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Energy Booster

Michael Fallon’s schedule would be enough to make any minister feel exhausted. Fortunately, he is a limitless source of energy

 

WORDS BY PAUL WAUGH, PICTURES BY PAUL HEARTFIELD

 

Michael Fallon opens his desk drawer to reveal the secret weapon in his daily drive for ministerial efficiency: a private stash of muesli bars and energy snacks. The blood sugar boosters may look like elevenses or teatime treats, but it turns out they are Fallon’s only meal during working hours. “There’s no time for lunch,” he declares breezily. Given the seemingly endless list of his duties in both the Department for Energy and Climate Change (DECC) and the Department for Business, Innovation and Skills (BIS), it’s no surprise that the minister is so hard-pressed.

But as a Thatcherite who cut his political teeth in the 1980s (he’s one of the very few ministers in this Government who was also an appointee of Mrs T), it’s clear that the ‘lunch-is-for-wimps’ motto is both a badge of pride and a statement of intent.

Brought in as a BIS minister last year, Fallon’s no-nonsense approach and Stakhanovite work rate impressed the Prime Minister so much that he gave him the extra job of Minister of State for Energy this spring.

With the run-up to the next election focused on policy implementation, he knows he’s been installed as Mr Delivery and has little time, literally, for anything that gets in the way.

“There’s a lot of work and I run between BIS and DECC,” he says. “It means you just have to focus on what’s essential… I’ve shortened meetings.. there’s no need to have hour long meetings.”

“I’m the Small Business Minister, I deal with deregulation, access to bank finance. I’m the Aerospace Minister. I’m the Industry Minister: automotive, construction, retail, electronics, all the main sectors. I deal with Regional Growth Fund, Local Enterprise Partnerships. Outside London, I’ve been to every region in the country. And I also do privatisation, like Royal Mail. Here [at DECC] I do oil, gas, nuclear, electricity market reform and renewables – and the legislation.”

And the legislation tends not to be small scale, six-clause bills. Last year, he shepherded the portmanteau Growth and Infrastructure Bill through a tricky set of political fences. This week he guided the equally extensive Energy Bill through its final Commons stages. It’s been a baptism of fire that would unnerve most Ministers of State, and he’s had to get rapidly up to speed on everything from getting consumers cheaper bills to the longer-term funding of extra energy capacity for the next few decades.

The minister, whose work schedule makes him look like a one-man productivity drive, borders on the evangelical about the merits of the bill’s £110bn investment in energy supply and the 250,000 jobs it will create to 2020.

Just as important as the bill itself are the crucial draft ‘Contracts for Difference’ with electricity suppliers which Fallon will publish next month. From gas to nuclear, from onshore to offshore wind, the 15-year contracts lever is the vital investment needed to keep the lights on in Britain.

“This is the year investors will get clarity,” he says. “We hope [the Energy Bill will] be on the statute book before Christmas”. The Government is also designing the ‘capacity market’ at the moment and he says he hopes to start announcing more details soon.

“The capacity market we are designing at the moment and we are hoping to start announcing more details of that as the summer goes on….They [the industry] all want us to get on with it and we are getting on with it. That’s one of the things the Prime Minister sent me here to do, to make sure we now deliver.”

“What we’ve said is we are minded to run the first auction in 2014, we can’t do that until the Energy Bill is law and until we have approval from Brussels for the capacity market and the secondary legislation in place. We are talking to Brussels all the time. They see our proposals in draft. But we certainly couldn’t run one anyway before the middle of 2014.  So we are minded to run one in the second half of ‘14 for delivery in 18. It takes four years from scratch to build a gas station, through the planning and construction, it takes seven years to get a nuclear station on line. So four years is pretty quick.”

Fallon has a typically robust reply when asked to what extent energy policy is about market failure and to what extent Government failure.

“It’s about the previous Government’s failure to build new power stations, that’s the biggest failure of all,” he says. “In 13 years they simply didn’t build the new capacity we need, so stations have been going off-line, all the coal-fired and oil-fired stations are being withdrawn, we are going to lose very soon some of the older nuclear stations. Nothing was done in 13 years so we have to fill that gap and we have to do so as quickly as we can.”

Targets, however, are the wrong way to get results, Fallon insists. He successfully fought off the Tim Yeo amendment to insert a 2030 decarbonisation target into the bill this week. “I’m wary of targets that are too specific, and that are too early and that are too tightly drafted in statute. We’ve had to look again at the huge expenditure by the last Government on lifting people just over the child poverty target line, rather than spending that amount of money on the poorest children. That’s a very good example of how targets can misallocate public spending.”

