Shale gas supply chain ‘£1.4bn tax boom’

Remsol managing director Lee Petts outside his office
Remsol managing director Lee Petts outside his office
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In its latest policy paper, the Onshore Energy Services Group says that, with the right support, shale gas supply chain SMEs and their employees could one day generate over £1.49bn in taxes for the Government to spend on vital public services.

Released ahead of Wednesday’s Budget, the paper was being presented to the UK Shale Gas and Oil Forum by chief executive Lee Petts.

But unless the operators and Government do more to create the conditions for SMEs to thrive, there’s a real risk the supply chain will come to be dominated by foreign interests and an imported workforce.

Preston-based Mr Petts was expected to say: “British SMEs in the existing onshore oil and gas supply chain have both the capabilities and the appetite to play a big role in making shale gas a truly British success story.

“If they could replicate the success of their aerospace counterparts and claim 55 per cent of the prize predicted by EY last year, supply chain SMEs could one day be responsible for tens of thousands of jobs, with the workforce alone contributing a staggering £1.33bn to the economy through their taxes.

“Taxes on business profits could yield a further £0.16bn.

“That’s badly needed money, enough to pay for 21,716 GPs, or 50,011 nurses, or 55,657 teachers.”

Mr Petts added: “But unless the operators and Government do more to create the conditions for SMEs to thrive, there’s a real risk the supply chain will come to be dominated by foreign interests and an imported workforce.”

The OESG is calling on the Government to introduce a requirement for mandatory supply chain action plans, and to extend the Advanced Manufacturing Supply Chain Initiative to cover shale gas activities.

It is also developing procurement guidelines aimed at boosting the chances of smaller companies when bidding for contracts, and hopes that the onshore industry will adopt these principles as standard.

Mr Petts, boss of Remsol, will also say: “Whilst we welcome the work Government has been doing to create a policy environment that favours onshore oil and gas development as part of the UK energy mix, we hope the Chancellor will use the Budget Statement to announce specific measures aimed at safeguarding the future of home-grown supply chain SMEs.”