The fallout from the EU referendum and Brexit plans hasn’t just seen division in terms of political philosophy. It’s seen division and merger of government departments since Theresa May took over and axed, among other things, the Department of Energy and Climate Change (DECC).
By folding it into the Department for Business, Innovation and Skills and thereby creating a new ministry called the Department for Business, Energy and Industrial Strategy (BEIS) it goes back to the days before DECC existed and alignment of industrial strategy and energy strategy at least lived in the same place even if neither were particularly clear or coherent.
Will the relocation of DECC’s staff be more than cosmetic, or will they continue to exist under a different secretary of state doing largely the same things alongside colleagues from elsewhere in the civil service?
It very much depends on Greg Clark – pictured above test driving an electric car while at the DCLG – in his new role as head of BEIS following a dramatic cabinet reshuffle orchestrated by May.
Reacting to his appointment, Clark said: ‘I am thrilled to have been appointed to lead this new department charged with delivering a comprehensive industrial strategy, leading government’s relationship with business, furthering our world-class science base, delivering affordable, clean energy and tackling climate change.’
The abolition of DECC has been condemned by former ministers as a major setback to British efforts to combat global warming. Ed Davey, who acted admirably as secretary of state as a Liberal Democrat in the coalition with the Conservative Party in government between 2012 and 2015, criticised the decision: ‘This is a major setback for the UK’s climate change efforts. Greg Clark may be nice and he may even be green, but by downgrading the Whitehall status of climate change, Theresa May has hit low carbon investor confidence yet again.’
If you, like Davey, were disappointed that DECC was culled then maybe there is some hope. This is not Clark’s first brush with the climate change brief because, between 2008 and 2010, while the Conservatives were in opposition, he was shadow secretary for energy and climate change. In this time, he made his views clear on climate change.
In 2009 he said: ‘Some have asked can we continue to afford to fight climate change at a time like this? Shouldn’t we perhaps put it off until the economy gets moving again? It’s a good question… though one that is sometimes asked in bad faith by those who’d oppose action on climate change at anytime. That might be because they just don’t believe the mainstream scientific position on climate change or, in some cases, because it doesn’t suit their vested interests. Either way, the recession argument is, for them, just the latest in a series of delaying tactics.’
And perhaps the integration of climate change and industrial policy will give ownership to the issue of industrial emissions that conflicted when in separate departments. In 2009 Clark said: ‘Policies to decarbonise the UK economy should never be treated as some sort of sideshow or distraction. Nor should they be seen as an irrelevance during a time of economic downturn. “Green” policies do a lot more than protect our environment; they create immediate new jobs in construction, manufacturing and services, they reduce energy bills through greater efficiency and they will help reduce our balance of payments deficit in the longer term by reducing our dependence on imported fossil fuels. We should be using the downturn to make this conversion to a more resilient economy, not putting the problem off again until the next unsustainable boom turns to bust.’
Of course, these quotes were made seven years ago and when in opposition to government. Things have been, on the whole, pretty quiet on the energy policy front since then – not uncommon during the summer months of government recess. Rest assured things will get lively again in the autumn when the domestic energy tariffs come under scrutiny again. Debate will surely rage about the effectiveness or otherwise of the Green Deal and its next incarnation. Major market disrupters like Flipper might well drive change, or irritation in the Big 6, and the lobbyists will be out in force again.
The biggest story, of course, has been the ‘will they, wont they’ on the Hinckley C nuclear power planet. Does the UK want French investment and China money to build its infrastructure? The prime minister has got involved in this one given the diplomatic nuances of multinational decision making.
To some extent, the merger of DECC and BIS does not come as a surprise. The political profile of energy and climate change, when compared to many other issues, is not what it was in the late 2000s. This is not because they are unimportant. The evidence for climate change is as strong as ever and there are other pressing challenges facing our energy sector.
Jim Watson, research director of the UK Energy Research Centre, based at Imperial College, London wrote recently that while some analysts such as Richard Howard from Policy Exchange argue it presents a good opportunity to strengthen the salience of energy and climate policy, others – particularly environmental NGOs and former DECC secretaries of state – have expressed alarm. The first secretary of state for DECC, Ed Miliband, called the decision ‘just plain stupid’, and Craig Bennett, chief executive of Friends of the Earth said it was ‘shocking news’.
Prof Watson goes on to say, in his blog: ‘First, it is important to bear in mind that the new Department does not mean a return to the days of the old Department of Trade and Industry (DTI). At one point in 1997, energy policy was just part of the portfolio of one junior minister in the DTI. This time, the whole of DECC will be moved into the new department. The old divisions between climate change policy and energy efficiency policy (which used to be the responsibility of Defra), and energy supply policies (which were overseen by DTI), have not been reinstated.
‘Second, the Climate Change Act is now well established. It legally requires the government to set a long-term target and five-yearly carbon budgets for emissions reductions. It is welcome news that, in the midst of the recent political turmoil, the government accepted the 5th carbon budget recommendation from the Committee on Climate Change.
‘Third, the new department has a ministerial team who have prior knowledge of their brief, and of understanding why the shift to a low carbon energy system is important. In opposition, the new secretary of state Greg Clark wrote a policy paper on the low carbon economy. Similarly, the minister of state Nick Hurd was a member of the Conservative Party’s quality of life policy group. This was set up by David Cameron before he became prime minister to advise the then shadow cabinet about a range of policy areas including energy, environment and transport – in the context of a need to address climate change and social justice. Added to this, the new chancellor of the exchequer Philip Hammond was a strong advocate of international climate action during his tenure at the Foreign Office.’
I agree with Prof Watson in the assertion that BEIS has two real priorities to focus on.
To begin with, the Climate Change Act isn’t going away. We’re not ripping up that legislation just because we’re leaving the EU. The challenges of achieving those ambitions, particularly the reduction in greenhouse gases, is going to mean greater self-reliance, bi-lateral agreements and no shortage of continued effort in renewables investment. How the politics and ideologies pan out is going to be a challenge. Onshore wind is already suffering.
Secondly, the opportunity to truly integrate energy and climate policy in to industrial strategy so that the UK can realise more of the economic and industrial benefits of the low carbon transition as well as meeting more traditional energy policy goals.
Clearly, how to do this is worrying government. Elsewhere, the effect of Brexit on the responsibilities of Defra is exercising the minds of the environmental audit select committee, which is inviting expressions of interest from individuals interested in being a specialist adviser to its inquiry into the future of the natural environment after the EU referendum.
As things stand, the UK’s lack of clarity on energy policy remains. Its ability to deliver the infrastructure required needs policy that is robust, longer term and financially sustainable. If it isn’t then the investors simply won’t invest. The summer will be quiet but come the autumn, as ever, when the weather gets cooler and the energy bills get more expensive you can bet Clark will have to be on his toes.