Lobby: Blue blood at the Conservative party conference

It was meant to reboot her government, but the Conservative party conference almost spelt the end of Mrs May, says David Blackman.

Party conferences often feel like they are happening on a different planet, compounded these days by the tall security barriers that are deemed necessary in a world transformed by acts of terror.

However, even inside the secure zone at the Conservative conference, it was hard to ignore the gales that hit Manchester on Monday (2 October).

Those same winds helped to generated nearly one-third (32.6 per cent) of UK electricity output on the day, contributing to the record low carbon intensity figure reported for a 24-hour period.

And at the conference it felt like the winds of change were blowing just as virgorously hrough energy policy.

The showstopper was prime minister Theresa May’s promise of legislation to crack down on energy bills. Amid the coughs and splutters that plagued her showpiece appearance, she announced that the government would legislate to curb energy bills (see box, p8).  

The proposed energy price cap was a key element in May’s bid to reboot a government agenda that has been characterised by drift and infighting since June’s general election. The move addressed the underlying debate gripping the conference’s fringe, where delegates are able to speak their mind a lot more freely than at the stage-managed main event. And the big question for activists was why the Conservatives had failed to perform well enough at June’s snap general election.

Delivering cheaper energy bills is seen by some Tories as one route out of their woes.  Others focus on taking a more positive approach to tackling climate change.  

Following the 2015 election, the Conservatives slashed subsidies for onshore wind and solar, while making it harder to secure planning permission for such projects.

Matthew Knight, offshore wind director of business development for Siemens UK, told one fringe meeting that “Conservatives should have a great reputation for environmental stewardship, but unfortunately a small number of very noisy people have banged on about stuff that has been debunked long ago. The rest of us should ignore the climate change deniers and get behind the people who are building this green, decent economy”.

One of the main things worrying Conservatives is the party’s poor showing among younger voters, for whom environmental issues are a big concern, according to Sam Hall, an associate director at Bright Blue.

At a conference fringe event, he cited polling carried out by the liberal Tory thinktank showing that climate change was the top concern among 18 to 24-year-olds.

At the same meeting, BEIS (the Department for Business, Energy and Industrial Strategy) secretary of state Greg Clark made the case for environmentalism and conservatism going hand in hand. “A commitment to environmentalism and to being an optimistic and progressive force for the environment is an essential part of the mainstream Conservativism that we must adopt,” he said.

Referring to his own work helping to reshape Tory environment policy under former party leader David Cameron, Clark said the Conservatives should be “proud” of their record on the environmental agenda. He said: “If we just adopt things for differentiation, it’s not a good strategy because they won’t be lasting.”

He was backed up by energy minister Richard Harrington. The two are long-term friends, dating back to the 1980s when they were both members of the long defunct Social Democrat Party.

This centre politics heritage helps to explain why Harrington was keen to bang the drum for consensus on energy policy.

He said that until recently enthusiasm for environmental issues was seen as an “electoral ploy” by many Tories, who were turned off what they saw as a public relations stunt by Cameron when he took his famous trip to the Arctic.

But he said mainstream opinion within the party had moved on from what he described as this “cynical” interpretation.

Part of the reason why Conservatives can feel a bit more comfortable about embracing a low carbon agenda is the falling cost of renewable generation, seen most visibly in last month’s auction for offshore wind, which Harrington said had vindicated the government’s financial backing for renewable technologies.

“It’s a legitimate use of government money to kickstart what we think will be world class businesses,” he said.

Harrington felt sufficiently emboldened to flag his open-mindedness to onshore wind, which would once have been a taboo topic among the Tory grassroots.

He commented that there was “no reason” why onshore wind should not enjoy a “level playing field” with other sources of electricity generation, provided that it went through the planning process.

Even carbon capture and storage (CCS), which had the rug pulled out from underneath it by ex-chancellor George Osborne two years ago, is back on the agenda for the upcoming clean growth strategy, due to be published in the next few weeks. However, while he said CCS was “not forgotten about”, Harrington added that “progress has been slower than we would have hoped”.

A warmer embrace of low-carbon energy did not equate to a blank cheque for the more expensive and experimental technologies, the minister cautioned.

Directly addressing his predecessor as energy minister, Charles Hendry, who submitted a report earlier this year championing the Swansea Bay tidal lagoon, said every government had limited resources to commit to subsidies.

