This week I delivered a Budget for the next generation.
It is a Budget that confronts our country’s long term challenges and makes sure Britain is fit for the future.
And nowhere is this challenge clearer than in Britain’s oil and gas sector.
That is why yesterday I announced £1 billion worth of tax breaks for the North Sea oil and gas industry. The brilliant leader of the Conservatives in Scotland, Ruth Davidson, has been one of the strongest voices urging me to act.
That’s £1 billion of new UK government support to encourage investment during these tough economic times and prepare the industry for the future.
Thanks to the changes I announced the UK will have one of the most competitive tax regimes for oil and gas in the world.
Petroleum Revenue Tax is being cut from 35% to zero and we are reducing the Supplementary Charge from 20% to 10%.
The Budget delivers on our promise to build a bridge to the future for the oil and gas industry, and comes on the back of existing support worth an unprecedented £1.8 billion.
That included a further £20 million for a new round of seismic surveys, announced by Prime Minister David Cameron in January.
This funding will be key to unlocking the North Sea for the next generation and making sure it is fit for the future.
There are many billions of barrels of oil still out there and the UK government is determined to encourage exploration activity to help the industry find these valuable new reserves.
The North Sea oil and gas sector has long been a success story for British industry and deserves this support.
In 1964, the UK government passed legislation to encourage the exploration and exploitation of the UK Continental Shelf’s energy reserves. It was a game changer.
But with high waves and strong winds the North Sea was a challenging place to look for oil and gas.
It took skilled workers and sheer determination for over 50 years to create an industry that supports an estimated 375,000 jobs today.
And I am determined it remains ‘open for business’ now and for the next generation.
Despite challenging times, the UK government has offered more support to its oil and gas sector than any other government in response to the falling oil prices.
But none of this support would have been possible without the broad shoulders of the UK.
With the proposed day when Scotland would have broken away from the UK only a week away, the Scottish government would have struggled to deliver such support alone – its own numbers show an independent Scotland would have faced a £20 billion black hole in its public finances over its first three years.
But due to the result of the Scottish referendum and the UK government’s support, the industry is in a competitive position and equipped to help the hardworking people it employs and the families it supports.
Supporting the North Sea is just one part of what is a historic Budget for Scotland.
I have always been clear that believing in our United Kingdom is not the same as believing that every decision should be taken in London. Far from it.
That is why this UK government is overseeing the most radical transfer of powers to Scotland in centuries.
As part of our commitment to implement the Smith Commission Agreement in full, this is the last time a UK Chancellor will set income tax rates and thresholds in Scotland.
In the future it will be for the Scottish government to decide the rates and thresholds.
What the rates will be is a matter for them. But Ruth was right when she said families in Scotland should not pay a premium for living north of the Border. Her “not a penny more” pledge makes sound economic sense.
And in the meantime the changes we’ve announced to the income tax personal allowance will benefit 2.6 million tax payers in Scotland.
The devolution of income tax is just one part of changes that we’ve delivered following the Vow.
Taken together the devolved powers will make the Scottish Parliament one of the most powerful and accountable devolved Parliaments in the world.
And I am confident that the powers, used effectively, can further increase the economic prosperity of Scotland, as part of the UK.
All of this means the upcoming Scottish elections will be fought on the issues which matter most: how the next Scottish government uses these extensive new powers.
Whatever happens in May, Scotland will continue to benefit from the economic and national security that comes from being part of the UK.
The Barnett formula is still in place, meaning decisions we’ve taken in England to prioritise frontline services, particularly in schools, and to support enterprise through the business rates system, have led to an increase in the Scottish Government’s budget of more than £650m over the next four years.
Today, I set out how the government’s long-term economic plan is working right across the UK. The deficit has fallen by almost two-thirds and here in Scotland employment is close to a record high.
And the UK government is continuing to back enterprise and growth in Scotland. My Budget delivers a tax cut for 73,000 Scottish businesses thanks to our decision to reduce Corporation Tax to 17% in 2020-21.
Following the Prime Minister’s announcement of UK government support for the £250m Aberdeen City Deal, yesterday I announced that we will open discussions with the Scottish Government and local partners on a city Deal for Edinburgh and South East Scotland. We are making good progress towards a Deal for Inverness.
The UK’s global reputation for the arts and culture is made possible by the creative endeavours of all parts of the UK. My Budget includes £5m for the new V&A in Dundee. This ground breaking project is the first ever design museum to be built in the UK outside London.
This Budget sets out the path we must navigate to get us through the current uncertainty in the global economy.
We need to act now rather than pay later to ensure Britain is fit for the future.
Making the bold decisions and confronting our country’s long term challenges – that is what my Budget is all about.
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