Chancellor signals tax breaks for fracking

An engineer working on a Cuadrilla fracking facility
An engineer working on a Cuadrilla fracking facility
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The Chancellor today signalled changes to the planning regime and tax breaks to help push forward with controversial fracking for shale gas.

In the spending review, George Osborne said the Government would “make the tax and planning changes which will put Britain at the forefront of exploiting shale gas”.

He also promised to provide the certainty investors needed to pour £100bn of investment into the UK’s energy infrastructure.

The news comes as the British Geological Survey was due to release its report into the total resources of shale gas under the North West.

It is thought it will show that the amount of gas, previously estimated at around 300 to 400 trillion cubic feet - enough to satisfy Britain’s total gas requirement for 13 years - is actually much greater.

Concerns have been raised that fracking, or fracturing of rock with high-pressure liquid to release the gas, can cause earthquakes and pollute water supplies, and that shale gas wells could blight the countryside and affect house prices.

Cuadrilla Resources has been prospecting for shale gas supplies on the Fylde and in lancashire amid the Bowland Shale rock formations deep beneath the ground.

Recent changes to the planning system aimed to give communities more control over whether wind farms were built in their area and increased payments for those who accept them, but it is not yet clear what the regime will be for shale.

This week the Environment Agency said Cuadrilla could successfully manage any waste, such as the water returned to the surface during the fracking process, and protect the environment.

Green MP Caroline Lucas hit out at the Chancellor’s support for “polluting” infrastructure such as shale gas extraction.

She said: “By committing the Government to reckless spending on polluting high-carbon infrastructure such as roads, airports and shale gas instead of investing in the jobs-rich green economy through, for example, renewable energy and energy efficiency, George Osborne is denying the British people those same huge benefits - and a more positive vision of the future.”

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