Updated: Local people should have greater say in decisions – Government response on shale wealth fund

171109 KM Eddie Thornton

Third Energy’s KM8 site, 9 November 2017. Photo: Eddie Thornton

Updated 13 November 2017 with reaction to the shale wealth fund proposals

Communities should have greater control of the decisions that affect them, the government said today in its response to a consultation on the proposed shale wealth fund.

The response, compiled by the Treasury, said:

“The government believes in empowering local people, and wants to see communities and individuals have greater control of the decisions, assets, and services which affect them.

“The government believes that local people are best placed to understand the needs of their own communities. We also believe that local people should benefit first from decisions that affect them and that they should benefit from the proceeds of economic growth.”

The document does not propose giving people greater powers to decide whether shale gas developments should be allowed in their local area.

But it says local communities will decide how money in the shale wealth fund is spent.

The publication comes as Third Energy is waiting for the final go ahead to frack its site at Kirby Misperton in North Yorkshire.

The proposed fund would be drawn from 10% of any tax revenue arising from shale gas production.

The government has estimated that it could provide £1bn across UK shale gas areas over 25 years. But it conceded:

“The deployment of the Shale Wealth Fund depends both on production and the profitability of the industry, which will determine the level of tax that can be attributed to shale production and, therefore the Shale Wealth Fund.”

Today’s document comes more than a year after the closing date of a public consultation on the fund. The Treasury sets out what it thinks should be the principles:

  • Local communities will decide how money is spent, and the next steps for developing the details of how that process will operate
  • The fund should be administered in a transparent manner, and any administrative body ought to represent the views of the local community and be accountable to them
  • The fund could make payments to households, to be decided by communities
  • It should meet local needs and maximise benefits to local communities

The document suggests that the fund could improve access to public services and contribute to the local economy by providing training or improving infrastructures. It could invest in the local natural environment. It could also provide funding for community groups and the development of community assets, such as libraries and sports facilities.

But the Treasury says the fund should be additional to existing local government funding.

It says the fund should also be separate from the industry-operated community benefit scheme, which pays £100,000 per shale gas well site and 1% of production revenue.

The document does not define local community or propose how to decide which residents should benefit.

171009 km8 keith taylor

Keith Taylor, visiting objectors to the Kirby Misperton site last month. Photo: Keith Taylor

The Green Party MEP, Keith Taylor, said this morning:

“The Government has the temerity to claim the ‘wealth fund’ will ’empower’ the very communities who have had their local democratic opposition to fracking ridden roughshod over.

“Kickbacks won’t keep catastrophic climate change at bay and nor will they succeed in dividing and conquering communities united in their opposition to this environmentally destructive and dangerous process.”

“If the Tories were serious about financing community projects they would ditch their ideological attachment to a failed austerity project and take urgent action on a tax avoidance crisis that costs taxpayers’ around £11 billion a year.”

More reaction

Tim Thornton, retired GP from Ryedale

“When I use a word,” Humpty Dumpty said, in rather a scornful tone, “it means just what I choose it to mean—neither more nor less.”

“Communities – does that include a lone farmhouse, schoolchildren living further afield but exposed to air pollution, visitors like those at Flamingo Land, or the owners of the huge theme park? How near or far will the community be? There is usually a vagueness about community that might poison the benefits.

“Sites approved for clean extraction – what if, as we suspect, the extraction is neither safe nor clean? Disqualified by falling outside the qualifying requirements?

“Shale gas – I thought this bit was easy but…for years we believed our local well at kirby Misperton was drilled down to the shale so that they could extract shale gas from the shale layer. Indeed our driller John Dewar thought so too when I asked him as did his operations manager. His geologist however, insisted they were fracking ‘tight sand’, not shale. Never had I heard that time in all the discussions and debates in the District Council or County Council etc. Shale it seems is not a homogenous rock but contains areas of sand and other formations. By specifying ‘tight sand’ it may be interpreted as being a conventional source of gas and therefore sits outside the regulations governing fracking.

“It’s so tricky and fraught with confusion – perhaps deliberate. Don’t think your £150 – £2,000 is guaranteed. And don’t forget to compare your winnings with the  devaluation of your home by 10-20% and any other impacts you or your children and grandchildren may sustain.

“Just say No.”

No Fracking in Balcombe Society

The Treasury suggests that communities who accept shale drilling may be entitled to ‘up to 10% of tax revenues arising from shale gas production’.  A total give-away of £1 billion is mooted.

