Page last updated at 14:04 GMT, Sunday, 1 June 2008 15:04 UK

4bn oil windfall claims rejected

Hand on a fuel station pump
Mr Swinney said UK ministers had to take decisive action

SNP claims that the UK Government is to receive a 4bn windfall from the duty on increased oil prices have been rejected by the chancellor.

The Scottish Government has insisted the cash should be used to help take the strain off hard-pressed consumers and businesses north of the border.

But Alistair Darling told BBC Scotland the level of extra revenue would not be known until later in the year.

And he said no one tax could be looked at in isolation.

Meanwhile, Scottish First Minister Alex Salmond urged Prime Minister Gordon Brown to back the creation of a Scottish oil fund, to give Scotland a share of tax revenue generated in Scottish waters.

The Scottish Government insisted the 4bn figure was accurate, but when asked on BBC Scotland's Politics Show if he accepted it, the chancellor replied: "No I don't".

If [the chancellor] dithers any longer, the United Kingdom Government is going to be consumed by fury over fuel prices
John Swinney
Scottish finance secretary
Mr Darling said the true figure would partly depend on how much fuel people bought.

He went on to brand the SNP's energy policy "daft" and "short-sighted".

"You can't look at any one tax in isolation," said the chancellor.

"Very often what happens is the government may get an increase in one part of the economy and a decrease in another.

"The fact that the economy has slowed down, the fact that the housing market has slowed down will have an effect on the amount of money that comes in through stamp duty."

Mr Darling said that, unlike the Scottish Government, which had no responsibility for raising money, he had to ensure the economy was balanced.

He added that it was wrong for Holyrood ministers to oppose new nuclear power stations.

Mr Darling said: "For politicians at Holyrood to say 'we don't have to care because we can always get the stuff from England if we need to', I think that's daft and its a very short-sighted policy."

'Ambitious drive'

But Scottish Finance Secretary John Swinney said the UK Treasury was going to make an "enormous" amount of money from oil price increases.

He said: "If the prices carry on at the average they've been at since April, which is $114 a barrel, then there'll be a 4bn-5bn windfall during this financial year for the chancellor."

Mr Swinney said decisive action was needed - not dithering from the Mr Darling.

"We've got businesses facing a very serious situation, householders facing enormous increases in costs and the chancellor just dithers," he said.

"If he dithers any longer, the United Kingdom Government is going to be consumed by fury over fuel prices," said the finance secretary, who said Scotland had launched an ambitious drive to increase renewable energy.


SEE ALSO
'Scotland's fury' over fuel costs
29 May 08 |  Scotland
MSPs rally on fuel cost concerns
28 May 08 |  Scotland
Brown urges increased oil supply
28 May 08 |  UK Politics
Fuel bills are 'burden' on firms
28 May 08 |  Scotland

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