Plans to increase shale gas supplies by ending the moratorium on fracking are not a “miracle solution”, the communities secretary has conceded, before plans to curb spiralling energy bills this winter are announced.
Simon Clarke said the government had to be pragmatic but added that community consent would “lie at the heart of our energy policy”.
He defended the decision not to bring in a further windfall tax on oil and gas companies to pay for the long-awaited package, to be announced later on Thursday morning by Liz Truss.
The Guardian understands an immediate lifting of the ban on fracking for shale gas will be ordered when the prime minister makes her announcement.
In a major shift in tone from the Boris Johnson administration, Clarke also told people to be “disciplined” about their energy use this winter, saying the public can play a part “in helping to keep energy prices low and conserve our energy supplies”.
The support package to prevent millions of people from falling into destitution due to the energy price cap rise in October is estimated to cost the taxpayer £130bn, as Truss grapples with the worsening cost of living crisis.
Clarke refused to pre-empt her announcement, but said fracking was “something the PM will be talking about in her statement today”.
Kwasi Kwarteng, now chancellor, said months ago when he was business secretary in the previous government that fracking would “take years of exploration and development before commercial quantities of gas could be produced for the market, and would certainly have no effect on prices in the near term”.
Clarke said it was “absolutely right to say that this on its own won’t transform the economics of energy” but insisted it was not true that ending the fracking moratorium would make no difference to gas prices.
He told BBC Radio 4’s Today programme: “There’s a middle ground here, where we can be realistic that taking more gas from all sources is a sensible thing to do if there is community consent. But we’re not going to have miracle solutions to the challenges we face.”
Clarke added that “we need gas from all sources as part of our transition towards net zero” and blamed the Russian president, Vladimir Putin, for trying to “weaponise” energy to “break the resolve of the west”.
Defending the decision not to impose a further windfall tax on offshore oil and gas companies, despite them reporting huge profits, Clarke said they already pay “their fair share of tax” and that imposing a further levy would curb investment and growth.
He promised the package to be announced by Truss would provide “comfort and clarity”.
Martin Lewis, who runs the Money Saving Expert website, said there now appeared to be the “political will” to tackle the issue of spiralling energy bills and described this as a “radical shift in policy” from Johnson’s administration.
He said the reported plans were not perfect, but that he had not seen any solution which was, adding that tens of millions of people would “breathe a sigh of relief”.
Clarification was needed from the government about whether extra payments for those in receipt of benefits and with disabilities were going to come through, Lewis said, adding that the universal payment of £400 – if not put in place again next winter – would still mean a “subtle step-up” for households in 2023.
Lewis also called for anyone who switched to a fixed-term rate because of the previous lack of help to be allowed to stick to the “state-subsidised energy tariff” without facing exit penalties.
Ed Miliband, the shadow business secretary, said the refusal to levy a windfall tax on energy companies’ excess profits had been made “purely on the basis of dogma”.
He added: “This investment argument is completely bogus, that it would have a damaging effect on business.”
Long-term, fixed-price contracts would “lock in” massive profits for energy companies for years to come, Miliband said.
