Osborne: tax breaks will boost shale development

Chancellor George Osborne has announced plans to develop a “targeted” tax regime for the shale gas industry.

He told the Conservative Party conference in Birmingham that government help was needed “so that Britain is not left behind as gas prices tumble on the other side of the Atlantic”.

The chancellor’s initiative emerged as ministers lined up to say gas would continue to be an important part of the energy mix.

Osborne argued that a successful UK shale gas industry could create jobs and support energy security, benefiting the economy and taxpayers.

He drew parallels with the use of field allowances, which he said had encouraged investment in the North Sea. The government is now consulting with the shale gas industry over the design of the regime.

However, Laura Sandys, parliamentary private secretary to climate change minister Greg Barker, warned that shale would face a lot of opposition. “Onshore wind is a walk in the park by comparison,” she told a fringe meeting.

In response to Osborne’s speech, Renewable Energy Association chief executive Gaynor Hartnell said: “Provided renewables targets remain in force, our industry should be relaxed about the extent to which gas (shale or conventional) expands.”

This article first appeared in Utility Week’s print edition of 12th October 2012.

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