Interview: Sir Ed Davey, Former energy and climate change secretary
“The government doesn’t know what it is doing. There is no clear vision.”
By rights, Ed Davey should be a relaxed man. Gone are the stresses and constant strains that came with being energy secretary at a crucial time in the UK’s low-carbon transition. He is able to spend more time with his family, and enjoy a more lucrative career in the private sector.
And yet, he is angry.
Meeting Utility Week at a bar in central London, the former Liberal Democrat MP pulls no punches in slamming the Conservative government for ripping up the framework and policies he put in place during his tenure as secretary of state for three years from February 2012 to May 2015.
As gamekeeper turned poacher, Davey is chairman of community energy company Mongoose Energy, as well as having fingers in other energy pies in consultancy roles. This means he is able to see at close quarters the demolition jobs the Tories are doing to his work.
In what was meant to be a catch-up about the work he is doing now, and a commentary on the direction UK energy policy is now heading, he quickly explodes into a passionate condemnation of the government.
Top of the agenda, as it is in parliament, is an unwavering attack on the seemingly hard-Brexit that the UK is careering towards. Within this, it is the “crass and stupid” move to leave the European nuclear energy community Euratom that causes Davey’s blood to boil.
Also high on his agenda are fears that his good climate work will go to waste, and worry that the smart meter rollout will stall while attentions are elsewhere.
Away from taking pot shots at those in his former office, Davey does take time to reflect on how government ran in his time, with the successes of renewable energy and the failure of the Green Deal stand-out moments amid coalition arguments and disagreements.
Starting with the present day, Davey opens to Utility Week with: “You look on in disbelief as the world goes on and does stupid things.”
Homing in on Brexit, he rants: “The government doesn’t know what it is doing. There is no clear vision.” Davey shows obvious disappointment as a member of the 48 per cent who voted to stay in the EU, but is also aware of the wider impact Brexit could, and already is, having.
The government’s decision to leave Euratom as part of its Brexit manoeuvres is labelled “extraordinarily stupid”.
“This has to be the most crass, stupid, ill thought through, shooting oneself in the foot aspect of the Brexit negotiations that I’ve seen,” Davey scowls before pointedly adding “to date”.
Leaving Euratom jeopardises Britain’s ability to not only import nuclear fuel, but also parts for Hinkley Point C, such as the Areva reactor, says Davey. “It’s potty beyond potty.”
One answer to this threat would be to create a Euratom-like organisation – a so-called Britatom – which would then have to strike agreements with the EU, Japan, the USA, Australia and other nations.
Such a process could take years and would offer no comfort to the beleaguered Hinkley Point C project, or the rest of the UK’s French-owned nuclear generation fleet, unless political support is forthcoming from France, but Davey warns “why would they?”.
“I’m not saying the lights will go out,” he adds, before going on to rubbish his own statement with “but they could if they don’t sort it out as 20 per cent of our electricity comes from nukes and because of this we may not be able to get the fuel we need.”
However, that is not the biggest issue Davey has with the Euratom departure. That is reserved for the wider impact it will have on the UK’s bargaining position during the Brexit talks. He says even “mad Brexiteers” would find the move irresponsible because it weakens the UK’s hand, and a lot of political capital will have to be used to create a new agreement.
Moving from criticisms of Brexit to reflections on his legacy, Davey turns to Hinkley Point C, the nuclear megaproject that loomed over his time in office. The £18 billion development has been castigated by many for being overpriced, and tying the UK into a future with huge, inflexible, centralised generation.
Davey dismisses all of these and highlights that the agreement with the French energy company EDF removes any risk of delays or non-delivery, as well as ensuring decommissioning costs are paid for.
Provided the reactor can be imported from France, subject to the prickly Euratom negotiations already identified, Davey remains happy with the deal in place – as long as it stays in place.
As an aside to the Brexit/nuclear discussion, he states that with the pressure to be seen to be acting on energy prices, he is worried the government could look to change the Hinkley deal to bring down the headline price.
Davey’s angry tirade continues into the realms of energy efficiency. He warns that leaving the EU will mean the UK has no say in how these regulations are formed, although UK-manufactured products will have to conform to them.
With an ironic laugh, he adds: “We’ve taken back control! It’s absolutely genius.”
There is a brief respite in Davey’s Brexit barrage as he chuckles to himself on energy efficiency regulations coming from Brussels. “I used to love teasing my Tory colleagues in the coalition about how good EU product regulation was for energy efficiency!”
He also affords himself a laugh about the broader relationship with Conservative colleagues while in office. This was a fractious time, where give and take was akin to a tug of war.
Davey says he managed to get one over on his Tory and onshore wind-phobic counterparts in the March 2015 contracts for difference auction. He tells Utility Week that a large number of onshore windfarms were successful, and that post-election, then chancellor George Osborne looked for a way to renege on those deals in an attempt to stick to the Conservative pledge on “halting the spread” of onshore wind.
