New Scots powers 'not ruled out', says Alex Salmond

Chancellor George Osborne has not ruled out new financial powers for Holyrood demanded by the SNP government, First Minister Alex Salmond has said.

Mr Salmond has asked for control, in areas including corporation tax and alcohol excise duties, following his party's landslide election win.

Both sides described the two-hour meeting as "constructive".

A spokesman for the chancellor said "nothing spectacular" had come from the meeting on his North Sea oil tax hike.

Mr Salmond said the UK Budget measure, which will see an extra £2bn tax on oil and gas production, could cost 10,000 potential jobs.

The chancellor has previously said he was willing to consider widening proposals to help sustain investment in the sector, in the form of broader field allowances.

Elsewhere, Mr Salmond wants devolution of further borrowing powers, control of corporation tax, alcohol excise duties and money from the fossil fuel levy.

That would go further than the new Holyrood powers proposed in the Scotland Bill, currently going through Westminster, and the UK government has said the SNP must make a proper case for increased responsibility.

The chancellor' s spokesman said Mr Osborne had agreed to consider the first minister's arguments, and, on corporation tax, would consider evidence from Northern Ireland.

The chancellor has agreed to look at fossil fuel levy receipts again but "hasn't promised anything", the spokesman said.

In his Budget, Mr Osborne raised supplementary tax on oil and gas production from 20% to 32%, to fund a cut in fuel duty.

Oil and Gas UK, the trade association representing the offshore sector, has said the tax rise would cost the industry as much as £50bn over the next 10 years.

Mr Salmond told Radio Four's Today programme: "The problem with the smash and grab raid, the extra £2bn on top of the other £11bn the chancellor was expecting from Scottish oil revenues this year, is that it is going to cost a lot of jobs.

"It will actually make future chancellors worse off in the long-term because it will lead to a substantial reduction in what investment would have been."

The Treasury has said it expected offshore company profits to remain high, but, if it identified some potential impact on investment, would consider using allowances to deal with it.

Mr Osborne's department has also said it was continuing to liaise with the industry on setting the level of its fair fuel stabiliser, where taxes would fall to reflect a cut in the oil price.

Meanwhile, the new Scottish Liberal Democrat leader, Willie Rennie, was also in London to meet with party colleagues in the coalition, including Armed Forces Minister Nick Harvey, Business Secretary Vince Cable and Michael Moore, the Scottish secretary.

Mr Rennie was pressing the case to retain the two under-threat Scottish RAF bases, and campaigning for the planned new green investment bank to be based north of the border.

Turning to the SNP's forthcoming independence referendum, the Scots Lib Dem leader added: "The first minister is here on much more negative terms as he starts to try and split the UK.

"Mr Salmond is very good at criticising and undermining other governments, but he himself has given no indication on how he plans to makes an independent Scotland work."