In previous years, the industry for oil and gas has been in decline in the UK. A reason for this is because of the high amount of UK workers seeking countries that are in more demand for their skills, in return for higher wages than here. 42% of engineering companies also said in a recent survey that they thought a contributing factor for the decline was because of the poor apprenticeship scheme in this country.
Recent reforms to the oil and gas industry, in the form of increased exploration and production, have brought about a positive multiplier in that sector of the economy. This is estimated to add £200bn over the next 20 years if followed through with by the Government. This also coincides with the current boom for fracking which, if gone ahead with, is predicted to provide an extra £3.3bn per annum to the UK’s trade balance.
Now that the UK is in greater need of skilled workers in this trade, wages in turn increase so that the supply of labour can meet demand. There has already been a 5% inflation in wages, but this is to further rise to 15%, making the average wage in the oil and gas industry £73,600.
Although this boost to the economy reduces our reliance on imports, it puts even more pressure on the already large oil and gas industry in the UK of £7bn. The more dependence put on this industry, the more unjustly high wages will become. This leads to questioning if wages are rising too high, too quickly for the industry and Government to maintain control and regulation over.