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London – Fiscal Policy Promotes Shale Gas

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London at the forefront in taxation

The United Kingdom is definitely the champion of taxation; indeed many of its islands, particularly the Virgin Islands or Gibraltar, have extremely competitive tax rates in comparison with other European standards. While its European partners are wondering about the mechanisms of international tax cooperation, London continues to develop its competitive edge by using taxation as a competitive fiscal factor that the British intend to exploit to the hilt.

The Prime Minister David Cameron not only seeks to recover the tax refugees from the 75% “made by Holland”; the chancellor also wants to offer the lowest tax rates for energy produced by shale gas (extracted by hydraulic fracturing of the subsurface rocks); and he calls for a tax rate of 30% in contrast with 62% for oil.  “The others will only have to get used to it” speaking of London’s aggressive stance re: tax competitiveness. In response to the concerns of the local communities; operating companies are expected to pay £100,000 for each new well and 1% of the generated revenue.

 

The effects of Shale Gas on the environment

Certain environmental actors, such as Greenpeace and Friends of the Earth, find London’s discourse somewhat dichotomous. On one hand, it demonstrates a political willingness to preserve the environment, with policy making in that sense, while on the other hand, it actually endorses technologies that are harmful to the environment; such as the extraction of shale gas. They also stipulate that priority should be given to renewable energies. This is already the case in many countries FRANCE; UNITED STATES; BRAZIL; but even if London does not have extensive oil or gas reserves; it’s still rather lucky in the energy field, according to Nick Butler.

An ace in the hole

In effect, shale gas reserves are proving to be more plentiful than initially estimated and could possibly double in volume. In this respect, and considering the economic crisis in Europe, any new source of income for the constituent states is encouraged. London’s decision is, therefore, fully justified. Only the means are the issue and London has naturally substantial means in terms of energy.

 

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