Davey smugly says, however, that there is no way out of these agreements and that he “looks forward to seeing Tory ministers opening the windfarms”.
Davey is clearly relieved to be rid of these daily battles, but the relief is tempered by the knowledge that without his or another yellow presence, the newly formed Department for Business, Energy and Industrial Strategy (BEIS) can go about unchallenged in the destruction of his legacy.
The pride Davey has from his time in office comes from an explosion in the deployment of renewable technologies, as well as boosting the number of competitors in the retail energy sector. Both of these have been threatened by subsequent regimes.
Solar subsidies have been cut in a “cack-handed” way, which has seen the sector stall and jobs lost. While admitting there was a need to scale back the money going to the technology, Davey states the execution was wrong, bordering on “immoral”.
Davey is willing to give some praise to current chancellor Philip Hammond for his understanding that investing in renewable technologies via private investment will help boost the economy and cut the country’s deficit. But, he says, the blocker to investing in energy, particularly green projects, is now coming from Number 10 – particularly the prime minister’s advisory team.
Davey, prodding the bar to vent his displeasure, slams the Number 10 team for “a lack of rigour and robust analysis and using intellectual brain cells”, saying policy appears to be based on “prejudice and ignorance”.
The competitive market is something that continues to remain close to his heart. He describes himself as a “liberal marketer” and highlights how there are now more than 50 suppliers in the electricity market, which he states is a competitive one, despite the conclusions of the Competition and Markets Authority (CMA) and indications from the government it will intervene.
He labels the CMA a missed opportunity for failing to look at the impact of other business models, such as demand-side response and energy efficiency, “but they weren’t interested in that”.
The threat of a price cap, resurrecting the 2013 price freeze pledge from Ed Miliband, disgusts Davey. He would much prefer the market, guided by principles-based regulation, to solve these problems and result in fairer prices for consumers.
Where government attention should be placed, rather than on implementing price caps, should be on the rollout of smart meters, he says.
Davey brings the conversation full circle by saying because of the tumultuous few months the government has experienced in the wake of the Brexit vote, attention has gone elsewhere and the smart meter programme has been forgotten. “They have taken their eye off the ball,” he says.
Criticism is easy to serve up, but less easy to take. But the former energy secretary holds his hands up – literally – when recognising his greatest failure while in office: the Green Deal.
The pay as you save energy scheme only saw 10,000 measures installed over its troubled lifetime. Davey almost goes as far to say it shouldn’t have gone ahead, but the political pressure to push it through as it had started its journey through parliament was too great.
Now out of the firing line, he says he has more time to spend with his family and to enjoy life. Working in the energy sector keeps his policy eye sharp and he is open to the notion of forming a cross-party group of former energy secretaries and ministers in an attempt to rebuild the political consensus, which he says has been destroyed by the combined efforts of Miliband and Osborne.
Davey’s life now affords him the luxury of not being caught up in this crossfire, and you’d think he’d be glad to be out of the Westminster bubble.
And yet, the temptation to go back remains. He fails to deny he’d stand again in the next election. Indeed, he is the Lib Dem candidate for Kingston and Surbiton if a snap election is called. He does admit he’d need to think “long and hard” about it, stating once more the benefits to his family of not being an MP.
It appears that, despite these significant benefits, which he says make for a much more relaxing life, the sight of his work being undone and the anger of having no say or influence on the Brexit fallout, means he could return to the ring.
Before he departs for a conference, the former political heavyweight lets slip that the anger he expresses may be a mask for something else much more concerning.
“When we’re going through a political climate with Brexit and Trump, it all seems quite irrational to me. People aren’t acting in predictable and coherent ways.
“It’s quite scary.”
Storage: “It is one of those things you can’t hold back, and it would be wrong to try and do that to a technology that could change everything.”
Solar subsidy cuts: “They’ve done it in a cack-handed way. It’s stupid, and arguably immoral because they’re playing with people’s lives. It was wrong in execution.”
George Osborne: “He doesn’t know anything about energy.”
Philip Hammond: “He is a clever man. He seems to care what the evidence says and about getting things right.”
Number 10: “I worry people at the top of our country will make bad decisions based on bad economics.”
Leaving Euratom: “This has to be the most crass, stupid, ill thought through, shooting oneself in the foot aspect of Brexit negotiations I’ve seen to date.”
The 2030 climate change package: “I don’t think it was a bad bit of diplomacy.”
The CMA’s energy probe: “It produced some not very good results. It was not quite what we were hoping for.”
Smart meter rollout: “It seems to me as if government has taken their eye off the ball.”
Hinkley Point C: “It is like any nuclear project before or since. They are always slower than people think.”
The end of the political consensus on energy: “Ed Miliband and George Osborne are unintended co-conspirators in undermining the political consensus we had.”
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