Overlooked until now: the potential economic contribution of shale gas supply chain SMEs
Until now, the economic arguments presented in favour of exploiting Britain's apparently huge shale gas resources have centred on the potential for jobs creation.By Lee Petts, managing director, Remsol.
But what we haven't heard is what that might actually mean for the economy, other than providing people with paid occupation.Our analysis, in a policy paper launched today, suggests that if British SMEs can replicate the success of small companies in the aerospace sector, claiming 55% of the supply chain prize predicted last year by EY, they could one day be responsible for tens of thousands of well-paying jobs.
Those jobs - 35,000 of them to be more precise - would command an industry average salary of £81,465 a year.At peak in 2024, again following the predictions made by EY and an earlier report from the Institute of Directors, this SME workforce would contribute over £1.33 billion to the economy in employment taxes.
That is a staggering amount of money, enough to pay for over 19,000 GPs, or over 40,000 nurses or nearly 50,000 teachers.But that's just at peak.
Between now and 2024, this SME workforce would raise a whopping £6 billion for the Treasury in cumulative income tax and National Insurance Contributions.That's why it's so important to ensure that the interests of British companies, and especially SMEs that are much more likely to have to take on and train new people, are protected. If we don't, there's a good chance we'll see the supply chain come to be dominated by foreign companies and an imported workforce.
That's not to say we shouldn't and won't see expertise from abroad supporting our shale gas endeavours, just that for it to be a success story here, the British public will need to see British companies - particularly trusted SMEs - share significantly in that success.Later this week, the chancellor will deliver his last budget of this Parliament. Whilst all eyes will undoubtedly be on moves to support North Sea oil, the OESG will be hoping to see some specific measures aimed at creating the conditions for our home-grown SME supply chain firms to thrive alongside shale gas development, including here in Lancashire. You can download our policy paper at http://oesg.org.uk/wp-content/uploads/2015/03/More-jobs-and-more-taxes.pdf