But that supposes that gas drillers will produce commercial quantities of gas, and manage to sell it at a profit, and will actually pay taxes – which is by no means sure, given the current gas glut worldwide, and the high costs of fracking shale.

Unlike the free-flowing wells of old, shale gas wells will flow only from the fractured sections of rock, so a very large number of wells would be drilled to extract shale gas across the North and Midlands.

The same goes for oil wells in the South East, where oil companies for the time being claim that they intend to acidise, not to frack.

Fracking will bring yet more air pollution, volumes of toxic waste and massive stress to communities across Britain. If the government thinks communities will roll over and sell their countryside and health, they are wrong.

Louise Somerville, Frack Free Somerset

“No amount of bribe money can clean our drinking water, no amount of bribe money can make polluted air safe to breathe, no amount of bribe money can protect us from the irreversible damage of fracking.  There is an extremely powerful and successful anti-fracking movement in the UK.  We’ve stopped this toxic industry from making any money for the last six years and we intend to continue. We will win our fight for a cleaner safer future.”

Professor Peter Strachan, Robert Gordon University

“No amount of cash can compensate for the environmental damage and diminishing quality of life that onshore #Fracking will bring to English communities.”

Who contributed to the consultation?

respondents breakdown

The consultation received 170 contributions, of which 115 were from individuals who were not identified in the response document.

Of the remaining 55, eight were from industry, eight from campaign groups and eight from funders/grant recipients. 27 local authorities responded, including councils in areas responsible for areas near active or proposed shale gas sites. Some contributions were from regions which have no exploration licences or are not considered to have shale gas prospects.

43 replies »

  1. GBK-facts always do. Lot’s of chatter about what might be (ie, speculation) but when it comes down to it and the first money is available to the locals, and most accept it, they can’t deal with it. Remember, these same householders have further payments to come from Cuadrilla. It was them who requested direct payment. What is rejected just goes into the community fund. Any national taxation scheme is a long way off but could be a considerable extra community fund.
    FOE may have to redraw their property value poster. Will be like how estate agents view valuations within desired school catchment areas and set an automatic price premium! Good luck to them-some compensation for any negative value that Sellafield may have placed on their properties.

    • Martin,
      All ‘national taxation’ is ‘community fund’; apart from that which is siphoned off without permission into unwanted schemes.

      Why stop at fracking? Why not have a scheme for private health care to put back some of the profits they are making from the NHS which are reducing people’s services elsewhere?

      You cannot tax what you cannot get access to. There are billions of £s stuck offshore than need to be brought back to truly help all communities.

      Community ‘schemes’ should not be to bribe people to accept another dirty fossil fuel industry. What is more ridiculous is suggesting any monies go to the very things the residents already have, which will be systematically destroyed by this dirty industry.

      It’s so sad that by betting on ‘sad Ken’ residents will ultimately be lucky to get even 7p off ‘Harry the Bastard’. (Maybe that’s why they’ve taken the money?).

      “Would you like to pay tax?”
      “Course I wouldn’t” (pause) “What a ridiculous question”…………..

  2. Seem to be getting bogged down a bit by tax. I bets you all use Amazon or Google or Facebook?
    I’m all up for taxation at source but the problem is countries are competing for a slice of the cake and there will always be backdoor deals. Only the US has regulators that have top people in them, they pay substantial salaries to attract the right talent so it will really take the US to lead the charge.
    The whole tax avoidance thing has distorted everything in this country including the value of commercial property. I’d love to see more independent coffee shops but it’s impossible at the moment due to the rent being charged. So we are stuck with these large tax dodging firms that are able to build huge levels of debt in the meantime.
    Even although I’m a capitalist I do believe the system has been so abused that it’s far time we reign it in. I think a joint venture between the UK and US would be needed to start the ball rolling.
    It’s a pity the Royal family didn’t take more ownership of what is morally iffy. Whilst they might not have cost the revenue any money as such the reason I’ve found most people and companies want to be offshore is to be able to conduct anonymous dodgy deals, and that ain’t good for any of us. I’d much rather a robustly regulated capitalist system than socialism/communism.
    So I’m more in line with the antis on this issue as a whole.

    • So pleased we can finally see a common ground.

      It’s not about who or what you use GBK, it’s the system. You cannot be robustly regulated, people have to choose for themselves based on education and experience, not propaganda.

