In his speech at the Conservative Party conference yesterday Chancellor, George Osborne, announced that the Government is consulting on a “generous new tax regime for shale gas, so that Britain is not left behind as gas prices tumble on the other side of the Atlantic.”
A statement from the Treasury confirmed that the aim of the targeted tax regime is to help unlock investment and encourage shale gas production. The consultation on the new tax regime will involve “engagement with industry” to ensure that the tax regime is appropriately targeted rather than a formal consultation.
The Chancellor’s latest announcement reinforces his earlier announcements to increase the number of gas-fired power stations on the grid which has been described as the Government’s “dash for gas”.
During his speech the Chancellor expressed his enthusiasm for “opening up the newly discovered shale gas reserves beneath our land”. This is leading widespread speculation that hydraulic fracturing in the UK will be allowed to restart, bringing the current suspension of activities to an end. It is also a further indication of a pro-shale approach to shale gas within the Government.