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Alex Salmond hits out at 'smash and grab' oil tax New Scots powers 'not ruled out', says Alex Salmond
(about 4 hours later)
Scotland's first minister Alex Salmond will call for UK Chancellor George Osborne to reconsider his "smash and grab" raid on North Sea oil revenues. Chancellor George Osborne has not ruled out new financial powers for Holyrood demanded by the SNP government, First Minister Alex Salmond has said.
Mr Salmond said the Budget measure in March, which will see an extra £2bn tax on oil and gas production, could cost 10,000 potential jobs. Mr Salmond has asked for control in areas including corporation tax and alcohol excise duties, following his party's landslide election win.
The first minister described it as a "blunt, last-minute" move designed to grab as much money as possible. The first minister said a two-hour meeting with the chancellor was "constructive and positive".
He will discuss alternatives to the move during a meeting with Mr Osborne. But Mr Orborne has ruled out a re-think of his North Sea oil tax hike.
It will be their first meeting since Mr Salmond was returned as first minister after the SNP secured an overall majority in the Scottish Parliament on 5 May. Mr Salmond said the UK Budget measure, which will see an extra £2bn tax on oil and gas production, could cost 10,000 potential jobs.
In his Budget, Mr Osborne raised supplementary tax on oil and gas production from 20% to 32%. The chancellor is willing to consider widening proposals to help sustain investment in the sector, in the form of broader field allowances.
The meeting was scheduled for just half an hour. In the end the two ministers met for close to two hours.
Alex Salmond says that should be read as a recognition from the chancellor of the first minister's new mandate from the Scottish people in the elections.
Top of the first minister's list today was the tax hike on North Sea oil producers, which he believes is damaging investment in the sector.
Although George Osborne won't scrap the increase, he's told Mr Salmond that he'll consider more help for producers in the sector in the form of broader field allowances.
But the first minister had much more to demand - further borrowing powers, control of corporation tax, alcohol excise duties and money from the fossil fuel levy.
He says the chancellor ruled nothing out - but that also means he's ruled nothing in.
And although Mr Osborne and the UK government might be listening, handing over all of those powers is another thing.
Elsewhere, Mr Salmond wants devolution of further borrowing powers, control of corporation tax, alcohol excise duties and money from the fossil fuel levy.
That would go further than the new Holyrood powers proposed in the Scotland Bill, currently going through Westminster, and the UK government has said the SNP must make a proper case for increased responsibility.
In his Budget, Mr Osborne raised supplementary tax on oil and gas production from 20% to 32%, to fund a cut in fuel duty.
Oil and Gas UK, the trade association representing the offshore sector, has said the tax rise would cost the industry as much as £50bn over the next 10 years.Oil and Gas UK, the trade association representing the offshore sector, has said the tax rise would cost the industry as much as £50bn over the next 10 years.
Oil revenues Mr Salmond told Radio Four's Today programme: "The problem with the smash and grab raid, the extra £2bn on top of the other £11bn the chancellor was expecting from Scottish oil revenues this year, is that it is going to cost a lot of jobs.
On BBC Radio Four's Today programme, Mr Salmond emphasised the importance of North Sea oil for jobs and investment in Scotland.
He said: "The problem with the smash and grab raid, the extra £2bn on top of the other £11bn the chancellor was expecting from Scottish oil revenues this year, is that it is going to cost a lot of jobs.
"It will actually make future chancellors worse off in the long-term because it will lead to a substantial reduction in what investment would have been.""It will actually make future chancellors worse off in the long-term because it will lead to a substantial reduction in what investment would have been."
He added: "What I will be saying to him is 'there is a way to get most of the money but maintain most of the jobs. The Treasury has said it expected offshore company profits to remain high, but, if it identified some potential impact on investment, would consider using allowances to deal with it.
"Wouldn't it be a bit more sensible to do that rather than the blunt, panicky, spatchcock, last-minute instrument that the chancellor decided on when he was trying to grab as much money as possible in the desperate days before his budget." Mr Osborne's department also said it was continuing to liaise with the industry on setting the level of its fair fuel stabiliser, where taxes would fall to reflect a cut in the oil price.
The first minister will also meet Energy Secretary Chris Huhne and Deputy Prime Minister Nick Clegg during his visit.