Even when John Hayes was still in post, the PM clearly saw the potential for linking up his business minister to energy policy. Last Christmas, Fallon was asked to co-chair the Nuclear Industry Council with Ed Davey. Now he has control of nuclear issues, he is keen to stress nuclear’s importance to the UK’s low-carbon future, despite the Fukushima aberration. “The industry is recovering its confidence. There are over 60 stations under construction around the world, 32 countries now planning new stations, in France, Finland and hopefully here. I launched a supply chain event for Horizon [Nuclear Power] down in Gloucester last week and 200 British companies came to be sure that they wouldn’t miss out on the supply chain opportunities for our next stations [at Oldbury and Wylfa]. And then we have Sellafield and then proposals after that for perhaps further stations at Sizewell and some of the other existing sites. So nuclear is gathering pace.”

The first new nuclear power station in a generation was expected to be Hinkley Point in Somerset, but French firm EDF is the only bidder and it’s clear that it’s not a done deal. “It doesn’t all rest on Hinkley and EDF. I was left in no doubt last week as to Hitachi’s commitment to Horizon, which is a long term commitment to new nuclear stations in Britain, which is very welcome.” Still, given EDF is the only firm involved in Hinkley, doesn’t the company have the upper hand as it negotiates? “That’s my point, we are not over a barrel,” Fallon says. “We have Hitachi ready to come in, they are next in line. So we are not wholly dependent on Hinkley. We would like to do the deal with EDF but we are not going to do it at any price. It’s a very complex negotiation and we are inching closer but we are not quite there yet.” The ‘strike price’ for nuclear at Hinkley has been assessed at between £93 and £95 per megawatt hour. Fallon says: “It isn’t just the strike price, this is a very complex negotiation. We are still apart on five or six issues.”

On nuclear’s benefits for UK jobs, he’s bullish: “And there are big opportunities for us overseas, once we get the expertise and the supply chain strengthened. Obviously it’s been hollowed out, we’ve lost skills during the long dark period when nothing nuclear was built but we can recapture that and there is huge export potential there. Not just decommissioning also in the operation of these stations, in the regulatory regimes, there’s an awful lot that we can earn from abroad.”

Another area where Fallon is just as keen to accelerate progress is on shale gas exploration, and he’s waiting eagerly for the British Geological Survey report on the Boland site in Lancashire. “It’s very exciting but it’s also very important. Shale has dramatically lowered the cost of energy for industry in the States and it is very important that Western Europe is not put at a disadvantage, that we don’t start losing manufacturing processes, steel plants or chemical plants to the States because of the long-term cheaper cost of energy there. And we are not the only country interested in shale, there’s Poland and elsewhere.”

As for the UK, he says: “There are a number of small companies now revving up. What I want to do now is inject more pace into this. The Chancellor has announced the fiscal incentives that will apply, they are being discussed in detail with the industry and they will be firmed up by the summer and they will be in the Autumn Statement and they’ll take effect from next April.

“Fracking is not a new technique. We’ve been hydraulic fracturing for oil for dozens of years. There have been 10,000 wells fracked in Canada. Ten thousand. Quite safely. We have in place already very strict controls by the Environment Agency on things like the water contamination and on methane emissions. Health and safety has to be satisfied that the fracturing itself is being done safely and responsibly. There has to be planning permission, there has to be a licence and finally there has to be consent from here [DECC]. There are five locks to ensure that shale exploration is going to be safe and responsible. But it would be irresponsible not to go down and have a look at what’s there.”

“I’ve been over to the States and I’ve learnt about the rather different regulatory approaches state by state. It’s clear that some states have been much tougher in their environmentally protection than others and we can avoid that. We will avoid that. We have one system here.”

“It isn’t fracking, but I authorised the first shale drill recently for Balcombe in West Sussex. That’s an exploratory well that’s being dug there. It’s subject to a few more pieces of information they’ve got to give us, but they will go ahead in June.”

Fallon adds that local concerns will also be taken into account. “We’re working with the industry on a package of community benefits so that if there is shale extraction in your area, the community will benefit directly either through reductions on energy bills or through other investment, in the village hall or whatever. There will be some benefit.”

“It won’t be exactly the same [as onshore wind benefits] but there will be community benefit from shale gas exploration just as there will be also for onshore wind and indeed for nuclear. There has to be for the area affected during construction for example, there has to be some relief, seven years of construction.”

Asked how different they will be from wind farm cash schemes, he replies:  “These won’t be exactly similar packages but they’ll have a consistent theme but as far as possible the local community and that doesn’t necessarily mean a large county council but the local community should benefit and where possible people should see reductions in their bills

“It’s not a bribe. It acknowledges some of the disruption involved in the construction and in the operation of these sites.”

Of course, persuading local communities to agree to new forms of power production is not always easy. Fallon accepts that many areas are against onshore wind turbines, even though they can now provide a serious chunk of our total energy (6% on average but getting up to 12% this windy January and February). Only a third of planning applications is successful.

The minister is sympathetic to local concerns. “It’s becoming harder and harder for developers to find suitable sites. But there are areas in the country that do feel under siege from repeated applications. The package I’m going to be announcing in a couple of weeks [in the end it came early, today] will, I hope, alleviate those fears,” he says.

