Out of the box: Scotland takes stock of Chancellor's last stand

While much of the attention was given to measures for savers through ISA and taxation changes, the Budget's more lasting effects on Scotland will of course be felt - for good or ill - on its powerhouse industries. Regardless of what they think (or whether they care) about the Tories' fortunes on May 7. What do the thought-leaders in Scotland's key sectors think of the likely impact of last week's measures?

WHISKY (AND OTHER DRINKS).

A feelgood sector in every sense, whisky is Scotland's star consumer product, and our main international icebreaker and calling card. Osborne's cutting of the 2% of whisky duty is an unambiguous triumph for the whisky industry and its parliamentary supporters.

It is also a lobbying coup for the recently appointed head of the SWA David Frost, formerly HM Ambassador to Denmark, who hailed the duty cut as an "historic decision.. to be cheered by consumer as well as benefitting the wider hospitality industry and help underpin investment across the sector which, in turn, will boost public finances."

As a result of the 2% cut, the duty "burden" on a £12.90 70cl bottle of Scotch has been reduced by 16 pence from £7.90 to £7.74. The total tax burden, including VAT, now stands at £9.89, or 77% of the average price of a bottle of Scotch, down from 78%.

It is only the fourth time the whisky duty has been cut in a century. "The move is a major boost to our industry as we look to grow again in the UK, and equally sends out an important signal on fair taxation to our export markets.

Perceptions on the unfairness of the spirits levy are rooted in the Budgets of Lloyd George and Austen Chamberlain, and have taken the industry far from the "equivalence" (direct correlation between percentage proof and percentage tax) regime that remains the SWA's long-term aim.

This all matters as the SWA put the economic contribution of Scotch to UK at almost £5bn, the direct benefits of which had grown by 21% since 2008, with the amount of supply chain jobs being supported rising to 40,300 jobs from around 35,000 in 2008. Dominated by giant, mostly foreign-owned, companies the industry has seen a remarkable growth in recent years, although this has stalled at home, and slowed in some important markets.

Recent years have seen a host of new players braving the formidable barriers to entry, while elsewhere in the drinks industry - including premium white spirits and creatively brewed beers - Scots branding has been a powerful engine of growth, although the industry has argued that given that 80% of the price of a bottle was in excise and VAT, it was forced to drive with the handbrake on.

OIL AND GAS

As widely trailed in advance, Osborne responded to the serious crisis in the Aberdeen-based oil and gas industry occasioned by the plunging oil price, by reversing his notorious "supplementary charge" from 30 per cent to 20 per cent (he had raised it to 32 per cent in 2011). The tax cut - dubbed an "essential lifeline" by oil magnate Sir Ian Wood - is worth £1.3bn to the sector, and it could open up opportunities for difficult to reach reserves in ageing Scottish fields, and prevent the premature demise of an already mature basin. Revenue tax on older fields has been slashed from 50 to 35 per cent, an incentive for squeezing out the last drops. Malcolm Webb, Oil & Gas UK's chief executive described the announcement as "laying the foundations for the regeneration of the UK North Sea", though he suggested it was up to the industry to deliver the cost and efficiency savings and collaborations, many of which were featured in the pre-oil price crash Wood Review.

Also welcome were the chancellor's announcement of a much-trailed "investment allowance", ending the patchwork of arrangements for different parts of the UK Continental Shelf that saw many a would-be investors scratching their heads before turning to less challenging territories.

HMRC predicts the net effects of the tax changes to be an 15% increase in production by 2019, by which time, with luck, the oil price may well have recovered.

Although there are some, including finance minister John Swinney who would like to see the oil multinationals pay less tax in future, defenders of the restored 20 per cent rate claim that the investment allowance effectively reduces the corporate tax rate.

However, even these measures will not entirely mitigate the current threat to jobs (Wood has warned of 40,000 losses) and some analysts argued for more active intervention, including a transferable tax allowance to enable explorers to raise capital through selling tax losses.

FINANCE

It suits no-one to trumpet the fact, but the Scottish financial service sector, largely based in Edinburgh, owes much of its sleek prosperity to its geographical and cultural proximity to the City of London. Dire warnings that Osborne's "tax grab" on the banks, dressed up as payback time for state support during the 2008 crisis, will drive away foreign investors from London are bound to cause a sympathetic shudder amongst the denizens of Charlotte Square and Melville Terrace. The Chancellor has lifted the banking levy from 0.156 per cent of bank liabilities to 0.21, expecting to raise an extra £900m a year from the sector. The British Banking Association protested that the sector already paid £40bn in taxes, while Scottish Financial Enterprise said the further increase in the bank levy "is risking making the UK an unattractive location for international banks to invest and putting our banks at a competitive disadvantage overseas."

GAMES

Although the bloom has faded from the sector, largely due to less than pro-active Westminster support in the infant stages, Dundee and Edinburgh remain hotbeds of the video gaming industry, home to several globally-celebrated names and world-class academic backup. TIGA, the industry body has "strongly applauded" Osborne's decision to launch a new £4 million prototype fund to help start-ups in the video games sector, plus an additional £4 million funding over the next two years to support the Skills Investment Fund. The scheme will provide match funding for training for video games, along with other creative sectors.

Dr Richard Wilson, chief executive of TIGA, said: "we submitted seven key proposals in our Budget Submissions to the Government and we are thrilled that the Chancellor has supported two of them. This is a great day for the UK video games development and digital publishing sector."

FLIGHT CONNECTIVITY

Given that Budget 2015 was largely about quelling complaints in time for the election, many are expressing surprise and disappointment that the Chancellor failed to grab the initiative by reducing Air Passenger Duty, the 21-year old tax that has progressively increased to make flights from UK airports amongst the most expensive in the world. Scotland, which has been promised devolved powers in the Smith Commission agreement, would benefit most from reduced rates, along with Northern Ireland, as it suffers the most from poor connectivity to overseas markets. Osborne could have removed a source of Scottish Government attacks by acting to remove a tax that, according to an Edinburgh Airport report, could add an extra £1bn to the economy by 2020 and create 4000 jobs. Edinburgh's chief executive Gordon Dewar has said said: "APD is a tax on Scotland's ability to compete with European airports of or size, and our economy is footing the bill in lost jobs and lost opportunities."

Scottish Chambers' Garry Clark - who also bemoaned the lack of a cut to 5% of VAT on tourism-facing businesses, called the APD omission "A missed opportunity for the Chancellor to shortcut the impending demise of this tax through a series of devolved cuts by axing it once and for all. "