July 19 - The British government is hoping to create the world’s most generous shale tax regime, slashing the tax on income on shale production from 62 percent to 30 percent. As Kirsty Basset reports, the government is also insisting on benefits for affected communities to placate environmental concerns about fracking.
A generous tax break for a controversial industry. The British government is slashing taxes on income from shale production - from 62 to just 30 percent. Finance Minister George Osborne is hoping to create the world's most generous shale tax regime - to encourage investment in the industry, still in its infancy. (SOUNDBITE)(ENGLISH) BRITISH CHANCELLOR GEORGE OSBORNE SAYING: "We want Britain to be at the forefront of the shale gas revolution This is a major new energy source that can reduce energy bills for families and for businesses, can benefit the local communities where the energy exists and can create thousands of jobs. And of course you have to get the balance right with the tax regime and environmental protection. But let's be clear - this is a real chance to get cheaper energy for Britain." Britain is Europe's largest gas consuming nation - and there are hopes it will be able to follow the United States in exploiting shale gas to gain energy independence. But there are fears the process used to extract the gas - known as fracking - could lead to earthquakes and contaminate drinking water. Business Secretary Vince Cable says concerns will be addressed. (SOUNDBITE)(ENGLISH) BUSINESS SECRETARY VINCE CABLE SAYING: "Communities are being offered significant sums of money - I think 100,000 per well plus additional revenues providing they are willing to be positive." Experts say it should take at least two years of exploratory drilling to see whether or not shale is a viable business in the UK.