This planning protections package will ensure the community benefits. “As far as possible the local community – and that doesn’t necessarily mean a large county council but the local community – should benefit and where possible people should see reductions in their bills. And I’ll be announcing the onshore package in the next couple of weeks. That is partly to give communities a stronger say over where turbines are sited but partly also to give developers more certainty about the rules.”

From forcing the Big Six electricity firms to give customers a better deal to securing jobs, Fallon knows energy policy is a frontline political issue. “I think it’s moving up the political agenda. People are more aware of the total cost of their energy and more aware too of what they can do to reduce that cost. There are also measures in the bill on electricity demand reduction, which are just as important. The Green Deal is important. You know, we’ve got to prize energy more.”

So, what are Fallon’s own personal views on climate change? Is he a John Hayes-style sceptic? Or would he describe himself as a climate change realist? “You are getting me into theology now, I don’t deal with that,” he says, adding with a smile, “that’s the other side of the department, isn’t it?

“You are not going to draw me on that. I’ve not had time to get into the great climate change debate. My job is to make sure the lights stay on and we get new investment in energy and a better deal for the consumer. I do not have time all day, I’m afraid, to read these various tracts. There are lots of them and a very polarised debate. Instinctively I’m… well, anyway… I’ve not gone into it.”

Fallon used to relax by playing chess, an ability that probably comes in useful during the complex regulation and policy making he now handles. He tells a lovely story of how he once played world champion Garry Kasparov.

“It  was just after the wall fell in ‘89, when the iron curtain came down. Kasparov came over to play the Parliamentary chess team of Commons and Lords. There were 20 of us signed up for this. It was done in Westminster Hall in the Jubilee room and there was a big rectangular table and we were all told that he would play White and you couldn’t move until he stood in front of you because he was memorising all the games. He walked round in the middle of this rectangle playing you all simultaneously, which is what they do. He arrived, stood there and said it was such an honour to be in the Houses of Parliament the mother of democracy that he wouldn’t dream of playing White that we should all play White against him.”

Fallon laughs at Kasparov’s ingenuity: “So we’d all spent weeks and weeks scrubbing up our defences, like the Sicilian defence, all this stuff, and suddenly we all had to choose an opening against the greatest player in the world.

“Of course as the weaker guys dropped out and he came round faster and faster. You were just trying to work out what he’d done last time, what on earth his move meant, and suddenly he was standing there in front of you. I played next to Tam Dalyell, who was completely bonkers. He advanced four pawns in a row up the left hand side. Kasparov kept coming round and staring at this. He’d never seen anything like it before. These ships going hunting the Belgrano, these pawns advancing. It was very funny. We all lost and a very snooty man kept walking round behind me from the English Chess Association or whatever they are called and started saying to his colleague: ‘Have you seen any interesting games yet?’ It was all a question of who would drop out first. I think eventually our honour was saved by somebody from the Vote Office or printed paper office. Some unknown clerk was the hero of the day who had held him to draw I think.”

“I did one thing with the Kasparov match. I managed to notate it. I don’t think anyone else managed to have time because he kept whirling round the table. I’m too embarrassed to take it out and see where I went wrong. But Fallon versus Kasparov, I have a note of it.”

The  early1990s, Communism, even remembering the old Commons ‘Chess and Bridge Room’ (it was next to the ‘Smoking Room’, he points out), all prove just how long Fallon’s been around.

It’s a testimony to Fallon’s political longevity that his current post completes an arc that started back in 1987, when Mrs Thatcher appointed him as a young PPS to Energy Secretary Cecil Parkinson. One of his first jobs was to attend a meeting with the Icelandic embassy to discuss an interconnector with the UK. Several decades later, he had a meeting last week with the Icelandic ambassador to finally secure that very same geothermal link. “But also there’s a strong sense of déjà vu because electricity market reform is essentially about updating the pool of electricity arrangements set in place after privatisation back in ’88/89,” he says.

One difference between now and then is perhaps that there’s a greater sense of urgency from politicians given the climate change science. “Yeah, I think there’s an awareness that there are huge costs to fossil fuel energy. You are getting me back into climate change, aren’t you?” It’s the elephant in the room in a way isn’t it? “Well, it may be. But I’m telling you the truth, I have not had time to sprawl on that sofa and start reading loads of climate change literature. I’ve been too busy.”

Only this week, Davey railed against those who disbelieved the scientific consensus on global warming. Perhaps keen to avoid the spats of his predecessor, Fallon is more diplomatic about his boss. He even puts in a kind word for his ‘other’ boss, the Business Secretary. “It’s very hard not to get on with either Vince Cable or Ed Davey. I think they are personally charming, cooperative and trusting. It’s hard to get over to you but we are actually too busy to spend a lot of time on differences, political differences. On policy we are all in the business of delivering.”

