Sunak scraps BEIS

The Department for Business, Energy and Industrial Strategy (BEIS) has been broken up as part of Rishi Sunak’s Cabinet reshuffle.

The prime minister has unveiled a new Department for Energy Security and Net Zero, which will be led by Grant Shapps, previously the BEIS secretary.

Meanwhile, the former international trade secretary, Kemi Badenoch, has been named the new secretary of state for business and trade. Former energy minister Greg Hands becomes the new Conservative party chairman.

The government reorganisation has also resulted in the creation of a new Department for Science, Innovation and Technology.

The reshuffle brings the government closer to the structure already adopted by Labour, which has Ed Miliband in the shadow climate change and net zero role and Jonathan Reynolds as shadow business secretary.

Sunak said the new energy department has been tasked with “securing our long-term energy supply, bringing down bills and halving inflation”. The announcement unveiling the reshuffle said it reflected the impact of the Ukraine conflict on power prices and “the need to secure more energy from domestic nuclear and renewable sources as we seize the opportunities of net zero”.

Shapps professed himself “delighted to become the first secretary of state for the new Department for Energy Security and Net Zero”. He added: “My focus will be securing our long-term energy supply, bringing down bills and thereby helping to halve inflation.”

The creation of the new department fulfils a commitment by Sunak, when he was running to become Conservative Party leader last summer, to set up a dedicated ministry to focus on energy matters.

However, Miliband responded to the announcement by saying: “So seven years after the disastrous decision to abolish the Department of Energy, the Conservatives now admit they got it wrong, but a rearranging of deckchairs on the sinking Titanic of failed Conservative energy policy will not rescue the country.”

Graham Stuart retains his role as minister of state for the new department, joined by Andrew Bowie, who moves over from international trade to become parliamentary under secretary of state. Lord Callanan survives another reshuffle to continue as the department’s lead in the House of Lords.

Meanwhile, Jeremy Pocklington will become permanent secretary, the most senior official, at the new energy department. Sarah Munby moves across to the science, innovation and technology department.

Pocklington was director general, energy and security at BEIS for nearly two years until 2018, prior to which he was director general of the markets and infrastructure group at DECC.

Before today’s government shake-up, he was serving as permanent secretary at the department for levelling up, housing and communities.

BEIS has existed since 2016 when it was created by the merger of DECC (Department of Energy and Climate Change) with the Department for Business, Innovation and Skills.

Reaction

Following the government’s announcement, House of Commons Environmental Audit Committee Philip Dunne tweeted that he was “encouraged” to see net zero recognised in the name of the new department.

But Mike Clancy, general secretary of the Prospect union, warned that a departmental re-organisation should not distract ministers from pressing decisions on energy policy.

He said: “Ensuring we are able to deliver a secure, safe, zero carbon energy system is the primary challenge facing government.

“The new department needs political as well as institutional stability in order to deliver a just transition to net zero, so that no communities or workers are left behind.

“A major reorganisation in government though must not distract ministers from the pressing decisions they need to make on setting up a fully funded Great British Nuclear. The country and industry cannot afford any more kicking the can down the road on this.”

And Lisa Fischer, energy expert at climate change think tank E3G, expressed concern at Sunak’s decision to split responsibility for business and net zero in the new department.

She said: “A separate energy department if linked with climate can give useful prominence and focus to the energy transition. This would be moving into the opposite direction of many European governments, which recognised that the energy transition is part of an economic modernisation. They instead look to align the mission of economic ministries with the energy transition. Sunak’s new set-up only works if he makes the energy transition a Prime Ministerial priority instead.”

Energy UK’s chief executive Emma Pinchbeck said the trade body had long called for a dedicated energy department “because of the pivotal importance of energy for every home and every business in the country – and the UK economy – and because of the scale of work needed to achieve a secure low carbon energy system and to deliver affordable bills for customers”.

She added: “While this focused new department is welcome, its significance depends on whether we now see the urgent progress we are calling for, right now, to help with the ongoing energy crisis and to make sure the UK maintains its market position as a leader in net zero investment and infrastructure.”

Ross Easton, interim chief executive of the Energy Networks Association (ENA) also welcomed the prime minister’s recognition that these “substantial topics” warranted a standalone department.

However, he added: “That said, the proof is not in the name or the Whitehall machinery, but in the delivery of high-quality policy which supports safe, secure, sustainable and reliable energy supplies for customers – now and in the future. That is the real test. We are looking forward to working with the secretary of state and his team to deliver this.”

Tom Lowe, founding director of Thermal Storage UK, said: “While we welcome today’s reshuffle, the UK will only decarbonise heating by businesses innovating to improve buildings and heating systems. The three new departments focusing on energy, innovation and business must work together closely to enable net zero. We look forward to the government’s updated Net Zero Strategy before Easter.”

He added: “The government is absolutely right to give the new energy department a priority to improve the energy efficiency of UK homes, businesses and public sector buildings. To meet the 15% demand reduction ambition means launching ECO+, rolling over the Boiler Upgrade Scheme funding, developing standards for Energy Smart Appliances and reforming EPCs to incorporate heat flexibility.”