New data from the Office for National Statistics (ONS) today shows that the UK economy shrank for the second month in a row in May – with falling oil and gas production being cited as one main factors.
Responding to the figures, Russell Borthwick, Chief Executive at Aberdeen & Grampian Chamber of Commerce, said:
“Today’s figures highlight just how important the North Sea oil and gas sector is to the UK’s prosperity. However, they should not come as a surprise, given that imports of gas, which cost the UK tens of billions of pounds, have increased by 19% this year, while domestic production has dropped 20% compared to pre-pandemic levels.
“The Energy Profits Levy is taxing so-called windfall profits which simply do not exist, accelerating a decline in production. The result is real harm to the UK economy.
“By removing the windfall tax, the UK can meet half of our domestic oil and gas demand from the North Sea, instead of just a quarter on the current trajectory.
“This would generate an additional £165billion of GVA. By contrast, imported oil and gas does not support UK jobs, generates no equivalent tax revenue and – in the case of rising levels of imported LNG – can be four times more carbon intensive.
“We urge the government so see sense on this issue of critical national importance for the UK economy and for our future energy security.”
