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David Cameron goes 'all out for shale' with tax boost for councils willing to approve projects

Environmentalists accuse Prime Minister of trying to 'bribe' local authorities

Adam Withnall
Monday 13 January 2014 07:19 GMT
Anti-fracking protests hit headlines during test drilling in Balcombe in August 2013
Anti-fracking protests hit headlines during test drilling in Balcombe in August 2013 (Reuters)

David Cameron has announced a huge tax break for any councils willing to approve fracking projects in their area, as the Government goes "all out" to promote shale gas mining.

The Prime Minister said local authorities would receive 100 per cent of the business rates collected from drilling schemes - double their usual 50 per cent - in a move which Greenpeace has slammed as a "naked attempt to bribe councils".

The Government sees shale gas as having the potential to "guarantee energy supplies", as well as generating billions for the economy and supporting around 74,000 jobs.

Mr Cameron said: "A key part of our long-term economic plan to secure Britain's future is to back businesses with better infrastructure.

"That's why we're going all out for shale. It will mean more jobs and opportunities for people, and economic security for our country".

The announcement came as the French company Total confirmed it will invest about £30 million in a Lincolnshire drilling project currently run by a US firm. It is believed to be the first major energy company to buy a share in UK fracking.

Energy Minister Michael Fallon insisted that the incentive on offer was the same as for other renewable technologies such as wind farms and solar energy, adding that he expected 20 to 40 fracking exploration wells to be drilled in the next couple of years.

"It is only right, when there is local growth and local jobs, that the councils are able to retain more of the business rates in order to help improve or maintain local services," he told BBC Breakfast. "I think that is only fair that local people should see some of the direct benefit.

"We now know that we are sitting on hundreds of millions of cubic feet of shale gas.

"We do not yet know whether we can get it out as effectively as they have got it out in the US. We do not yet know whether it could be a really good reliable source of cheap energy. That is why we do need to explore.

"We expect 20 to 40 wells to be drilled over the next couple of years.”

Environmentalists said today's tax break, which could see councils receive an extra £1.7 million a year from each fracking site they approve, showed just how "worried" the Government is about local opposition to the controversial extraction method.

Lawrence Carter of Greenpeace said: "This is a naked attempt by the Government to bribe hard pressed councils into accepting fracking in their area.

"Cameron is effectively telling councils to ignore the risks and threat of large-scale industrialisation in exchange for cold hard cash.

"Having had their claims that fracking will bring down energy bills and create jobs thoroughly discredited, the Government is now resorting to straight up bribery to sell their deeply unpopular fracking policy."

Jane Thomas, a senior campaigner with Friends of the Earth, added: "It's ironic that a French-owned company is seeking to drill the UK for shale gas when it's banned from fracking in France due to environmental concerns."

A Local Government Association (LGA) spokesman said: "Councils have been clear that the people and communities whose areas host fracking sites must feel the benefit.

"Today's announcement from the Prime Minister is a step in the right direction, which will mean that business rates paid by shale gas firms will help councils to maintain and improve local services for residents."

Video: fracking in the UK

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