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Last Updated: Monday, 5 December 2005, 20:08 GMT
Brown accused of 'smash and grab'
North Sea oil rig
Taxes on North Sea oil profits have been doubled
Scottish National Party leader Alex Salmond has accused Chancellor Gordon Brown of a 2bn "smash and grab" raid on oil revenues.

His claim followed Mr Brown's pre-budget announcement that he would double taxes on the profits of North Sea oil and gas companies.

He has increased from 10% to 20% the supplementary charge he introduced in 2002, which is imposed on profits.

But opposition parties and unions accused Mr Brown of endangering jobs.

Golden egg

The chancellor delivered his autumn statement in the Commons on Monday and blamed rising oil prices for lower economic growth in Britain.

He announced there would be a new package of incentives for new companies that want to explore difficult North Sea oil and gas fields.

But Mr Salmond was far from satisfied with the chancellor's statement.

Scotland's black gold is filling Brown's black hole
Alex Salmond
SNP

He said: "Gordon Brown is killing the goose that lays the golden egg and potentially putting thousands of future jobs at risk.

"He could have sat down and discussed options with the industry but this is a smash and grab to fill the black hole in his coffers.

"It is a 2bn cash grab on the oil industry and Scotland. Scotland's black gold is filling Brown's black hole.

"It is a disgrace that he is treating the North Sea as a short-term cash cow and threatening investment and jobs."

The Conservative Party said Mr Brown "couldn't care less for Scotland".

Finance spokesman Derek Brownlee added: "There will now be some oil fields in the North Sea paying 75% tax overall, which will hit them hard.

Gordon Brown
Mr Brown delivered his pre-budget statement on Monday
"It is clear that Gordon Brown is a roadblock to the reform of the Scottish economy.

"The only green lights he has offered are for even higher taxes and yet more borrowing."

Oil unions also expressed fears for job safety in light of Mr Brown's statement.

Jake Molloy, general secretary of the OILC offshore union, said the chancellor's announcement had come as a shock.

He said there was a potential impact on jobs - and on safety, if budgets were cut.

Steve Harris, of the UK Offshore Operators' Association, said predicted investment in the North Sea would be hit.

He said this, combined with a tax grab in 2002, had produced "the least stable fiscal regime of any oil province in the world".

North Sea oil is a national resource and all taxpayers should benefit from profits reaped by companies as a result of price increases
Alistair Darling
Scottish Secretary

He said: "It's like asking people to invest in something close to a banana republic, in terms of the reliability of its tax regime."

Mr Harris described the increase as a "brutal instrument", which had been applied without any industry consultation.

However, Scottish Secretary Alistair Darling said: "The reform of North Sea oil taxation aims to strike the right balance between producers and consumers.

"North Sea oil is a national resource and all taxpayers should benefit from profits reaped by companies as a result of price increases."

He added that an additional 49m would be made available to the Scottish Executive as a result of the chancellor's announcements.


BBC NEWS: VIDEO AND AUDIO
See the oil industry's reaction to the statement



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