Five questions answered on new fracking tax incentive for councils

Why is the government offering an incentive for fracking?

The government today announced that local councils will receive a higher percentage of fracking business rates revenues. We answer five questions on this new fracking incentive. 

What exactly is the government offering councils that support fracking?

UK Prime Minister David Cameron has said that English local authority councils will receive 100 per cent of the business rates received from fracking companies, instead of the usual 50 per cent. Normally the other 50 per cent would go to central government.

Why is the government offering this incentive for fracking?

Fracking, or hydraulic fracturing - its official name - is the process of drilling deep underground using high pressure and a mix of chemicals, water and sand to crack rocks and release the gas inside.

There has been much opposition against fracking in the UK, with protests regularly making the headlines. Those against the technique believe fracking could cause small earth tremors or contaminate water.

This latest tax incentive is designed to encourage councils to approve fracking in spite of local objections.

How much could local authorities reap from this new fracking tax law?

Government officials say the new business rate commitment would mean councils would keep up to £1.7m extra a year from each fracking site.

This is on top of a pledge by industry to give communities £100,000 for test drilling and a further one per cent of the revenues if shale is discovered.

This one per cent levy could provide "£10m per wellhead" according to Energy Minister Michael Fallon.

What else has the government said?

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.

Fallon told Radio 4's Today programme:

We want local councils and local people to benefit from this exploration. We expect 20 to 40 wells to be drilled in exploration over the next couple of years and I think it's very important that local communities see some of the benefit.

What have others said?

Jane Thomas, Friends of the Earth Senior Campaigner, said in a statement:

"This latest Government move highlights the depth of local opposition to fracking and the desperate lengths ministers are prepared to go to overcome it.

“People are right to be concerned about the impact of shale gas extraction on their communities - especially as experts say it won’t lead to cheaper fuel bills.

"This move raises potentially serious concerns about conflicts of interest, if councils that benefit from this money are also the ones who decide on planning applications from fracking firms in the first place.”

Labour shadow energy minister Tom Greatrex, speaking to the BBC, said: "Only by fully addressing legitimate environmental and safety concerns about fracking with robust regulation and comprehensive monitoring will people have confidence that the exploration and possible extraction of shale gas is a safe and reliable source that can contribute to the UK's energy mix.”

The Local Government Association, which represents councils in England, told the BBC: "One percent of gross revenues distributed locally is not good enough; returns should be more in line with payments across the rest of the world and be set at 10 per cent.

"The community benefits of fracking should be enshrined in law, so companies cannot withdraw them to the detriment of local people."

Fracking continues to be a contentious practice in the UK. Photograph: Getty Images.

Heidi Vella is a features writer for Nridigital.com

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Erdogan’s purge was too big and too organised to be a mere reaction to the failed coup

There is a specific word for the melancholy of Istanbul. The city is suffering a mighty bout of something like hüzün at the moment. 

Even at the worst of times Istanbul is a beautiful city, and the Bosphorus is a remarkable stretch of sea. Turks get very irritated if you call it a river. They are right. The Bosphorus has a life and energy that a river could never equal. Spend five minutes watching the Bosphorus and you can understand why Orhan Pamuk, Turkey’s Nobel laureate for literature, became fixated by it as he grew up, tracking the movements of the ocean-going vessels, the warships and the freighters as they steamed between Asia and Europe.

I went to an Ottoman palace on the Asian side of the Bosphorus, waiting to interview the former prime minister Ahmet Davu­toglu. He was pushed out of office two months ago by President Recep Tayyip Erdogan when he appeared to be too wedded to the clauses in the Turkish constitution which say that the prime minister is the head of government and the president is a ceremonial head of state. Erdogan was happy with that when he was prime minister. But now he’s president, he wants to change the constitution. If Erdogan can win the vote in parliament he will, in effect, be rubber-stamping the reality he has created since he became president. In the days since the attempted coup, no one has had any doubt about who is the power in the land.