Harrington said the point of subsidy was to get technologies to a point where they could stand on their own two feet, as had been achieved with offshore wind. “The concern is that sections of industry think that there is a long-term entitlement to subsidy,” he added.

Harrington also gave some succour to the nuclear industry, which has been battered by negative headlines in the wake of the recent contracts for difference auctions, which showed such a dramatic fall in the cost of energy.

“We won’t accept that just because wind has come down so much, which is fantastic, that that suddenly rules out nuclear. Our policy is to have a mix of different sources of energy,” he said.

 

The Conservative promise to cap SVTs

It was clearly designed to capture the public’s attention, showing that Theresa May’s commitment to helping what she dubbed the “just about managing” wasn’t just warm words.

Instead, the energy price cap legislation plan announced in the prime minister’s speech to the Conservative party conference was literally muffled by May’s croaking delivery.

The bill won’t set a cap. Instead, according to a briefing note issued by Conservative party HQ to accompany May’s speech, the draft legislation will give Ofgem beefed up powers to introduce a market wide cap on standard variable tariffs (SVTs). And any cap would only be in place for a temporary period, the note says, while the smart meter rollout beds in.

The bill is designed to address the concern voiced by the energy regulator that it lacks the legal authority to cap all customers’ bills, which business secretary Greg Clark asked it to do in the summer.

However, getting legislation through parliament will take time. There is solid support for price caps across the political spectrum, with the Democratic Unionists, Labour and the Scottish National Party all backing the idea in their recent election manifestoes.

Nevertheless, any parliamentary vote is an invitation for opposition parties to make mischief with a government that lacks a stable majority.

This is particularly the case in the febrile political environment where even apparently unrelated issues risk becoming proxies for the broader debate about the UK’s withdrawal from the European Union.

Added to that, Brexit means there is simply less parliamentary time for any other legislation.

Clark is still keen to persuade Ofgem to overcome its reservations about using its existing powers to introduce a cap on SVTs.

Less than 12 hours before May’s announcement, in an interview at a fringe event (see Q&A, right), Clark reiterated his view that going down this route would be a much quicker way to lower customers’ bills.

Clark has shown before in his ministerial career that he is adept at cutting deals with important interest groups. Perhaps he hopes that the threat of legislation will push Ofgem to set aside its concerns.

 

Q&A Greg Clark: Energy secretary: The future of nuclear power

At a Conservative party conference fringe event, energy secretary Greg Clark answered questions from the nuclear industry lobby about the future of nuclear power in the UK – and his own future in government.

What is the future of the UK’s nuclear safeguarding arrangements post-Brexit?

“If there was ever a policy area in which there was an overwhelming common interest in having sensible arrangements in place between us and our European neighbours, it is the nuclear sector. There is no advantage having a fractured relationship: having a cordial and smooth set of relationships is important at every level. We host many of Europe’s most prestigious research and development facilities and with the Hinkley Point C power station, EDF has a big interest in keeping those arrangement as smooth as possible.”

Will nuclear be sidelined as too expensive following the fall in offshore wind prices?

“It’s fantastic news that prices have dropped: it’s a dividend from a strategic approach where we took the view to not only drive down the costs of offshore wind but create industrial benefits. As the price comes down, that will be a benefit to consumer bills.

“But you need to have a mix. Winston Churchill talked about diversity alone and diversity alone being the guarantor of energy security. There will always be times when the wind isn’t blowing and the sun isn’t shining.”

With a lot of coal and nuclear power stations coming to the end of their life, do we need fast-track planning for energy projects?

“We don’t have exclusive foresight of these opportunities: every other country in the world sees the potential of them. We need to be more agile than we have been and that includes planning and getting the right rules in place.”

How can the nuclear skills gap be remedied?

“If we are inaugurating a new generation of nuclear power stations there is a whole set of requirements that flow. We need trained engineers and technicians. As a consequence of not having had a nuclear programme for a generation, a lot of them are close to retirement or have to be brought in from elsewhere. Part of the agreement for the Hinkley Point C power station was to create new skills that would be available for the whole industry.”

Do you have ambitions for promotion within government?

“With every job from becoming a Member of Parliament to becoming a minister, I was so thrilled that I have thrown myself into it. I don’t intend to look around.”


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