson has served as Permanent Secretary to the Treasury for three years under three different chancellors.
"Throughout, he has always demonstrated the great British civil service values of integrity and impartiality.''
Following his announcement on the sugar tax, Mr Osborne said: "The devolved administrations will receive equivalent funding through the Barnett formula and I hope they spend it on the next generation too.''
SNP economy spokesman Stewart Hosie welcomed the oil and gas changes and the Barnett consequentials from school sports spending.
"I think the supplementary charge change and the PRT (petroleum revenue tax) change are very welcome,'' he said.
"I was sadly disappointed at the lack of strategic direction, no mention of exploration or production allowances but I'm sure those discussions are ongoing.
"Likewise, the freeze on whisky duty and the freeze on fuel duty that we have been calling for.
"Also one of the small measures, the additional money for school sports, we very much welcome.
"I don't know what the Barnett consequential for that will be but it's probably a useful opportunity for us on this side to welcome the creation of the 150 schools sports hubs in Scotland in the last week which will deliver precisely the additional sport for children which is necessary.''