 

City of melancholy

The view from the Ottoman palace was magnificent. Beneath a luscious, pine-shaded garden an oil tanker plied its way towards the Black Sea. Small ferries dodged across the sea lanes. It was not, I hasten to add, Davutoglu’s private residence. It had just been borrowed, for the backdrop. But it reminded a Turkish friend of something she had heard once from the AKP, Erdogan’s ruling party: that they would not rest until they were living in the apartments with balconies and gardens overlooking the Bosphorus that had always been the preserve of the secular elite they wanted to replace.

Pamuk also writes about hüzün, the melancholy that afflicts the citizens of Istanbul. It comes, he says, from the city’s history and its decline, the foghorns on the Bosphorus, from tumbledown walls that have been ruins since the fall of the Byzantine empire, unemployed men in tea houses, covered women waiting for buses that never come, pelting rain and dark evenings: the city’s whole fabric and all the lives within it. “My starting point,” Pamuk wrote, “was the emotion that a child might feel while looking through a steamy window.”

Istanbul is suffering a mighty bout of something like hüzün at the moment. In Pamuk’s work the citizens of Istanbul take a perverse pride in hüzün. No one in Istanbul, or elsewhere in Turkey, can draw comfort from what is happening now. Erdogan’s opponents wonder what kind of future they can have in his Turkey. I think I sensed it, too, in the triumphalist crowds of Erdogan supporters that have been gathering day after day since the coup was defeated.

 

Down with the generals

Erdogan’s opponents are not downcast because the coup failed; a big reason why it did was that it had no public support. Turks know way too much about the authoritarian ways of military rule to want it back. The melancholy is because Erdogan is using the coup to entrench himself even more deeply in power. The purge looks too far-reaching, too organised and too big to have been a quick reaction to the attempt on his power. Instead it seems to be a plan that was waiting to be used.

Turkey is a deeply unhappy country. It is hard to imagine now, but when the Arab uprisings happened in 2011 it seemed to be a model for the Middle East. It had elections and an economy that worked and grew. When I asked Davutoglu around that time whether there would be a new Ottoman sphere of influence for the 21st century, he smiled modestly, denied any such ambition and went on to explain that the 2011 uprisings were the true succession to the Ottoman empire. A century of European, and then American, domination was ending. It had been a false start in Middle Eastern history. Now it was back on track. The people of the region were deciding their futures, and perhaps Turkey would have a role, almost like a big brother.

Turkey’s position – straddling east and west, facing Europe and Asia – is the key to its history and its future. It could be, should be, a rock of stability in a desperately un­stable part of the world. But it isn’t, and that is a problem for all of us.

 

Contagion of war

The coup did not come out of a clear sky. Turkey was in deep crisis before the attempt was made. Part of the problem has come from Erdogan’s divisive policies. He has led the AKP to successive election victories since it first won in 2002. But the policies of his governments have not been inclusive. As long as his supporters are happy, the president seems unconcerned about the resentment and opposition he is generating on the other side of politics.

Perhaps that was inevitable. His mission, as a political Islamist, was to change the country, to end the power of secular elites, including the army, which had been dominant since Mustafa Kemal Atatürk created modern Turkey after the collapse of the Ottoman empire. And there is also the influence of chaos and war in the Middle East. Turkey has borders with Iraq and Syria, and is deeply involved in their wars. The borders do not stop the contagion of violence. Hundreds of people have died in the past year in bomb attacks in Turkish cities, some carried out by the jihadists of so-called Islamic State, and some sent by Kurdish separatists working under the PKK.

It is a horrible mix. Erdogan might be able to deal with it better if he had used the attempted coup to try to unite Turkey. All the parliamentary parties condemned it. But instead, he has turned the power of the state against his opponents. More rough times lie ahead.

Jeremy Bowen is the BBC’s Middle East editor. He tweets @bowenbbc

This article first appeared in the 28 July 2016 issue of the New Statesman, Summer Double Issue