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Shale Tax Millions Will Go To Communities, Says David Cameron

James Kirkup, The Daily Telegraph

Oil and gas fracking in UK receives major boost as Prime Minister David Cameron says local communities will be allowed to keep tax generated by industry

Oil and gas fracking in the UK will receive a major boost on Monday when Prime Minister David Cameron says that local communities will be allowed to keep millions of pounds of tax generated by the industry.

The announcement comes after it emerged that French energy giant Total will become the first oil and gas major to back UK fracking, a move that could be a catalyst for the sector. Total is expected to invest close to £30m in shale exploration in the East Midlands.

David Cameron will present the new rules as the latest part of his government’s “all out” push to boost the exploitation of shale gas.

Under the plans, local councils will now be allowed to keep all of the business rates shale operators pay. Downing Street said that could be worth up to £1.7m a year for a typical site. Energy firms could also make direct cash payments to local residents, and set up trust funds to be managed by local communities.

Supporters of fracking say the technique – which involves extracting gas trapped in shale by pumping in pressurised water and chemicals – can produce cheap energy, pointing to the US, where fuel prices have fallen sharply. Critics fear the process will pollute water tables in rural areas.

Companies involved in fracking have faced local protests in the UK, and ministers are keen to persuade communities to accept the technology.

The energy industry has also announced “community benefits” for people living near fracking sites, suggesting communities would receive £100,000 when a test well is fracked – and a further 1pc of revenues if shale gas is found.This could be worth £5m-£10m a year for the typical site.

The industry will today announce consultations on how that money will be handed out.

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