Still, Fallon is refreshingly candid on the limits of cooperation in Government. “Life would be a lot easier if we didn’t have the Coalition,” he admits. In what ways? “The process of coalition for both sides is time consuming, bits of it can be tedious, there are an awful lot of people to be consulted, getting agreement across Whitehall is made doubly difficult by the Coalition.” He adds swiftly: “But then if we didn’t have the Coalition we would be stuck with the rest of Europe, way behind on our fiscal plan. The great strength of the Coalition is that it is a five year programme which we have stuck to, of getting the deficit down. Fair play to the Liberal Democrats they have never wavered in that central purpose.”

Europe is obviously one area where the two halves of the Coalition don’t exactly see eye to eye.  Yet despite being a dedicated Eurosceptic, Fallon displays a hard-nosed pragmatism.  Whisper it quietly but he even voted ‘Yes’ in the 1975 referendum.

“Most people voted ‘Yes’ then because there wasn’t a very clear alternative and those who want to leave will still have to sketch out an alternative trading framework for this country to replace any trade we lose as a result of higher tariffs or other barriers if we leave. So that still remains true.”

Fallon also stresses something older MPs often cite about 1975 and the context of the vote. “I also voted yes for another reason. This gets forgotten now, but I did want to see Europe enlarged. I really did see the Community as the best possible avenue to end the communist regimes in Eastern Europe and the fascist regimes in Greece and Spain and Portugal. I really did see the Community as an avenue of hope to get democracy going in those countries, so there it’s been a huge success. It’s a great thing to see free elections now taking place when they didn’t in 1975, you forget too easily Greece, Spain and Portugal were dictatorships then. And of course half of Europe wasn’t free at all.”

There is a ‘but’ to all of this, however.  “But in terms of regret, yes Europe has now become something quite different. It’s become a much more of a process that is coercive, harmonising, compelling. That’s the bit I certainly regret. It’s not so much an organisation as a process, that is slowly but surely trying to weld member states together in a way that is very alien to us here,” he says.

 “We can’t ignore this huge home market on our doorstep, however depressed it is at the moment. It’s the largest home market in the world and there are a huge number of jobs dependent on it. Perhaps not the three million that the pro-Europeans claim but there are a huge number of jobs and a lot of trade dependent on it.

“But I’m always struck and I was struck again yesterday as I was visiting a company in Tracey Crouch’s constituency… so many of the companies I visit have kind of parked their business with the zone - and are now saying ‘well we are now going for orders in Brazil or Nigeria, Angola, Korea’. Our companies are successfully trading across the world.”

On the EU referendum itself, he stresses just how much Brussels needs to reform even before we get to the 2017 plebiscite.  Asked if he agrees with Liam Fox that the UK shouldn’t fear life outside the bloc, he says: “I don’t think we need to be fearful of anything, but we do need to see what reforms are possible.”

“Some of that work is underway. We don’t have to wait for the election to complete the single market, to complete the market in energy, in digital, to improve the budget and some of their processes and to make sure we get free trade agreements with the States and with Singapore and with Japan. That whole agenda, we don’t have to wait for the election, a lot of that work is underway at the moment. We need to see whether we can get a much more outward looking and more liberal Europe that can better accommodate British interests. That’s not impossible.”

That ability to stick to the Coalition script while expressing the irritation of fellow Tories has made Fallon a reassuring figure for many of his party’s backbenchers.

A Westminster veteran who’s held both a northern marginal and a southern safe Tory seat, he’s politically savvy enough to hold business and jobs meetings in key seats like those of Tracey Crouch and Richard Fuller. He’s also smart enough to know the energy industry doesn’t like tales of infighting or instability. When it’s put to him that he’s the fifth energy minister in five years, he says: “Let me hit this nonsense on the head. It’s a very false statistic. The Prime Minister wants to leave people in place longer – Blair managed to change them every year. Charles Hendry was here for two and a half years, Mark Prisk was my predecessor in BIS for two and a half years. John Hayes had to be moved for other reasons. He was required at Number 10… The industry had a lot of stability under Charles. I’d love to be here ’til the election.”

But with backbenches and No.10 alike impressed by the steady Fallon hand, isn’t it possible Cabinet may beckon before 2015?

“Cabinet? No, no… That’s not something that’s on the agenda. I’ve only just got here. I really don’t want to leave. I think it’s important for the industry that they do get a reasonable amount of continuity.”

With that, the Energy Minister eyes one of his drawer snacks. His favourite performance enhancer may be a Kellogg’s Rice Krispies Square bar. But it seems Michael Fallon’s real drug of choice is Getting Things Done.

 

 

Fallon on… having two jobs
“You just have to focus on what’s essential. I’ve shortened meetings… there’s no need to have hour-long meetings.”

Fallon on… the EU
“It’s become much more of a process that is coercive, harmonising, compelling… slowly but surely trying to weld member states together in a way that is very alien to us.”