      There is nothing wrong with ‘profit’ it’s what business owners and entrepreneurs take for putting in hours and hours of ‘unpaid’ work to get a business going or maintain it. Profits in ethical companies are put back into making a fair environment for all, back into the system that educates and provides health care for the workers via taxation; not siphoned off shore.

      There is nothing wrong with investment provided it does not ‘control’ the business and constantly strips assets and people to make fictitious ‘paper’ profits, leaving those who have given their time for the company in return for a chance to live a life with choice, consigned to the scrap heap; those parasites driving the destruction clocking up ever more numbers on a computer in a ‘tax haven’ – the very name of which send shudders of disgust down my spine.

      This off shore money does not belong to the individuals whose ID is on the account. It belongs to those who get up every day and turn up for work to generate this income in the first place.

      The sooner we move away from this ‘success criteria’ of big house paid for by job which you can only get if only you pay thousands for a piece of paper that says you’re smart (not often the case), driving a polluting car or ten and looking like a fragrance poster model, we can get on with being who we really are.

      You can give it a political name (some seem not to cope without these labels) but I call it living and caring for where you live, sharing resources and being human.

      • I appreciate what you’re saying and understand it entirely however, you unfortunately have too much faith in the human race.
        I will advocate that regulation is 100% required or we will just keep going around in circles.
        Gordon Brown put his faith in humans in the form of bankers and look where we ended up.
        There is always someone that wants to get the upper hand the quick and easy way which generally means shafting someone else.
        Anyway we’re on the same page as to people and tax.

        • Are bankers human? 🙂

          There are all sorts of psychologies about ‘people’ and how they are genetically made or influenced. Systems make people. We are all human.

          We need to choose for ourselves. Taking this away devoids us of responsibility. Choices have consequences. Once we embrace this, the rest is easy. Control choices and you just get a negative push against the ‘rule’, cast your mind back to school and it’s one size fits all culture. How many rules were bent or broken? Moving into adult life, how many now?

          It’s not an easy option, but no one said being human was meant to be easy; true freedom is a wonderful feeling, but comes with enormous responsibilities.

  3. Monday 13th November 2017 is the official…. WORLD KINDNESS DAY .

    Today I call a truce…. I wish all contributors to the forum, especially my regular ( arguing ) sparring partners .


    ( Business as usual tomorrow )

    Regards , Jackthelad

  4. Meanwhile, anyone with a windfall will plonk £40k (couple) into an ISA/year. (£200k over 5 years, so not small change.) Why? To avoid paying tax. And most couples will utilise the transferrable allowance if one is below the tax threshold. Why? To avoid paying tax. And if they pop out of the country, they will top up on Duty Free. Why? To avoid paying tax. Not only legal, but positively recommended.

    Tax planning is quite normal, and legal, for the majority of the population. “Avoidance” is conflated with evasion deliberately. When it moves into tax evasion it is illegal and should be dealt with appropriately. If Donald gets his tax reforms through some of the big money will disappear back to USA and some may then realise that when the system is simplified it becomes much more transparent and manageable.

    But that has been known for a very long time. The big improvement recently is that HMRC can access most of these off-shore accounts to check for compliance and have made real progress as a result. Yes, you can tax what is off-shore Sherwulfe, HMRC have a whole department doing just that with great success-if tax is due. Tax may only be due when income is paid back into UK, such as with many pension funds, but the Shadow Chancellor will know more about that than me. Public registers are a nonsense, as the last week has proven. You put perfectly legitimate transactions into the public domain and 99.9% do not have a clue what it means and are led where the media want to take them eg. if you have shares in a legitimate company but there are other shareholders who are dodgy then you are dodgy too??!!

    Information can now be sent around the world in a fraction of a second. So can money. There will always be havens for dodgy money, as a result. But many of the existing, so called havens, are managing funds that are perfectly legitimate. Confusing the two is a repeat process for the media, but each time they repeat the process they have less to “expose” so they shout louder.

    Sounds familiar?

    • You raise some interesting and valid points Martin and that’s me agreeing with you, not just my “Kindness” showing though .

      It always has and always will be a case of the rich making laws for the rich, as they hold the real strings of power.
      Isn’t it true that you need so many £millions to be considered for some of these cash havens ?

  5. I suspect you are correct Jack, that some “havens”, with some categories, will have limits regarding amounts, if they are particularly aimed for that sector. But, that is the case with many things around the world. I remember talking to people who had moved to New Zealand a few years ago and entry to allow that had great financial restrictions applied.

