Osborne's budget draws Scottish battlelines

The dust is just beginning to settle on the budget but the Scottish battle lines are already drawn.

Osborne's fuel duty stabliser has meant to keep the lid on rising petrol prices, an unenviable task, and it has been roundly slated by opponents for being ineffective against his own VAT rise and inflation.

The idea of a stabiliser, originally an SNP plan, was that the Treasury itself would take the hit from reducing pump prices as it collected more revenue from the rising cost of oil barrels.

Osborne decided not to do it that way and instead he hit the North Sea oil companies with a £2bn tax on their rocketing profits. There is a stabiliser element - if the price of a barrel goes below $75 the tax won't be collected.

The effect has been sensational with predictable anger from oil and gas producers, who claimed the tax hike on their production would damage a vital UK sector.

The move also threw a spanner in the SNP election machine that was primed to whine for a fuel stabiliser between now and election day in May.

Having been granted their wish the SNP’s John Swinney compained bitterly that "Scotland’s North Sea" resources were funding the fuel cut. Osborne's tax on oil revenues would be enough for a 50p reduction in petrol prices in an independent Scotland, sat some naive nationalist economists, conveniently forgetting that an independent Scotland would have little else other than oil revenues to fill the Treasury coffers.

Michael Moore, the Shadow Scottish Secretary, declared himself delighted with the SNP reaction. He said: "This shoots a fox the SNP was keen to run with. All the time we said we would listen as a government and we’ve been able to put in place a 1p cut in place of Labour’s 5p rise in prices."

As it happens, I had a chat with the director of a North Sea oil supply company this week. As long as oil is over $100 a barrel he reckons they have a licence to print money in the North Sea, giving Aberdeen and it's environs that soaraway spin that the rest of Scotland doesn't feel.

Whatever they are the oil companies are not the "squeezed middle" that Osborne, Miliband and everyone else is chasing.

Osborne also promised to look allowing Northern Ireland to set a different corporation tax to allow the Province to compete across the border with the Irish Republic.

That woke up SNP MPs who want Scotland to be able to set a lower level of business tax from the rest of the UK. Another debating point on the long road back to Holyrood.