The Scottish Government yesterday announced proposals to limit increases in the taxation of North Sea oil and gas.   

The proposal is in response to the recent changes to the taxation of North Sea oil and gas announced by UK Chancellor George Osborne in his recent Budget.  George Osborne raised the “supplementary tax” on North Sea oil production from 20% to 32%.  This is expected to raise £2bn and is to be used to fund a cut in fuel duty.

The trade body Oil and Gas UK said it could cost the industry £50bn over 10 years.

Scotland’s First Minister, Alex Salmond said companies should be allowed a minimum rate of return, before the tax is levied.   Iain Gray, leader of the Labour group of MSPs, endorsed the proposed reforms.