As Chancellor John Healey reportedly faces a £35billion dilemma between raising taxes and cutting public spending, Aberdeen & Grampian Chamber of Commerce is highlighting the £15 billion of untapped tax revenues in the North Sea.
Ahead of his Budget, the Institute for Fiscal Studies (IFS) has warned Healey may need to find tens of billions of pounds in additional funding by the end of the decade to protect services and meet defence targets.
The think tank warns higher inflation could derail the government's spending plans, and that avoiding cuts to departmental budgets could require an additional £25 billion a year by 2030-31, rising to about £35 billion if ministers also increased defence spending to 3% of GDP, The Times reports.
Commenting on the news, Russell Borthwick, Aberdeen & Grampian Chamber of Commerce Chief Executive, said: 'The new PM came into office promising growth in every postcode. Yet the first budget under his watch seems to be a choice between (even more) tax rises and cutting public spending.
'Isn’t there something missing? Yes, creating the conditions for growth.
'We have part of the answer, powered largely by this postcode.
'With a real risk of the lights going out and domestic supply chains being disrupted by fuel shortages this winter, we have a remarkable commitment from the UK oil and gas sector that 111 additional projects could proceed at pace with more pragmatic regulatory policy and a more competitive tax regime from 2027.
'As well as protecting thousands of jobs and supporting security of supply, this would unlock £50 billion of private investment and more than £15 billion of tax revenues in this parliament.
'That equals almost half of the £35 billion black hole being faced by the Chancellor, money which the Burnham administration can reinvest in its programme priorities whether this be defence, prison reform or easing cost of living challenges for those that need it.'
Source: Aberdeen & Grampian Chamber of Commerce
