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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Exclusive: Labour MEPs call for Jeremy Corbyn to resign as leader

Letter demands Corbyn's departure and attacks his office for "promoting" the work of the Leave campaign. 

Labour's MEPs have called for Jeremy Corbyn to resign in the latest challenge to his leadership. In a letter sent to Corbyn and leaked to the New Statesman, Glenis Willmott, the chair of the European Parliamentary Labour Party (EPLP), wrote: "We find it hard to see how any Labour leader can continue in that role if they do not have the support of their MPs." Corbyn yesterday lost a no confidence vote among the Parliamentary Labour Party by 176 to 40. The letter also attacked the leader's office for an "official Labour briefing document" which "promoted the work of Kate Hoey and Gisela Stuart for the Leave campaign."

The demand for Corbyn's resignation is described by sources as the "majority position" of Labour's 20 MEPs. Their stance could prove crucial if the leader is not automatically included in any new contest (a matter of legal dispute) and is required to seek 50 nominations from MP/MEPs (20 per cent of the total). 

The letter reads: 

"The European Parliamentary Labour Party met today for its first meeting since the referendum and concluded that we should send you this letter today.

"The EPLP has always striven to have a loyal and constructive relationship with our party leader, and we have worked hard to cooperate with you over recent months. However, we have very serious concerns in the light of Labour's defeat in the referendum campaign.

"Responsiblity for the UK leaving the EU lies with David Cameron. That being said, we were simply astounded that on Friday morning, as news of the result sank in, an official Labour briefing document promoted the work of Kate Hoey and Gisela Stuart for the Leave campaign.

"Labour's loyal and dedicated teams of activists had just spent weeks on the doorstep and on street-stalls making the case to remain in the EU and countering leave campaign arguments. Yet you and your office authorised a briefing that put the whole Labour campaign on a par with two Labour politicians who had been appearing for weeks alongside right-wing politicians, such as Nigel Farage and Boris Johnson.

"Separate from the referendum issue, it has become clear in recent days that you do not have the confidence of the Parliamentary Labour Party. We find it hard to see how many Labour leader can continue in that role if they do not have the support of their MPs.

"So it it with a heavy heart that we urge you, for the sake of the Labour Party and for the people in our country who need a Labour government, to reconsider your position as Labour leader."

Yours sincerely,

Glenis Wilmott MEP

On behalf of the European Parliamentary Labour Party 

George Eaton is political editor of the New Statesman.