    Equally, many of the funds operating in the “havens” can contain investments from major pension funds, operating on behalf of millions of people in the UK, most of them being far from rich. I suspect you will find funds from many Trade Unions and certainly Councils run by Labour or Tory. And for Marxist Shadow Chancellors.

    I have a great liking of the British Virgin Islands and find their current plight shocking. I can’t quite see the benefit of removing their major source of income whilst it seems to be perfectly legitimate. Back to sugar plantations? Yes, I know it is “shocking” to see discussions about business use v private use if personal jets are mentioned, but this has been an issue with Company Cars for decades. The media can have great fun with one, but the other is an annual conversation which is better understood, so they leave it alone.

  6. Fracking bribes! Government has ignored the views of communities in this consultation, has not even included many of them in their count of respondents. Communities and local individuals told this government consultation where they could stick their fracking bribes – but government was not listening.

    There is no mention of local dissent in the Treasury’s report on the consultation The consultation asked HOW such a fund should be distributed, not WHETHER it should be distributed.Unless you agreed with the bribes, the only way to answer each one of the questions was to say that it should not happen – neither the fracking nor the fracking bribery.

    The last pages of the report list organisations who responded, but ‘Please note,’ says the heading, ‘where submissions did not provide evidence or answer any of the questions in the consultation, we have counted these as enquiries and not formal responses.’

    So, telling government to ‘frack off’, even ever so politely, does not count as a response.

    Weird that this response was released just after midnight on Saturday morning. Was this an attempt to get it to the media but not to communities and individuals who might not have commented? I did not see it until Sunday night.

    The report promises ‘real local decision making’ yet it gags local voices.

    The Treasury suggests that communities who accept shale drilling may be entitled to ‘up to 10% of tax revenues arising from shale gas production’. A total give-away of £1 billion is mooted.

    But that supposes that gas drillers will produce commercial quantities of gas, and manage to sell it at a profit, and will actually pay taxes – which is by no means sure, given the current gas glut worldwide, and the high costs of fracking shale. Meanwhile, the foolish invest in a ponzi scheme.

    Unlike the free-flowing wells of old, shale gas wells will flow only from the fractured sections of rock, so a very large number of wells would be drilled to extract shale gas across the North and Midlands.

    The same goes for oil wells in the South East, where oil companies for the time being claim that they intend to acidise, not to frack.

    Fracking will bring yet more air pollution, volumes of toxic waste and massive stress to communities across Britain. If the government thinks communities will roll over and sell their countryside and health, they are wrong.

    Pathetic how the government has woven ‘safe and clean fracking’ into its PR first line. Seems to come out of the same writing class as ‘strong and stable’, and we know where that got them.

    Circumstances (and communities) will conspire so that they make no profits and the government gets no taxes and these filthy bullies will frack off from our lives.

    And/or Jeremy Corbyn and Gato will move in with Larry and get it sorted.

    Ah, ISAs. Can’t be doing with them. Hard to find truly ethical ones, hard to find one that will guarantee zero investment in hydrocarbons. Same goes for pensions.

  7. Anyone would think the good people around PNR had rejected the initial payouts, rather than saying “give it to us locals”.

    The differences between speculation and reality were always going to be exposed as matters progressed. That’s what happens in all these situations. Thousands of people now drive daily along the Newbury bypass, many can not remember the conflict and confusion that happened at the time, and most who do, think “that was an awful lot about nothing.”

    Not hard at all to find ethical investments K. Problem is the returns they give. Most funds give the majority of their returns through dividend payments, fossil fuel companies have a good history of that. The antis have not explained to the pensioners yet how they will afford dearer alternative energy when their pension income they enjoyed from these dividends will be done away with! But, that is the conflict within anti capitalism. Any alternative looks much worse. (You could always invest in Tesla!!)

    • So funny Martin, not.
      How about family looking after each other instead of individualizing, separating and isolating? Then no need for pension ‘funds’.Forget money returns and work on returning; put into ‘us’ instead of ‘them’. You may find, that like small farming produces bigger yields per acre, small family and friend yields not only security and shelter, but emotional support. That way the layers of parasites wont take your cash to buy more planes, boats and automobiles (tax free of course).
      Happy Kindness day to all. Let’s do it, not just say it!

