May considers giving fracking funds direct to residents

8 Aug 16

Prime minister Theresa May has set out possible changes to how local shale wealth funds created from shale gas exploration will operate, with distribution of money to local residents now considered as well as to councils and community groups.

The changes, announced today ahead of a formal consultation later this week, would allow local people to benefit more from fracking schemes that are given the go-ahead, May said.

Under the previous plan, the government pledged that 10% of tax revenues raised from shale gas operations would be invested into a shale wealth fund. This was to be funded by ringfencing the corporate tax revenues and a supplementary charge on fracking sites, which could be accessed by local authorities and community groups.

In addition, local authorities were to retain all of the business rates raised from local shale gas developments. It is thought May’s proposal is related to the corporate tax raised, but it is not yet clear if business rates, which were to be 100% devolved to local authorities from 2020, will be included.

It had been calculated that the shale wealth fund could raise £1bn for local communities hosting shale gas developments over the life of the drilling.

May said her government would be driven by the interests of ordinary families.

“This announcement is an example of putting those principles into action. It’s about making sure people personally benefit from economic decisions that are taken – not just councils – and putting them back in control over their lives.”

If this approach is confirmed, May said the government would also look at how it could be applied to other areas of local development, such as community infrastructure levy payments by developers to local councils.

Responding to the announcement, shadow energy and climate change secretary Barry Gardiner said that May was looking to bribe local communities and would set neighbour against neighbour.

“It is not right for communities and it is not right for the country,” he said. "We need a clean, secure, low-carbon future in the UK not a dirty fossil fuel one.”

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