Fallon on… playing the world chess champion
“I’m too embarrassed to take it out and see where I went wrong. But Fallon versus Kasparov, I have a note of it.”

 

Greatrex Expectations

Labour MP and Shadow Energy Minister Tom Greatrex talks twins, Tory grandees and the totemic issue of renewable energy

 

WORDS BY TONY GREW

 

 

Tom Greatrex is looking relaxed. The Shadow Energy Minister managed to get away for a few days to Portugal during Whitsun recess with his young family.

His daughters, identical twin girls, are “three-and-a-half and very opinionated”.

“I have just come off the best part of two weeks being ordered about in a way that whips could only dream of being able to do,” he explains. “I am an oppressed minority!”

Greatrex, elected to the Commons six months after his daughters were born, is personable, presentable, comes across well on television and is pragmatic rather than ideological.

He is seen as a rising star on the Labour benches. He is also a doting father.

“Yesterday one of my daughters told me that when I was going back to work I must buy her a new bible. ‘Because they sell bibles at your work don’t they daddy?’

“We are not religious at all. We stayed in a hotel in Manchester when they were about two and one of them picked up the Gideon’s Bible and since then has just been fascinated with it and flicks through and points at the numbers.”

His daughters “know that I go to work and talk because occasionally they have seen bits of me on TV and they know I sit in a green chair, which I suppose if you want to try and describe it in 140 characters is a pretty good summary”.

Greatrex has an unusual background for a Scottish Labour MP, in that he is a grammar school boy from Kent. He was brought up in Ashford and attended The Judd School between 1986 and 1993, before studying at LSE.

“My grandfather was a parish councillor somewhere in Sussex, but not Labour. He was probably Conservative-inclined – he was a farmer.

“My dad was a rebel and at the age of 15 refused to work on the family farm. He trained to be an Ordnance Survey surveyor at a time when they were remapping the country. He used to literally go and measure fields. It is all done digitally now.”

Greatrex’s first brush with Westminster politics came when he was in sixth form.

“I was against the grammar schools when I was at a grammar school."

“I distinctly remember having a discussion with John Stanley, who was the school’s MP, when he came to visit.”

The debate with a Tory grandee clearly had an abiding influence on Greatrex – he mentioned the encounter in his maiden speech.
He joined the Labour Party in Tunbridge Wells in 1991.

Greatrex’s career trajectory is that of a Labour insider – he worked in the whip’s office straight out of university, then as a special adviser and as a GMB union official. 

He moved to Scotland a decade ago, working in local government and for the NHS, then as a policy adviser for Scottish Secretaries Douglas Alexander, Des Browne and Jim Murphy.

He moved north when he got married. “My wife’s family are in Scotland and she wanted to be close to them and do an MBA at Strathclyde.

“I had a period outside of politics when I first moved to Scotland about 10 years ago, and I had four or five years working in the health service and in local government.

“I think that gives me some semblance of experience of how things work in the bits of the public sector that are about delivering things that we legislate for here.”

Greatrex was selected for the safe seat of Rutherglen and Hamilton West, succeeding Tommy McAvoy in 2010.

“We lived in Glasgow and we moved to a house because we wanted to start a family,” he explains, when asked if the move was part of a master plan to get into the Commons.

“It was just coincidence that the place we happened to move to, where we could afford a stone built house with a garden, was in that constituency.
“My selection was very late on, but it was still the local party that selected me, it was not an imposed selection. I found that local party members wanted someone they considered to be local.

Greatrex says there is a certain irony to his being considered local when he grew up 400-odd miles away from Rutherglen, “but I lived locally and had been active in the local party before anyone knew my predecessor was standing down.”

Greatrex said he has not faced any anti-English prejudice since moving to Scotland, “apart from a couple of throwaway comments at the count from the SNP, which I didn’t take particularly seriously”. “It is certainly true that there is an undercurrent of anti-Englishness among some of the most rabid nationalists,” he adds.

Aspirant MPs who move into an area have been known to develop a sudden interest in the local football team, but Greatrex still roots for the team he grew up supporting.

“My father’s family are from Fulham and I got dragged along from the age of four, it was a like a form of child abuse getting dragged along when you don’t have any choice, but eventually you get to love it.

“If you were cynical you would say it is an advantage in the west of Scotland not to be a Celtic or Rangers fan, but I have always been a Fulham fan and there is no point in trying to pretend you aren’t,” he explains.

“I do go and watch Hamilton, and Celtic occasionally, and I have been to Rangers. I love football so I will go and watch almost any football. I have found about eight or nine Fulham fans living in my constituency.”

When Greatrex was studying at the LSE, he considered a career as a broadcaster.

“I used to work at one of LBC’s previous incarnations when they had a serious news thing on FM that no one listened to.

“I worked there in the school holidays but I got dragged into Westminster by accident. John Smith died. I was a young radical at that time and signed up to campaign for Margaret Beckett and spent some time stuffing envelopes.

