George Osborne reaffirmed his support for the shale gas industry in the Autumn Statement in an effort to push down energy prices and make the UK's tax regime for the industry the most competitive in Europe.
The statement included a tax allowance, which had been under consultation, intended to give a boost to the exploitation of onshore oil and gas in the UK.
The allowance is based on offshore field allowances and will reduce the tax rate on a portion of a company's profits from 62% to 30% at current rates. Companies will receive an allowance equal to 75% of their capital spend on such projects.
When announcing the consultation in July, Osborne said: ‘We want to create the right conditions for industry to explore and unlock that potential in a way that allows communities to share in the benefits. This new tax regime, which I want to make the most generous for shale in the world, will contribute to that.’
Osborne continued: 'I want Britain to be a leader of the shale gas revolution – because it has the potential to create thousands of jobs and keep energy bills low for millions of people.'