Chancellor urged to grant BP and Shell tax breaks amid Donald Trump's trade war

Oil giants such as BP and Shell, who operate in the North Sea, should be given significant tax breaks to help protect the UK against Donald Trump’s escalating trade war, Chancellor Rachel Reeves has been advised.

The Aberdeen & Grampian Chamber of Commerce is urging the UK government to reduce the 78 per cent tax burden on North Sea oil and gas producers, which also includes billionaire Sir Jim Radcliffe’s Ineos Group, as reported by City AM.

The lobby group believes this would be a "key first step towards greater domestic energy security", especially with US President Donald Trump announcing plans to impose import tariffs on Mexico, Canada and China. Trump has also threatened substantial levies on trade with the European Union.

The chamber of commerce referenced analysts’ predictions that oil prices could drop if a global trade war impacts demand. The Energy Profits Levy (EPL), a windfall tax imposed on energy production, is in place until 2023.

It adds a 38 per cent additional tax rate on oil and gas production, on top of corporation tax at 30 per cent and the 10 per cent supplementary charge. The chamber argues that the tax burden no longer needs to be as high, with "price conditions long having returned to normal