BP's impact on the UK economy in 2017

BP’s contribution to the UK economy report sets out to quantify the impact of our business in more detail. We hope it will be of use in understanding how a large business plays its part in creating wealth and adding value to the national economy

2017 economic impact highlights

• BP supported an estimated £9.6 billion gross value added contribution to the UK’s gross domestic product (GDP) and 141,860 UK jobs in 2017.
• Of this total, BP’s direct UK operations – such as oil and gas fields, petrochemical plants, fuels retailing facilities and major offices – created a £3.4 billion gross value added contribution to UK GDP and employed 16,175 people.
• BP spent a total of £7.1 billion with UK suppliers:

- £4.9 billion on non-capital goods and services, supporting an estimated £4.2 billion indirect contribution to GDP and 90,000 jobs.

- £2.1 billion spent on capital goods, supporting an estimated £1.9 billion gross value added contribution to GDP and 36,000 jobs.

• BP’s direct, indirect and capital expenditures with UK suppliers are estimated to have supported 1 in every 226 jobs in the UK in 2017, or 0.4% of all employment in the country.
• BP spent a further £1.6 billion with UK-registered businesses operating overseas.
• BP Ventures invested a total of £44 million in 9 innovative businesses across the UK, aligned with our Upstream, Downstream and Alternative Energy interests.
• BP expanded its Alternative Energy business through a strategic partnership – the large-scale solar power developer Lightsource BP.
• An estimated 0.5% of UK GDP in 2017 was in some way reliant on BP’s activities – whether directly, indirectly, or through BP’s capital expenditure. That is £1 in every £213 of GDP created in the UK during the year.
• Around 40% of BP’s global R&D expenditure in 2017 was on work conducted in the UK.
• BP paid more than £1.7 billion in dividends to UK-based shareholders in 2017.
• In 2017, BP paid or collected more than £2.5 billion in tax to the UK government. That is equivalent to £1 for every £285 paid to HMRC in 2017, or 0.35% of all tax receipts.

Channels through which BP contributes to the UK economy

BP’s impact on the UK’s regional economy

Ten UK industrial sectors receiving the largest amount of BP's UK operational procurement spend in 2017

£ billion

Source: Oxford Economics

Procurement impact and supplier diversification

BP has relationships with a diverse range of UK suppliers, from architectural and engineering services to water transport.

BP’s around 2,860 UK suppliers of goods and services in 2017 are distributed throughout the UK, receiving a total of £4.9 billion.

Some 24% of them were located in London, 22% in the South East, 11% in Scotland and 10% in the Midlands.

In 2017, BP spent £2.1 billion on capital goods from around 670 UK suppliers. Of these, 22% were in Scotland, 20% were in the South East and another 16% were in London.

In addition, nearly £1.6 billion was spent by BP with UK-registered businesses operating abroad.

Source: BP, based on invoice location

BP’s impact on the UK’s regional economy

Employment impact

141,860 British jobs were supported by BP in 2017, with direct UK operations creating £3.4 billion gross value added contribution to UK GDP and employing 16,175 people.

The indirect impact of BP procurement of goods and services and capital expenditure supported an estimated additional 125,690 people in the wider UK economy.

Overall, Scotland, London, the South East and the North West were the biggest jobs beneficiaries from BP’s direct and indirect impacts. BP supported employment equivalent to 1.6% of all employment in Scotland, 0.6% in London, 0.5% in both the South East and the North West, and 0.2% in the North East.

Source: BP, Oxford Economics, ONS

BP’s ongoing social contribution to the UK

Over the past 50 years, BP has demonstrated a consistent commitment to UK communities through our support of schools, arts and culture, sport, community organizations and charities. In 2018 we are celebrating the 50^th anniversary of BP’s support for education in the UK.

BP’s UK employees volunteered 46,950 hours and enabled £3.2 million of contributions to community organizations during 2017. This was a significant increase compared to 2016.

You can find out more about our work at BP in the community

About the report

This is a short update to complement the original report by Oxford Economics, BP’s impact on the UK economy, September 2015 and the subsequent updates in 2016 and 2017.

This 2018 summary reflects the economic contribution for the calendar year 2017 and can be read alongside the previous reports for a year-on-year comparison.

In comparison to previous years, our UK economic impact reduced in 2017 in terms of gross value added (GVA) to the UK economy but grew in terms of the number of jobs supported. The principal reasons for these changes were that:

• BP slightly increased its overall spending with UK suppliers of non-capital goods and services, whilst decreasing its spending on capital goods.

• The Office of National Statistics revised upwards for 2017 the multipliers used to calculate GVA impact for the five largest spend categories for BP, so the reduction in spend on capital goods was largely compensated for by the increased GVA impact of spend on non-capital goods and services.
• In addition, the share of overall spending that was operational rather than on capital goods was higher in 2017 (70%) than it was in 2016 (65%). Since this is typically with industries that are less capital intensive, productivity tends to be lower, with more people employed per unit of spend in providing non-capital goods and services than in capital goods.

Methodology

Find out more about the methodology used in performing this analysis. 

Contacts, links and further information

• Press enquiries: bppress@bp.com
• Government affairs enquiries: UKGovernmentAffairs@uk.bp.com
  
• For further information: bp.com/uk
  

Disclaimer

BP disclaims any obligation to update this publication. Neither BP p.l.c., nor any of its subsidiaries, accepts liability for any inaccuracies or omissions or for any direct, indirect, special, consequential or other losses or damages of whatsoever kind in connection to this publication or any information contained in it.

Acknowledgement

BP would like to thank its partners in the production of this publication.

BP p.l.c., 1 St James’s Square, London SW1Y 4PD

© BP p.l.c. 2018