The Government has unveiled incentives to get local councils fracking by promising them 100% of their business rates – double the current limit – worth many millions to local communities up and down the country.
Fracking is a controversial practice that has been developed to retrieve shale gas. The Government believes it could be worth as much as £3.7bn to the UK economy, supporting 74,000 jobs. But many argue the method – which involves injecting liquid at high pressure underground to fracture rocks and release gas - has dangerous environmental consequences, including possible effects on health.
So what does all this have to do with the high street? Well 10 Downing Street this morning revealed its plans to encourage councils to get behind fracking, offering “millions of pounds in business rates” to those that give it the green light.
According to the Government this could be worth up to £1.7m a year “for a typical site” and will be directly funded by central government.
Local communities will also receive £100,000 when a test well is fracked – and a further 1% of revenues if shale gas is discovered. This could be worth £5m to £10m for a typical producing site over its lifetime.
But by doing this the Government merely highlights how it is withholding the money it should be ploughing back into local communities.
Councils that have invested and developed a thriving high street that can generate strong revenues from business rates should not have them withheld because they refuse to back a scheme the environmental impact of which is at best unproven.
The two have very little connection – in fact it could be argued that an area suitable for fracking must be the polar opposite of a thriving commercial zone – so it is wrong to conflate the two, particularly at a time when council budgets are being cut and authorities are in desperate need of cash. Some campaigners have already said the move constitutes a bribe, and I’m inclined to agree.
The principle of financial incentives is a good one, but the government is wrong to hold councils over a barrel in this way, especially when the money is coming from communities and businesses who could be the very ones to lose out.