UK Proposes "Generous" Tax Breaks for Shale

British Chancellor for the Exchequer George Osborne has said that the British Treasury is consulting on "generous" new tax breaks for shale gas in a bid to open up the country's shale gas reserves.

Speaking at a party conference, the Chancellor said that there was a danger that the UK would be left behind on shale gas and said that the discussed tax breaks aimed to combat that possibility.

"An enterprise strategy means investing in renewable energy, and opening up the newly discovered shale gas reserves beneath our land," he told the assembled Tories at the conference. "We are today consulting on a generous new tax regime for shale so that Britain is not left behind as gas prices tumble on the other side of the Atlantic."

However, the minister's positive view of the unconventional resource is in contrast to a more reserved approach by Energy Minister Ed Davey, who yesterday said that he wished to be patient on the exploitation of shale gas.

Though Minister Davey said that he hoped that he could approve the production of shale gas in the future, he wished to see all evidence before green-lighting the resource.

"In principle, I’m all in favour of exploiting new resources,"he told the audience at a Gastech conference yesterday. "I would welcome as much as anyone a way to boost Britain's indigenous gas supplies and to reduce energy prices to consumers and businesses alike. But I make no apology for being a little more patient than those excited commentators. I want to base our approach on the evidence, as we do for all fuel sources...

"Questions about regulatory oversight and the involvement of local communities need to be answered rather than simply dismissed."

The tax break proposal has already found criticism from environmental groups. Today, head of Greenpeace's energy and climate change division, Jim Footner, said that the Chancellor for the Exchequer needed to stop appeasing the gas industry and instead focus on renewable energy.

"Osborne needs to stop giving handouts to his mates in the gas industry and instead back his Lib Dem coalition partners and the CBI by supporting investment in renewable technologies that will help stabilise bills, reduce our reliance on energy imports and boost the economy," he said.