George Osborne has confirmed that he will deliver new North Sea tax cuts within weeks – but also signalled that he wants to ban Scots MPs from voting on the Budget.
The chancellor said he was “sure” that there would be “further steps” to protect oil and gas jobs in the Budget on March 18.
The pledge was made by the Conservative minister as he gave evidence to Westminster’s Treasury select committee yesterday.
Mr Osborne also used his appearance to trigger a fresh row over plans to devolve further powers to Holyrood – claiming MPs for Scottish constituencies could be banned from voting on aspects of the Budget in future.
Labour – which could struggle to govern in the future if it was unable to rely on its Scots MPs to pass a Budget – has warned that such a move would pave the way for the break-up of Britain.
Speaking on a visit to Aberdeen yesterday, Shadow Chancellor Ed Balls accused Mr Osborne of engaging in “petty politics”.
The North Sea has shot to the top of the political agenda in recent weeks amid fears that thousands of jobs could be put at risk by the falling oil price.
Asked about the concerns, Mr Osborne confirmed that extra tax breaks would be included in the Budget to try to revive the sector.
“I took decisions in the Autumn Statement to reduce taxes on North Sea oil, anticipating the pressures that the falling oil price would have on the industry and I’m sure we are going to have to take further steps at the Budget,” he said.
Industry body Oil and Gas UK wants the entire supplementary charge tax abolished in the Budget. The additional levy was cut from 32% to 30% in the Autumn Statement in December.
Controversially, Mr Osborne also raised the prospect of Scots MPs being banned from voting on parts of the Budget after income tax has been devolved to MSPs.
The chancellor said: “I don’t want to pre-empt the proposals that we are going to bring forward on English votes for English laws, as it’s commonly known, although I do think that they will have to apply on areas connected with the Budget.”
Speaking in Aberdeen, Mr Balls accused the chancellor of engaging in “short-term, divisive, petty politics”.
He added: “We supported the Smith Commission outcome. It makes it absolutely clear that tax matters which are reserved to the United Kingdom are a matter for all MPs to vote on.”
Stewart Hosie, SNP deputy leader and Treasury committee member, said: “It is seems incredible that the chancellor wants to ban Scottish MPs voting on parts of the entire UK Budget simply because of the incomplete devolution of income tax rates and bands.”
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