Councils that back “fracking” will get to keep more money in tax revenue as part of an “all-out” drive to promote drilling, Prime Minister David Cameron has said.

Mr Cameron said English local authorities would receive all the business rates collected from shale gas schemes – rather than the usual 50%.

The government says projects will support 74,000 jobs and reduce bills.

But Greenpeace accused ministers of trying to “bribe councils”.

The announcement comes as French company Total confirmed plans to invest about £30m to help drill two exploratory wells in Lincolnshire. It is the the first major energy company to invest in fracking in the UK.

The British Geological Survey estimates there may be 1,300 trillion cubic feet of shale gas present in the north of England.

But the process to extract it – called fracking – has led to protests, with environmentalists fearing the technique could cause small earth tremors, water contamination and environmental damage.

Fracking, short for “hydraulic fracturing”, involves drilling deep underground and releasing a high-pressure mix of water, sand and chemicals to crack rocks and release gas stored inside.

‘Security’

Whitehall officials said the business rates commitment would mean councils keeping up to £1.7m extra a year from each fracking site.

The mining industry has already pledged to give communities £100,000 per test drilling and a further 1% of the revenues if shale is discovered, they added.

Mr 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.”

Energy Minister Michael Fallon said local communities could benefit by up to £10m if shale gas was successfully extracted in their communities, through a 1% levy on company profits from fracking.

This would be on top of the business rates they would receive from companies involved in drilling, worth up to £1.75m a year.

“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,” he told Radio 4’s Today programme.

The Local Government Association, which represents councils in England, said the announcement was a “step in the right direction” but any packages had to “fairly remunerate” those affected.

“Given the significant tax breaks being proposed to drive forward the development of shale gas and the impact drilling will have on local communities, these areas should not be short-changed by fracking schemes,” said a spokesman.

“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%.

“The community benefits of fracking should be enshrined in law, so companies cannot withdraw them to the detriment of local people.”

Speaking for the Labour Party, shadow energy minister Tom Greatrex said it was right for communities to share in the potential rewards from shale gas.

But he called on the government to “get its priorities right”.

“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,” he said.

But Lawrence Carter of Greenpeace said: “This is a naked attempt by the government to bribe hard-pressed councils into accepting fracking in their area.

“Cameron is effectively telling councils to ignore the risks and threat of large-scale industrialisation in exchange for cold, hard cash.

“But the proposal reveals just how worried the government is about planning applications being turned down.

“Having had their claims that fracking will bring down energy bills and create jobs thoroughly discredited, the government is now resorting to straight up bribery to sell their deeply unpopular fracking policy.”

Mr Fallon said there was a “very strict system of regulation” and the hydraulic fracturing of wells would not be allowed unless it was “absolutely safe”.

http://www.bbc.co.uk/news/uk-politics-25705550