RULING Labour councillors in York are to discuss the Prime Minister’s announcement that local authorities will be able to keep millions of pounds in tax revenue from “fracking” projects.

York council leader James Alexander said David Cameron’s offer, reported in The Press yesterday, may “feel like a bribe” and he was sure there would be concerns from residents about fracking of shale gas near their homes.

“Whilst I have personal concerns, the Labour group will discuss our policy towards fracking in light of the Prime Minister’s announcement,” he said.

“There has been little interest in companies exploring for fracking within York until recently. York currently provides £40 million extra in business to London than we receive back and we were promised greater shares of business rates before that didn’t materialise.”

Mr Cameron said local authorities in England would receive 100 per cent of the business rates collected from shale gas schemes, rather than the usual 50 per cent, but environmentalists branded the incentive a “bribe” and warned that it raised serious concerns over conflicts of interest, if the councils benefiting from the money were the ones deciding on planning applications.

Linda Cowling, the Tory leader of Ryedale District Council, said she was not really interested in how much money fracking would generate. “What I really need to know is whether it is damaging to the environment,” she said.

Selby Tory council leader Mark Crane said he wanted to know whether district or county councils would determine shale gas applications and also which authorities would benefit from extra tax revenue. He said he also wanted to see fracking tested somewhere away from homes, and would like to know the views of Selby area residents.

The campaign group Frack Free North Yorkshire said: “North Yorkshire has a booming tourism industry and a world-class agriculture industry. Fracking has been proven in the USA and Australia to have a very negative effect on both these sectors.”

A spokesman for East Riding of Yorkshire Council said the authority did not know enough in detail about the Government’s proposals to be able to comment. “Any application made for ‘fracking’ in the East Riding would be subject to the normal planning process,” he added.