Budget could deliver £70 billion of economic value from £50 billion of additional investment, says Offshore Energies UK
Spending plans must back homegrown energy production as continuing delay is accelerating the decline of the North Sea, weakening Britain’s industrial base and increasing reliance on imported energy, says OEUK in its submission to the Chancellor ahead of the Autumn Budget
The UK imported more than 40% of its energy in 2025. Replacing domestic production with imports means higher emissions, fewer UK jobs and less tax paid in Britain.
The UK’s offshore energy sector remains a strategic national asset. Independent analysis commissioned by OEUK from the Oxford Economics consultancy estimates that offshore oil and gas and offshore wind contributed £36.2 billion in gross value added to the UK economy in 2024 and supported 241,000 jobs across the country.
But OEUK which represents almost 500 organisations across oil and gas, offshore wind, carbon capture and storage and hydrogen, warns that domestic oil and gas production has fallen by 40% in the last five years and is on course to halve again by 2030.
This accelerated decline is driven by uncertainty and policy choices rather than geology, putting investment, tax revenues, skilled jobs and critical supply chain capability at risk.
As the deadline for budget submissions ends today [Wed 9th Sept] OEUK is calling on government to stand by its commitment to pragmatism in its approach to domestic energy production by introducing the Oil and Gas Revenue Levy in January 2027.
It is also urging ministers to provide long-term investment certainty for offshore wind through continued Contracts for Difference delivery and transmission charging reform. Deployment of carbon capture and storage must be similarly accelerated so the UK can become a hub for carbon storage imports.
The sector can unlock an additional £50 billion of capital investment, with £32 billion coming within the next decade. This could add £70 billion in value to the UK economy from domestic oil and gas production alone, deliver an additional £14.9 billion in production and payroll taxes over the next decade, and unlock a further 1.3 billion barrels of oil and gas production by 2035.
OEUK Chief Executive David Whitehouse said:
“The North Sea can power economic renewal. The Prime Minister has spoken of reindustrialisation The Chancellor’s priority is growth while supporting UK industries. The Energy Secretary has highlighted the importance of energy security. Our proposal delivers on all fronts.
“With the right Budget choices, this sector can unlock billions of pounds of private investment, support jobs in every constituency across the whole of the UK, strengthen energy security and deliver more tax revenue for the Exchequer.
“We have seen how the Energy Profits Levy continues to drive away investment from the UK Continental Shelf and accelerating decline which is being felt right across the country. Bringing forward the Oil and Gas Revenue Levy to January 2027 would send a clear signal that the UK is serious about backing domestic production over imports.
“This is not a choice between today’s energy security and tomorrow’s clean energy system. The same world-class supply chain that supports domestic oil and gas is essential to offshore wind, carbon storage and hydrogen. If we weaken that foundation now, we weaken the UK’s ability to build the low-carbon industries of the future.
“We are urging the government to recognise the unarguable analysis we have presented”.
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