Cameron: 'we're backers of frackers'

The prime minister will today announce that local authorities can keep all the business rates they extract from frackers. Is that enough to persuade the chattering classes?

by Emma Haslett
Last Updated: 20 Nov 2014

Since fracking became A Thing, Cameron has learned the hard way that you don’t mess with the residents of idyllic Surrey villages. Having made various attempts at getting projects off the ground, frackists have been chased out of middle class havens by people wearing Hunters and Barbours, tails clamped between legs, uttering vows they’ll never go back.

But Cameron clearly reckons he can get the chattering classes back onside by talking a language they understand: cold, hard cash. In a speech today, the PM will promise local authorities will be allowed to keep all the business rates they collect from fracking projects, rather than the 50% they usually get. On top of that, energy firms could make cash payments directly to local residents.

Considering the average well could be worth £1.7m a year, and that ‘community benefits’ could be £100,000 when a test well is fracked, and another £5m-£10m a year for successful wells, anti-fracking campaigners may find their meetings suddenly become rather less well attended.

You can see what the government’s trying to do: fracking represents big business at a time when the UK’s immediate future is looking increasingly… gloomy. In June, energy regulator Ofgem warned that unless the increases energy production, it’s likely we’ll begin to experience blackouts by 2015.

But if energy companies can extract 10% of the UK’s estimated 1.3 trillion cubic metres of shale gas reserves, that will keep the lights on for the next 50 years. So the fact that Total, for instance, has pledged to spend £30m on two exploratory wells in the East Midlands isn’t just good news for the Treasury: it means the likes of Ineos boss Jim Ratcliffe, who warned last year that the UK’s ‘frack off’ attitude is putting energy companies off investing in the UK, are kept happy.

‘We’re going all out for shale,’ Cameron will say today. ‘It will mean more jobs and opportunities for people, and economic security for our country.’ 74,000 jobs, to be exact, as well as investment of £3.7bn (according to research by the Institute of Directors). Taken that way, you can understand why Cameron is so keen to persuade the middle classes that fracking is the future.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Ranked: Britain's best-run companies

These are the businesses rated top by their peers for their quality of management.

Unconscious bias in action

Would you dislike someone just because they’re from the Forest of Dean?

I ran Iceland's central bank in 2009. Here's what I learned about crisis ...

And you thought your turnaround was tricky.

"It's easy to write a cheque you don't have to cash for 30 ...

But BP's new CEO has staked his legacy on going green.

AI opens up an ethical minefield for businesses

There will inevitably be unintended consequences from blindly adopting new technology.

The strange curse of No 11 Downing Street

As Sajid Javid has just discovered, “chancellors come and go… the Treasury endures forever”.