“I got to know Nick Brown a little bit, and I worked for him one summer. Then when I left university a job came up in the Labour whips office.”
Greatrex, perhaps still a bit of a rebel, backed Ed Miliband for leader, and was given an early promotion to shadow the Scotland Office. In 2011, he was moved to energy and climate change.

The cost of living, and in particular the inexorable rise in fuel bills, will be a big issue on the doorstep at the next election. Greatrex says “people feel like they are being ripped off” by the Big Six energy suppliers.

He pledges reform if Labour wins in 2015, but is cautious about over-promising. “What we are saying we should do is have powers to ensure that when wholesale prices come down, those cost reductions get passed on to consumers.

“That is not what happens at the moment. Last winter the energy companies put up their prices by between 9% and 12%, but when wholesale prices came down, very few made any sort of reduction.

“The difficulty is that it is hard to work out if people are being ripped off and that is why we have said that the reform that is needed in the energy market is transparency.

“There are six companies that generate most of it; they also sell 99% of it. They sell it to themselves and to each other and to everybody else. There are a series of transactions there and Ofgem, the regulator, has found it very hard. They have hired forensic accountants to try and determine if there is any profiteering.”

He cautions that greater transparency “does not necessarily mean that prices are going to come down, but it means people will be able to be clear about what they are paying for”.

“That is the big gap in the Energy Bill. It is a big mistake not to reform the retail market at the same time. Ofgem was set up to be an economic regulator at the time of privatisation – their role needs to change and be much more responsive to the consumer.”

Greatrex says the Conservatives are using renewable energy as a kind of proxy battleground, “a totemic issue that is about something else, the frustration of some of the Conservative Party at the Coalition, the fact they feel they are not connecting well with the electorate”. He adds: “In energy policy, ideology is quite dangerous because it touches on almost every other policy area. You need to make long-term decisions and you don’t get big change quickly.”

But Greatrex, while damning the Tories over green policy, does have a kind word for one Conservative who sits with him on the Procedure Committee.
“Jacob [Rees-Mogg] is a man of great wisdom. He is often caricatured but beneath all the historical analogies, he is actually a very sharp individual. We have had different things on the Procedure Committee when we are trying to work out a way forward, and he is often the one who comes up with a way of doing things.”

If Labour return to power, Greatrex promises a way of doing things based on “evidence, science and practicality, not ideology and emotion”.

Commons Gallery

 

This week Baroness Jay told The House that coalitions could become more common in the future. Judging by the enmity between Nick Clegg and Labour at this week’s DPMQs, any future union of red and yellow will not be a happy marriage.

The Opposition seem to relish their monthly Clegg-bashing sessions, and in turn he adopts his ‘angry schoolteacher’ mode, sighing deeply and firing off tart admonitions across the Despatch Box.

The DPM began with a touch of self-deprecating humour when asked by Pat Glass about Lords reform. “We have no proposals for a comprehensive new overhaul of the House of Lords,” he said. “We tried that once, and didn’t make the progress for which I had hoped.” Glass was perfectly reasonable, asking about Lord Steel’s proposals, but Wayne David goaded the Lib Dem leader, pointing out that Clegg’s plan “came to nowt”. “That is pretty rich,” Clegg retorted, “coming from a frontbencher of a party which, despite its own long-standing manifesto commitment in favour of democracy in the House of Lords, couldn’t even bring itself to support a timetable motion to make that a reality”.

The session continued, with regular outbreaks of Labour hostility. Harriet Harman accused Clegg of being “complacent” over A&E waiting times. “We have a laboratory experiment of what happens to the NHS when Labour is in charge,” Clegg spat back. “Let us look at what happened to the NHS and to A&E waiting times in Wales. Let’s not forget that in Labour-run Wales the last time A&E targets were met was in 2009. We have met them for the past five weeks.”

Huw Irranca-Davies brought him back to Lords reform. “Labour has a constant, rather unedifying record of stuffing the other place with Labour appointees,” Clegg remarked. Barry Sheerman asked a non-partisan question about the steep decline in political participation. “If his party had supported democracy for the House of Lords, would clean up party funding, and had given wholehearted support to electoral reform, perhaps he would have a leg to stand on,” Clegg replied. Steve Rotherham told the DPM to “give hope to his party by announcing the date of his resignation, or hope to the country by announcing the date on which he will dissolve the Coalition.”

After a break for questions to the Attorney General, the Clegg-baiting continued. Paul Flynn accused him of moving “at the speed of an arthritic sloth” over lobbying reform. Kevin Brennan claimed his “ambition as the greatest constitutional reformer since 1832” had been reduced to “the level of housekeeping”. There was the odd brickbat from Tory malcontents Peter Bone and Bernard Jenkin, but the main attacks were from Labour.
Two years is a long time in politics, but it’s hard to imagine Mr Clegg sitting comfortably on the Treasury bench with Harriet Harman & Co. in any future Lib-Lab government.

