Eoin takes four pot shots at the oil and gas industry:

4 reasons why although Shell & BP make £84,000,000 profit a day, the UK sees little benefit.
This week BP & Shell announced that they made £7.7 billion pounds profit in the previous 13 weeks trading. That is more than £84,000,000 profit a day. But in this piece I wish to point out how little the UK benefits from this in employment, GDP, or indeed Research and Development. 

Let's see now. The oil companies pay Petroleum Revenue Tax, which contributes £1,458m to the country's coffers ¹. The oil companies also pay corporation tax (I can't get the figure from their accounts, but given their UK operations it will be sizeable). They employ workers who pay income tax and national insurance, and for which they pay employer's national insurance. The BBC estimates that for BP the sum of all of these taxes, plus VAT paid by their customers, is £5.8bn. I would estimate that Shell's contribution is slightly lower, but it's still a significant figure.

In addition to all of this, HM Treasury earns fuel duties of £27,256m ² annually, which are directly as a result of the oil and gas industry. It doesn't contribute them, but they arise due to its activities. Without oil and gas, we wouldn't have this tax income at all.

Then there's the importance of oil and gas to pension funds. Both have significant dividend yields. Before the Gulf of Mexico explosion, BP yielded over 5% (now about 4%) and Shell yields approximately 5%. The BBC article claims that, before the blowout, BP paid £1 in every £7 of dividends received by UK pension funds, so it's clearly very significant to the retirement plans of British savers.

And let's not forget all the other companies that supply BP and Shell. Their ongoing existence relies very much on these large purchasers.

In this context, it's thoroughly bonkers to say that the UK doesn't benefit from their profitability. There are few companies that are more vital to the government's coffers, in fact.

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Filed under: Economics with tags bp, corporation tax, dividends, eoin clarke, idiots, national insurance, pensions, petroleum revenue tax, shell, uk, vat