£1.3bn package of support for the oil and gas industry

Among the measures he set out is a cut in the supplementary charge on oil industry companies’ profits from 30 per cent to 20 per cent, backdated to January.

The move effectively reverses the hike in the 2011 Budget when oil prices were much higher.

Mr Osborne said the UK Government will cut petroleum revenue tax from 50 per cent to 35 per cent next year, introduce a ‘’simple and generous’’ tax allowance to stimulate investment in the North Sea from the start of April and boost offshore exploration by investing £20m in new seismic surveys of the UK continental shelf.

The package is expected to result in more than £4bn of additional investment over the next five years and increase production by 15 per cent by the end of the decade.

It was also announced that a compensation scheme to help energy-intensive companies, such as steelmakers, is being brought forward at a cost of £25m.

Industry groups have been pressing for help because of the prospect of job losses and cutbacks caused by high bills.

A spokesman for Tata Steel, which has around 1,500 employees at its operations in Rotherham, Stocksbridge and Brinsworth, in South Yorkshire, said: “We welcome the Chancellor’s plans to reduce energy costs for foundation industries by bringing forward part of the EII mitigation package.

“However, he has proposed bringing forward relief from feed-in tariffs.

“The benefit from this measure will be very limited compared to the overall burden we face – we estimate four to five times less than if he had brought forward the relief we still urgently need, against the spiralling costs of the renewables obligation.”