Dialogue

Every issue two Parliamentarians email each other with different ideas on a particular subject. This week Peter Lilley and Baroness Wo...

 

from: Peter Lilley
sent: 28 May 2013 11:03

Thanks to Green ideology, Britain is facing a double energy crisis.

First, a supply crisis – potential electricity shortages within a decade. This is not because demand is outstripping supply. The recession has depressed demand. But existing coal plants are being closed because of the EU emissions directive. Nuclear plants are due to close through old age. No replacements are under construction because of decades of environmentalist opposition. Wind, solar, tidal are intermittent, cannot provide base load and need fossil fuel back-up for substantial periods. But the Climate Change Act makes it impossible to build new fossil fuel plants for base load.

Second, a cost crisis – driving more people into fuel poverty and manufacturing jobs abroad. There simply are no affordable renewables: all cost at least twice as much as fossil fuels – offshore wind three to four times. Greens argue that by investing in them we will accelerate technological development so that costs become competitive. Even if it does Britain will be saddled with the high cost prototypes and our competitors overseas will reap the rewards of our investment. Meanwhile environmentalists claim rising gas prices will make renewable competitive while raising spurious objections to shale gas – our one hope of lower cost energy.


from: Baroness Worthington
Sent: 29 May 2013 10:37

Dear Peter

Let’s put this in perspective – yes some old coal plants are closing but this reduces the historically high over-supply, which has been deterring investment, to normal levels. Economics have stalled new nuclear, not green groups. Wind and solar are helping to reduce imports of fossil fuels and not all renewables rely on varying sources of energy – biomass has played a significant part in our move to low carbon electricity and is increasing.

Do you really believe we alone are developing renewable technology prototypes? Where we are, you see costs, but investors see profits and I see jobs and benefits to UK balance of trade. Also, to be clear, new fossil plants fitted with carbon capture and storage are possible, a technology that the UK could lead in.

You must surely accept that fuel poverty has been exacerbated most by rising gas prices. Shale gas could provide a respite but it’s not certain cost reductions achieved in the US will be reproduced here. Some may oppose on principle; others call for sensible sustainability criteria, benefitting everyone living near potential drill sites. But it’s just as likely – perhaps more – that Tory Nimbys will be doing the objecting in the end.

Best, Bryony


from: Peter Lilley
Sent: 03 June 2013 16:17

I am surprised that you are unconcerned about the potential capacity shortage? Ofgem is. You tacitly accept that wind and solar cannot provide base load or spare capacity. The only renewable that is ‘dispatchable’ is biomass which you say plays a significant part. How much? If it were subsidy and carbon free it would be welcome. But even shipping the limited availability of waste chips and off-cuttings requires a big subsidy; as we start felling forest any carbon saving disappears for a generation.

The notion of green jobs created by subsidy is a sophisticated version of Luddism. We could ‘create jobs’ (gross) in hand loom weaving if we subsidised it enough to replace mechanised weaving. But taxes to fund subsidies destroy as many jobs elsewhere in the economy. Fossil fuels give more power per job than renewable, which is the real measure of value.

Insofar as our subsidies promote technological development, sadly nearly all of it is overseas – not here.

I agree higher gas prices increase fuel poverty. They should also reduce the subsidy necessary to make renewables economic but that does not seem to have happened. Why add to the problem by more high cost renewable?

Best regards
Peter


from: Baroness Worthington
Sent: 05 June 2013 07:10

Dear Peter

Ofgem is not responsible for keeping the lights on, National Grid is and it maintains a tightening margin will produce the natural market response: new investments. Ofgem, unlike Grid, also has a notorious blind spot when it comes to demand management.

Clearly some renewables require a new way of managing electricity but they free us from the merry dance of world fossil fuel prices, which are only increasing in the long term.

Costs of renewables have shown they can fall sharply over short periods – can we be as confident in relation to gas prices?

I don’t see why you single out renewables as if they were the only recipients of subsidy. Are the decades of subsidies to offshore oil and gas industries, and the new shale gas subsidies, also ‘job killers’? Or necessary to establish a home grown source of power?

In measuring the value of different power sources you have to factor in the huge externalities related to fossil fuel use. Until we find ways of producing power cleanly they cannot be relied upon to meet our energy needs. With a decarbonisation target we can do this in a technology neutral way – why do you not support this?


from: Peter Lilley
Sent: 05 June 2013 15:30

The only difference between Ofgem and the Grid is how long we have got before we need new capacity. Unless new nuclear beats all expectations we will need something other than renewables to meet base and peak loads.

My profession involved forecasting energy prices and I discovered a) it is very difficult and b) gluts, though never anticipated, last longer than shortages. The certainty of the Greens that fossil fuel prices will just go on rising is unfounded. Unless God is an American and has decreed that fracking technology will only work on American shale, there will be a big impact from the massive shale resources worldwide.

