Osborne: Scotland independence referendum causing harm

The chancellor claims uncertainty over the referendum is harming jobs

Chancellor George Osborne has claimed that the prospect of an independence referendum is damaging the Scottish economy.

Mr Osborne said major companies have questioned whether they should go ahead with investment plans.

The chancellor also urged clarity from the first minister on the form and timing of a referendum.

The SNP have, meanwhile, accused Mr Osborne of jeopardising investment by his plans for North Sea taxation.

In an interview for the BBC's Politics Show, Mr Osborne said: "The instability and the uncertainty that hangs over the Scottish economy [is] because of [First Minister] Alex Salmond raising the prospects of independence without actually providing any detail of when he wants to have his referendum or what the question will be.

"I think that uncertainty is damaging investment in Scotland - and there are major businesses around the world who have asked me as chancellor in the last year 'tell us what is going on in Scotland - we're worried about making an investment in that country'.

"I have told them go ahead with the investment, but I have to say those questions are being asked, and I think it is having a direct impact on Scottish jobs and Scottish prosperity."

'Talking Scotland down'

But Mr Osborne has been criticised by nationalists for the harm they said has been done by Mr Osborne's changes to the North Sea tax regime.

A spokesperson for Scotland's First Minister said:‬‪ "This is another example of the Tories talking Scotland down, and is the height of hypocrisy from the chancellor of a government which is undermining Scotland's recovery and has caused massive uncertainty to our vital offshore oil and gas industry with a shock tax hike."

In his last budget, Mr Osborne raised the supplementary tax on North Sea oil production from 20% to 32%, worth £2bn, to fund a cut in fuel duty.

The first minister's spokesperson said the recession in Scotland had been "both shorter and shallower" than that experienced across the UK.

"Scotland's economy continues to grow, and the Scottish labour market continues to outperform the UK as a whole.‬‪

"This is in stark contrast with the dispute the chancellor finds himself in for creating uncertainty in the North Sea because of his oil tax increase."

'Out of touch'

SNP MSP Mark McDonald, who represents North East Scotland, claimed the move showed how out of touch the chancellor was with an important sector of the Scottish economy.

Mr McDonald said: "George Osborne clearly doesn't understand the industry's concerns about his tax raid and its negative impact, not just in the west coast frontier area but in the marginal and brownfield places hardest hit by the tax hike."

Scottish Labour's finance spokesman Richard Baker said the SNP should "end this uncertainty" and set a date for the independence referendum.

He added: "Scotland's economy faces a double whammy of failed economic policies from the SNP and George Osborne and destabilising uncertainty on our future.

"By refusing to come clean on the timing of the referendum on separation, the SNP is causing real uncertainty which is clearly a major hurdle in attracting investment and returning Scotland back to stronger growth."

"The way to end this uncertainty is for the SNP to, once and for all, name the date for the referendum."