Liz Truss decision to lift ban on fracking could cause friction between UK and Welsh Government

Liz Truss’ announcement today that she is scrapping the ban on fracking could cause friction between the UK and Welsh governments.

There has been a moratorium on fracking in Wales since 2015. Licensing powers transferred to Wales in 2018, and at COP26 the Welsh Government signed up to the Beyond Oil & Gas Alliance to reject fracking or any new hydrocarbon developments.

However, the then Minister of State for Business, Energy and Clean Growth, Greg Hands, hinted in March that the UK Government may not respect the Welsh Government’s opinion on the matter if the ban on fracking was lifted.

He was asked by Liz Saville Roberts in the House of Commons whether the UK Government would “assure me that he will respect Wales’s opposition to fracking, honour our COP26 pledges and not give in to climate deniers and fossil fuel opportunists?”

Greg Hands answered that “I remind the right honourable lady that energy is reserved”.

He did however note that “local community support” was important, but made no mention of support or opposition from the Welsh Government.

Liz Truss is tipped to today follow through on her leadership vow to end opposition to shale gas extraction in places where it is backed by local communities.

Meanwhile, the new PM will also confirm she is scrapping green levies on energy bills and declare her support for more North Sea drilling, The Daily Telegraph said.

‘Not charities’

UK Labour meanwhile have pointed to prior comments from then-business secretary Kwasi Kwarteng arguing that those calling for the return of onshore fracking “misunderstand the situation we find ourselves in”.

In March, Mr Kwarteng – now Chancellor – wrote in The Mail on Sunday: “Even if we lifted the fracking moratorium tomorrow, it would take up to a decade to extract sufficient volumes – and it would come at a high cost for communities and our precious countryside.

“No amount of shale gas from hundreds of wells dotted across rural England would be enough to lower the European price any time soon.

“And with the best will in the world, private companies are not going to sell the shale gas they produce to UK consumers below the market price. They are not charities, after all.”

Labour has also accused the PM of writing a “blank cheque” to oil and gas giants by ruling out a windfall tax to pay for the cost-of-living package, with the British people left to “foot the bill”.

‘Action’

Ahead of Thursday’s announcement, Ms Truss acknowledged families and businesses across the country are concerned about how they will “make ends meet” over the coming months.

She blamed rising global prices on Russian president Vladimir Putin’s war in Ukraine and “weaponisation” of gas supply in Europe.

“This has only made clearer that we must boost our long-term energy security and supply,” she said.

“We will take action immediately to help people and businesses with bills but also take decisive action to tackle the root cause of these problems, so that we are not in this position again.

“We will set out our plans to deliver on that promise and build a prosperous Britain for everyone.”

Downing Street said the new PM would set out a “bold plan of action to support people across the UK” while also “ramping up domestic energy supply”.

Going head-to-head with Sir Keir Starmer at her first Prime Minister’s Questions, Ms Truss confirmed she would make an announcement on her cost-of-living proposals to the House on Thursday.

However, she faced accusations she was dodging scrutiny over the way her plans would be presented to Parliament.

She will open a debate on energy costs but, unlike a formal ministerial statement, this will not result in sustained questioning from MPs about the move.

‘Windfall tax’

Labour said the “only fair” answer to the crisis is its own proposal to freeze bills, valued by the party at £29 billion.

Shadow climate change secretary Ed Miliband argued that “core” to any solution is the question of “who pays”.

“By ruling out a windfall tax, Liz Truss, in one of her first acts as Prime Minister, has written a blank cheque to the oil and gas giants making £170 billion in excess profits, and the British people will foot the bill,” he said.

“Every penny her Government refuses to raise in windfall taxes is money that they will be loading onto the British people for years to come.”

The Times also reported that ministers are planning a public information campaign to encourage people to reduce their energy use this winter, in case freezing prices removes the incentive to cut consumption.