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What Michael Fallon can do to prove his green credentials What Michael Fallon can do to prove his green credentials
(6 months later)
David Cameron's decision to move the erstwhile energy minister John Hayes to a made-up role in the Cabinet Office shows the prime minister has finally understood the damage to business confidence that his tenure in the Department of Energy and Climate Change has caused over the past seven months. This much is positive.David Cameron's decision to move the erstwhile energy minister John Hayes to a made-up role in the Cabinet Office shows the prime minister has finally understood the damage to business confidence that his tenure in the Department of Energy and Climate Change has caused over the past seven months. This much is positive.
We are told that his replacement, Michael Fallon, will double up and retain his role as business minister. While some may argue that this is to leave the DECC hopelessly under strength to carry the energy bill through parliament and to deliver the £200bn overhaul needed in our energy infrastructure, it must be acknowledged that a minister who can ride these two horses would bring a much-needed ability to integrate energy into our wider industrial policy.We are told that his replacement, Michael Fallon, will double up and retain his role as business minister. While some may argue that this is to leave the DECC hopelessly under strength to carry the energy bill through parliament and to deliver the £200bn overhaul needed in our energy infrastructure, it must be acknowledged that a minister who can ride these two horses would bring a much-needed ability to integrate energy into our wider industrial policy.
But restoring the confidence of business and the public in UK energy policy will take more than the swapping of one minister for another. Lessons must be learned from the failures that have led to damaging policy delays and constant criticism of the department from the UK's largest businesses. John Hayes seemed to make a point of ignoring anything that didn't fit with his politics – no matter whether it came from the independent Committee on Climate Change or from the energy companies themselves. Michael Fallon will have to listen more carefully to their views if he is to avoid his predecessor's mistakes.But restoring the confidence of business and the public in UK energy policy will take more than the swapping of one minister for another. Lessons must be learned from the failures that have led to damaging policy delays and constant criticism of the department from the UK's largest businesses. John Hayes seemed to make a point of ignoring anything that didn't fit with his politics – no matter whether it came from the independent Committee on Climate Change or from the energy companies themselves. Michael Fallon will have to listen more carefully to their views if he is to avoid his predecessor's mistakes.
Unfortunately, Fallon's previous track record on listening may best be described as "selective deafness". Speaking in the budget debate last year he challenged whether specific targets on climate change "are the best way of focusing our spending where it is most needed". This will be unlikely to endear him to the six multinational technology leaders who recently wrote to the chancellor in support of setting a 2030 decarbonisation target before 2016. They made a robust business case, saying that "postponing the 2030 target decision until 2016 creates entirely avoidable political risk. This will slow growth in the low carbon sector, handicap the UK supply chain, reduce UK R&D and produce fewer new jobs."Unfortunately, Fallon's previous track record on listening may best be described as "selective deafness". Speaking in the budget debate last year he challenged whether specific targets on climate change "are the best way of focusing our spending where it is most needed". This will be unlikely to endear him to the six multinational technology leaders who recently wrote to the chancellor in support of setting a 2030 decarbonisation target before 2016. They made a robust business case, saying that "postponing the 2030 target decision until 2016 creates entirely avoidable political risk. This will slow growth in the low carbon sector, handicap the UK supply chain, reduce UK R&D and produce fewer new jobs."
Investors are seeking clarity on long-term political commitment post 2020 when the current suite of targets expires. Supply chain investment decisions require confidence that production facilities built now at a cost of millions of pounds are going to produce an investment return well into the next decade. If the new minister wishes to show that he understands this, then he can make a profound impact on his new department by announcing his support for a 2030 decarbonisation target as set out in the crossparty amendment tabled by myself and Tim Yeo.Investors are seeking clarity on long-term political commitment post 2020 when the current suite of targets expires. Supply chain investment decisions require confidence that production facilities built now at a cost of millions of pounds are going to produce an investment return well into the next decade. If the new minister wishes to show that he understands this, then he can make a profound impact on his new department by announcing his support for a 2030 decarbonisation target as set out in the crossparty amendment tabled by myself and Tim Yeo.
This would be an excellent signal that the government sees energy policy as a driver of sustainable economic growth, and has at last recognised the fact that green growth is providing one-third of all growth in the UK.This would be an excellent signal that the government sees energy policy as a driver of sustainable economic growth, and has at last recognised the fact that green growth is providing one-third of all growth in the UK.
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