  8. If you take everything into consideration, that ‘dearer’ is open to long, long debate. The old fossils are ultimately going to have cost us so much. And they get so much subsidy from governments. We should pay more for our energy, and our food, so that we value and conserve them. We should give everyone base-line domestic energy, and charge heavily for anything more. Somehow people have to take responsibility for not wasting energy. And using every scrap of food. We need to change the way the economy works.

    Revolution time…

    ‘Tis true, pensioners can be mean and selfish. I have one in the family who told me the other night over dinner he won’t be here, so why should he care what happens in the future. So you don’t care about your grandchilden? No, I don’t. I had to work hard for what I’ve got, I had to make do with what was available. They’ll have to do the same!

    I didn’t sleep all night.

  9. So, K, your argument is about the capitalist system. That’s perfectly understandable as most of the antis now seem to fit that mould, but being anti capitalism and then needing to change the system to fit your agenda is a lot different to objecting against fossil fuels. I think you will find that a little harder than campaigning against fossil fuels.

    I do not know the context of your family members comments, but there are plenty of examples where some of the older generation feel some of the younger generation should be forced to be more self reliant, and that has a lot going for it, but it does depend on the context.

  10. Fine Sherwulfe. There is always a choice to live a collective lifestyle, and a few do. However, most wish to be independent and, if they can achieve it, to support that independence themselves. That is not the same as being selfish. Many who make plans for pensions and control unwarranted taxation do not spend the money on fast horses and slow women, or vice verca, but do indeed support their families and friends that way. Living in a cave becomes difficult as the arthritis sets in, the mammoth dung becomes a shrinking resource to keep warm at night and even Baldrick get’s fed up with a continuous turnip diet. Good luck to those who want that, but don’t think the majority do, and will not put up with it being imposed.
    That’s why the locals at PNR have accepted the funds and will not expect others to tell them whether they should or should not. If those others want to, they can always make those householders offers to purchase their properties, move in and then make their own choice to refuse the payments. An expensive, empty gesture, but what they want others to do on their behalf.

    Meanwhile, Ineos has just showed how serious they are about community support and bought themselves a football club! (But not in Scotland!) I will watch with interest the obvious reaction to that, but be careful, there is a direct precedence to this that would caution against that.

    • Lovely turnips in my garden at the moment, Martin (and the leaves are delicious, learnt to eat them in Portugal, nabiças, try them – ah, but they get chucked before they get to you). I’m picking leeks, salad, groundcress, pak choi, chard, celery, radishes (with leaves for soup), black kale, broccoli, bottled green beans, tomatoes, plums, stored apples, squashes, dried beans, potatoes, chickens making dung. Yum. Organic.All half a mile downwind from Cuadrilla’s proposed flare. I hate Cuadrilla and their ilk with a loathing you cannot imagine. I feel violated by their threatened presence along our road, by the hole they have already drilled. Sorry if that sounds emotional. It is, and rightly so, This is our countryside and we do not want them here. Nor do we want them anywhere else.

      I see you sitting in some city, buying your veggies I imagine in plastic wrappers. There is almost nothing these days I am prepared to buy in a supermarket… It’s fun, tho, talking to the staff (and emailing their bosses)… about all that excess plastic. You can’t go on in this way, you must know that, but you are right, people need to understand it and want it, the change that has to come. Apparently after the Fukushima disaster, the Japanese pulled together and conserved energy. But then in Japan there is ingrained collective spirit. We need that, somehow. You know, I think in a way in Balcombe we’ve got it because of Cuadrilla. That is the only great thing they did for us – unite us against them. Those grandchildren are self-sufficient, by the way, one nurse, one TV producer, one working in renewables!

    • Martin,

      What is proposed is the sharing of resources and stopping the exploitation and disenfranchisement of others to line the pockets of those who prefer to control from a distance skimming off monies that should be invested in people not more planes via tax havens.

      The sad truth is the exploitation of resources puts many on the planet in that ‘cave’ living with ‘arthritis’ with no money for medicines to ease their pain, that’s if they had a hospital which was not blown up by ‘friendly fire’.

      Oh, and when the ‘fossil’ dung becomes a shrinking resource to keep warm at night and even Baldrick get’s fed up with a continuous fat bas*£rd diet, good luck to those who want that, but don’t think the majority do, and will not put up with it being imposed.

      Better to role up your sleeves and offer your expertise to a company instead of milking the profits.

      So, maybe you just stick to ‘Sad Ken’ and I’ll keep selling wind turbines from beneath a smoke screen of secret investments.

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