Britain's Finance Minister George Osborne said he would cut taxes for energy companies pumping oil from the country's North Sea fields, in a boost for the industry which is suffering from the impact of low crude prices.

"We need to act now for the long time... backing this key Scottish industry and supporting jobs," Osborne said in his annual budget statement on March 16.

A low oil price has slashed jobs in Scotland's oil-rich northeast and sapped Scottish public revenues.

"I am today cutting in half the Supplementary Charge on oil and gas from 20% to 10%. And I'm effectively abolishing the Petroleum Revenue Tax, too," he said.

Both measures will be backdated and effective from Jan. 1, 2016.

The tax changes will save the industry around 1 billion British pounds (US$1.4 billion) in the five financial years from 2016/2017 to 2020-2021, the budget document showed.

"We are only able to provide this kind of support to the oil and gas industry because of the broad shoulders of the United Kingdom. None of this support would have been remotely affordable if ... Scotland had broken away," Osborne said.

In September 2014, Scotland voted 55%-45% to stay within the U.K. in a referendum on independence.

Oil and gas companies, including BP Plc (NYSE: BP), Royal Dutch Shell Plc (NYSE: RDS.A) and Statoil ASA (NYSE: STO), have slashed their budgets by billions of dollars as they grapple with a 70% fall in oil prices.

Last month, the North Sea industry group Oil and Gas UK said the lower oil price has accelerated the permanent shutdown of some fields, with 21 ceasing production in 2015; the group said that as many as 80 could follow by the end of 2020.

Shares in oil companies with fields in the North Sea including BP, Shell and Cairn Energy traded up on the news. (US$1 = 0.7108 British pounds)

Offshore