I oppose all fuel specific subsidies. The claim that petroleum industry receives massive subsidies is Green propaganda. It relies on defining the low VAT rate for energy (including renewables) in the UK as a subsidy for oil and gas which is absurd. I have campaigned against unnecessary tax reliefs for shale gas and to make oil companies pay for North Sea oil licences via auctions.

Any carbon price set equal to estimated externalities (as by Stern) would be a fraction of current subsidy levels for renewables.


from: Baroness Worthington
Sent: 05 June 2013 16:59

Dear Peter

I’ve enjoyed our exchange, clearly your background gives you an understanding of the underlying factors in energy policy. However, you have a blind spot in relation to climate change. As you yourself admit, in advocating that we do nothing, you are in a tiny minority. And what if you are wrong and 97% of scientists are right? What then?

Investing in new, cleaner forms of power, including nuclear, renewables, CCS; managing our demand in a smart way; reducing exposure to fossil fuel imports and prices – these are ‘no regrets’ policies. Shorter term, replacing coal with gas can also help significantly.

The UK was home to the industrial revolution, delivering cheap and abundant power, improving global living standards. We have an opportunity to be a leader in the next energy revolution – benefiting even more people, sustained long into the future. If, when you were Trade and Industry Secretary, we had exploited our huge renewable potential, alongside our oil and gas, we would be in the position that Denmark and Germany are now, dominating the supply chain. I hope we will not miss out again in the next generation of energy technologies but under this Government, I fear we will.

Best, Bryony

The Ten Political Nicknames

 

WORDS: JESS BOWIE 

1 The Dark Lord
One of Britain’s original ‘spin doctors’, Peter Mandelson soon became known as Labour’s Prince of Darkness. Appropriately, after his ennoblement in 2008, the moniker changed to the Dark Lord. Mandy (as he’s also known) is said to relish the nicknames, and once even signed off “Love from Peter Mandelson pp The Dark Lord” when asked for his autograph.

2 Broken Arrow
This nickname for Andrew Lansley may not have caught on, but back in 2011 it certainly earned its creator Grahame Morris a few ‘quip of the day’ plaudits. Debating NHS reforms in the Chamber, the Labour MP said if Lansley refused to resign as Health Secretary he’d be “worthy of his nickname Broken Arrow: he doesn’t work and can’t be fired”.

3 The Grey Man
John Major was never a fan of his nickname. Recalling a recent encounter with Sir John, the actor Dominic West said: “I told him how surprised I was that he was so into the creative arts, given that he was known as the Grey Man.” The former PM apparently told West he was “only referred to as the Grey Man due to his hair”.

4 The Chingford Skinhead
There was more to Norman Tebbit’s nickname than his balding head. Thanks to Spitting Image, Chingford’s Conservative MP was for a time entrenched in the popular imagination as a leather-clad biker with a sinister Essex twang who would beat up other members of the Cabinet when they refused to do Thatcher’s bidding.

5 Baldemort
Liam Byrne’s nickname – a reference to Potter villain Lord Voldemort – is a favourite of the PM, although blogger Guido Fawkes takes credit for it. Could it have been inspired by Byrne’s memo to staff after he was promoted to Brown’s Cabinet, which outlined exactly when they should bring him coffee and soup? We couldn’t possibly comment…

6 Cleggover
Nick Clegg had only been Lib Dem leader a few months when he earned this sobriquet – the result of his revelation in 2008 that he’d slept with “no more than 30 women”. Given the media battering he has taken since becoming Deputy PM, Clegg may long for the days when his conquests were all the press had to talk about.

7 Harriet Harperson
The Opposition’s deputy leader has long been dubbed Harriet Harperson in the rightwing press on account of her strident feminism and commitment to equality. Harman, equalities minister from 2007-10, indeed has an impressive record in this area... except perhaps her regrettable decision to refer to Danny Alexander as a ‘ginger rodent’.

8 Paddy Pantsdown
Ahead of the 1992 General Election, the press got wind of an affair the Lib Dem leader Paddy Ashdown had had with his former secretary Tricia Howard. Ashdown decided the best way to manage the story was to confess everything. His reputation might have recovered faster had The Sun not run the mortifying headline ‘Paddy Pantsdown’.

9 Tarzan
In 1976, during a heated debate on the nationalisation of Britain’s shipbuilding and aerospace industries, the Conservatives’ Shadow Industry Secretary Michael Heseltine is said to have grabbed the Chamber’s ceremonial mace and brandished it at his Labour foes. Whatever actually happened that day, the nickname Tarzan was born.

10 The Beast of Bolsover
Labour’s Dennis Skinner has been making life difficult for the Tories, and sometimes for his own party, since 1970. The so-called Beast of Bolsover has no truck with many of Parliament’s traditions – with one notable exception. Each year during the Queen’s Speech ceremony, Skinner himself is allowed to crack an irreverent joke.

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