The UK’s Chancellor of the Exchequer, George Osborne is to cut the tax on shale production in the UK to 30 per cent, making the country the world’s most hospitable tax regime for shale gas.

It is a substantial drop from the 62 per cent paid by most of the oil and gas industry, as the UK looks to emulate the success of the US where “fracking” has produced a glut of natural gas and pushed down the price to the benefit of households and industry.

Osborne

The Treasury is also to insist that energy companies provide at least £100,000 of community benefits for each well drilled by the industry.

Osborne believes that shale gas has “huge potential” to broaden the UK’s energy mix and keep energy bills low, while Michael Fallon, energy minister, told parliament on Thursday that oil and gas are “a vital part of our economy, and is going to remain so for decades to come, even as we move to a low-carbon economy.”

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