Tim Yeo is right to challenge Osborne's anti-green agenda

The Lib Dems need to resist the Chancellor's short-term thinking.

Tim Yeo, Conservative MP and chair of the energy and climate change select committee, has issued a stinging rebuke to George Osborne’s Treasury for their meddling in the design of the government’s flagship energy bill. He has called for Ed Davey’s department to "escape the control of the Treasury" which "has never been signed up to the green agenda".

Yeo’s select committee publish their pre-legislative scrutiny of the draft energy bill today. The report highlights the battle that Davey and DECC are losing to Osborne and the Treasury. Three major concerns are highlighted.

First, the proposed "contracts for difference," which are meant to encourage investment in low-carbon energy production, are criticised as "unworkable". Writing in today’s Financial Times, Yeo outlines how the simple, long-term contracts underwritten by the Treasury which were proposed in DECC’s original consultation "rang alarm bells in the Treasury". As a result they were "struck out of the draft bill" and replaced with "an alternative contract system so complex and confusing it may not be legally enforceable".

The committee go on to set out related concerns around the contractual regime. These include concerns that:

  • The reforms may squeeze smaller independent companies out of the electricity market resulting in even greater levels of market concentration;
  • A cap on green levies imposed by the Treasury may result in higher costs for consumers; and
  • The proposed process for setting the guaranteed price that nuclear generators can expect to receive for creating electricity "lacks sufficient transparency"

Second, Yeo’s committee says that the government should "set a clear target to largely decarbonise the electricity sector by 2030, giving investors certainty about the direction of energy policy." This follows pressure from a number of NGOs and think tanks, including IPPR, which submitted evidence to the review. The government’s advisory body, the committee on climate change, had stated that "the carbon intensity of power will need to fall from around 500g/kWh today to 50g/kWh in 2030". But the draft energy bill reduced this ambition by stating only that ‘power sector emissions need to be largely decarbonised by the 2030s’ with carbon emissions intensity at 100gCO2/kWh.

In our submission we stated that:

“The bill should be explicitly tied to the carbon budgets by setting a target to r educe the carbon intensity of the grid to 50gCO2/kWh by 2030. This is the most important step the government can take to provide certainty to industry about the direction for the energy market.”

The select committee has adopted our suggestion and recommends that:

“The Government should set a 2030 carbon intensity target for the electricity sector in secondary legislation based on the recommendation of the Committee on Climate Change.”

In a leaked letter, Osborne has explicitly called for Davey to reject this recommendation on grounds that it would be "inefficient" and "inflexible" and, instead, support polluting, "unabated gas" up to 2030 and beyond. Davey must reject his advice and heed Greenpeace’s warning that "the 2030 goal is the most significant test of the Lib Dems energy and environment credentials. If they cave in now they will be judged to have failed."

Third, the select committee report says the draft bill is "fundamentally flawed by the lack of consideration given to demand-side measures, which are potentially the cheapest methods of decarbonising our electricity system." They estimate that current policy is only delivering around one-third of the potential reduction in energy demand that is needed by 2030. Among other ideas they call for "the draft Bill to provide the Secretary of State with powers to introduce a Feed In Tariff for energy efficiency, if this cannot be achieved through existing legislation."

Yeo’s outspoken attack on the Treasury, which refused to give evidence to the select committee, shows that concerns about Osborne’s role extend deep within the Conservative party. But the report also shows that, once again, the Lib Dems are losing out to the Tories in Whitehall. To step out of the shadow of his predecessor, Davey must go back to the drawing board and develop proposals which will keep energy bills down, improve competition and encourage essential investment, rather than deferring to the short-term thinking of Osborne.

Conservative MP Tim Yeo said the Treasury had "never been signed up to the green agenda". Photograph: Getty Images.

Will Straw is Director of Britain Stronger In Europe, the cross-party campaign to keep Britain in the European Union. 

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Labour's establishment suspects a Momentum conspiracy - they're right

Bernie Sanders-style organisers are determined to rewire the party's machine.  

If you wanted to understand the basic dynamics of this year’s Labour leadership contest, Brighton and Hove District Labour Party is a good microcosm. On Saturday 9 July, a day before Angela Eagle was to announce her leadership bid, hundreds of members flooded into its AGM. Despite the room having a capacity of over 250, the meeting had to be held in three batches, with members forming an orderly queue. The result of the massive turnout was clear in political terms – pro-Corbyn candidates won every position on the local executive committee. 

Many in the room hailed the turnout and the result. But others claimed that some in the crowd had engaged in abuse and harassment.The national party decided that, rather than first investigate individuals, it would suspend Brighton and Hove. Add this to the national ban on local meetings and events during the leadership election, and it is easy to see why Labour seems to have an uneasy relationship with mass politics. To put it a less neutral way, the party machine is in a state of open warfare against Corbyn and his supporters.

Brighton and Hove illustrates how local activists have continued to organise – in an even more innovative and effective way than before. On Thursday 21 July, the week following the CLP’s suspension, the local Momentum group organised a mass meeting. More than 200 people showed up, with the mood defiant and pumped up.  Rather than listen to speeches, the room then became a road test for a new "campaign meetup", a more modestly titled version of the "barnstorms" used by the Bernie Sanders campaign. Activists broke up into small groups to discuss the strategy of the campaign and then even smaller groups to organise action on a very local level. By the end of the night, 20 phonebanking sessions had been planned at a branch level over the following week. 

In the past, organising inside the Labour Party was seen as a slightly cloak and dagger affair. When the Labour Party bureaucracy expelled leftwing activists in past decades, many on went further underground, organising in semi-secrecy. Now, Momentum is doing the exact opposite. 

The emphasis of the Corbyn campaign is on making its strategy, volunteer hubs and events listings as open and accessible as possible. Interactive maps will allow local activists to advertise hundreds of events, and then contact people in their area. When they gather to phonebank in they will be using a custom-built web app which will enable tens of thousands of callers to ring hundreds of thousands of numbers, from wherever they are.

As Momentum has learned to its cost, there is a trade-off between a campaign’s openness and its ability to stage manage events. But in the new politics of the Labour party, in which both the numbers of interested people and the capacity to connect with them directly are increasing exponentially, there is simply no contest. In order to win the next general election, Labour will have to master these tactics on a much bigger scale. The leadership election is the road test. 

Even many moderates seem to accept that the days of simply triangulating towards the centre and getting cozy with the Murdoch press are over. Labour needs to reach people and communities directly with an ambitious digital strategy and an army of self-organising activists. It is this kind of mass politics that delivered a "no" vote in Greece’s referendum on the terms of the Eurozone bailout last summer – defying pretty much the whole of the media, business and political establishment. 

The problem for Corbyn's challenger, Owen Smith, is that many of his backers have an open problem with this type of mass politics. Rather than investigate allegations of abuse, they have supported the suspension of CLPs. Rather than seeing the heightened emotions that come with mass mobilisations as side-effects which needs to be controlled, they have sought to joins unconnected acts of harassment, in order to smear Jeremy Corbyn. The MP Ben Bradshaw has even seemed to accuse Momentum of organising a conspiracy to physically attack Labour MPs.

The real conspiracy is much bigger than that. Hundreds of thousands of people are arriving, enthusiastic and determined, into the Labour party. These people, and their ability to convince the communities of which they are a part, threaten Britain’s political equilibrium, both the Conservatives and the Labour establishment. When the greatest hope for Labour becomes your greatest nightmare, you have good call to feel alarmed.