Individual households will be given cash payments potentially running into thousands of pounds in recompense for fracking in their area, under new plans announced by Theresa May.
A £1bn shale wealth fund unveiled by former chancellor George Osborne in November will set aside up to 10 per cent of the tax proceeds from fracking to benefit the communities hosting wells.
But now the Prime Minister is amending the scheme so the money can go direct to residents rather than being given to councils or community trusts to spend, as Mr Osborne planned.
It is expected that the new fund could deliver as much as £10m to each community where wells are sited. Downing Street declined to estimate how much pay-outs could be worth, but it is thought that individual households could receive between £5,000 and £20,000.
The change could go some way to countering resident resistance to fracking, but is likely to be characterised by critics as a “bribe” to householders which could divert cash away from community priorities like infrastructure or skills training.
Speaking ahead of the launch of a consultation on the fund, Ms May said she wanted to make sure that individuals benefit personally from economic decisions.
And indicated that the model could be applied to other government programmes, such as the Community Infrastructure Levy charge on property development in England and Wales.
“The government I lead will be always be driven by the interests of the many – ordinary families for whom life is harder than many people in politics realise,” said Ms May.
“As I said on my first night as Prime Minister: when we take the big calls, we'll think not of the powerful but of you.
“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.
“We'll be looking at applying this approach to other government programmes in the future too, as we press on with the work of building a country that works for everyone.”
Under Ms May's changes, the option of giving money direct to residents will have to be considered when decisions are made on how to share proceeds from the Shale Wealth Fund, though cash could still go to councils to fund community projects.
A British Geological Survey (BGS) study of shale gas across the north of England estimated total reserves of 1,300 trillion cubic feet – the equivalent of more than 500 years of UK gas consumption at current levels.
The government is seeking comments on its proposals for a Shale Wealth Fund and will publish its response to the consultation later this year.
Press Association
