Enough is enough: this dash for gas has gone too far

Osborne's dogmatism will keep Britain hooked on expensive foreign imports and do nothing to tackle high fuel bills.

"Enough is enough", energy minister John Hayes proclaimed last week as he propelled himself into the headlines and a full-blown war of words over the future of British wind power. But unhelpful as his intervention was, his very public tussle with the Energy Secretary, Ed Davey, was a mere sideshow compared to murky dealings over energy policy going on behind closed doors in Whitehall, with the ministerial "quad" – David Cameron, Nick Clegg, George Osborne and Danny Alexander – expected to meet again soon.

This anti-wind rhetoric obscures another government agenda: a new dash for gas that will keep Britain hooked on expensive foreign imports and do nothing to tackle high fuel bills. This week, Friends of the Earth revealed that the coalition is preparing to write a blank cheque for the gas industry to build new gas plants. Outrageously, it’s exempting back-up gas power stations from the Levy Control Framework, a set of Treasury rules which restrict public spending on energy. The result is likely to be a huge rash of investment in gas, funded by taxpayers, which could see more gas power stations being built than are needed.

Friends of the Earth accepts that we need some gas as a back up while the UK makes the shift from fossil fuels to renewable energy, and this includes a small amount of unabated gas – without Carbon Capture and Storage – to be maintained as back-up capacity. But pledging unlimited sums of public cash for this end is madness. In effect, you and I could end up paying for gas power plants that, if run at full whack, risk busting our targets to tackle climate change. In fact, we could end up paying for them not to run at all, when the penny finally drops that too many have been consented, and all we’re left with is stranded assets.

So why are they doing it? The Treasury has pressed hard for these gas power stations to be exempt from the rules, and the Department of Energy and Climate Change (DECC) appears to have conceded without a fight. Nervous ministers may be listening to scare-mongering about renewable energy making the lights go out. But I suspect it has a lot more to do with the Chancellor, hell-bent on moving the government away from its green commitments at any cost to the economy, against the wishes of senior politicians and business including the CBI.

Let’s not forget the long string of free lunches that Osborne has handed to the gas industry over the past year. First came the announcement from the Energy Secretary in March that made green groups despair: "we can’t take our foot off the gas for some time yet". Davey was allowing new gas plants to pump out carbon at 450gCO2/kWh until 2045, which, given most modern gas plants emit just under 400g, was effectively a free permit to pollute for the next three decades.

I strongly suspect the decision was made by a novice minister under pressure from Osborne, without enough briefing from civil servants. It was accompanied by a pledge to develop a Gas Strategy, the rationale for which officials have privately conceded to be ‘because the gas industry felt left out’.

Then, in July, came news of a leaked letter to from the Chancellor to Davey, demanding the government issue "a statement which gives a clear, strong signal that we regard unabated gas as able to play a core part of our electricity generation to at least 2030". Cue a dutifully trotted out press release from DECC, the wording of which appeared to be practically lifted from Osborne’s letter. A few days later, the Chancellor’s father-in-law Lord Howell was exposed as an influential oil and gas lobbyist. The pieces of the jigsaw were slowly falling into place.

September saw more tax breaks for North Sea oil and gas, and an announcement that Osborne would consult over a new tax regime for shale. Then came Davey’s assurances to the gas industry in October that he expects 20GW of new gas to be built between now and 2030 – completely at odds with the Committee on Climate Change, which sees just 6.5GW of new gas by the same date.

It’s not hard to see who’s pulling the Energy Secretary’s strings. Taken together, these concessions add up to a covert strategy of support for gas by a Chancellor who appears in hock to the fossil fuel industry, whose economic calculations are frighteningly short-termist, and who sees green policies as a burden instead of an opportunity for growth.

The Treasury is lobbying hard to restrict future investment in clean energy through the upcoming Energy Bill, expected in Parliament this month. This is a once-in-a-generation opportunity to change the way we source our power for the next 20 years – and our booming green economy is at stake, which now accounts for almost a million jobs.

Enough is enough. It’s time for Cameron to stop the dash for gas in its tracks and urgently lay down a clear pathway for clean British energy.

Guy Shrubsole is energy campaigner at Friends of the Earth

Chancellor George Osborne is pushing for the government to restrict future investment in clean energy. Photograph: Getty Images.

Guy Shrubsole is energy campaigner at Friends of the Earth.

Ben Pruchnie/Getty Images
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Commons Confidential: Fearing the Wigan warrior

An electoral clash, select committee elections as speed dating, and Ed Miliband’s political convalescence.

Members of Labour’s disconsolate majority, sitting in tight knots in the tearoom as the MP with the best maths skills calculates who will survive and who will die, based on the latest bad poll, observe that Jeremy Corbyn has never been so loyal to the party leadership. The past 13 months, one told me, have been the Islington rebel’s longest spell without voting against Labour. The MP was contradicted by a colleague who argued that, in voting against Trident renewal, Corbyn had defied party policy. There is Labour chatter that an early general election would be a mercy killing if it put the party out of its misery and removed Corbyn next year. In 2020, it is judged, defeat will be inevitable.

The next London mayoral contest is scheduled for the same date as a 2020 election: 7 May. Sadiq Khan’s people whisper that when they mentioned the clash to ministers, they were assured it won’t happen. They are uncertain whether this indicates that the mayoral contest will be moved, or that there will be an early general election. Intriguing.

An unguarded retort from the peer Jim O’Neill seems to confirm that a dispute over the so-called Northern Powerhouse triggered his walkout from the Treasury last month. O’Neill, a fanboy of George Osborne and a former Goldman Sachs chief economist, gave no reason when he quit Theresa May’s government and resigned the Tory whip in the Lords. He joined the dots publicly when the Resolution Foundation’s director, Torsten Bell, queried the northern project. “Are you related to the PM?” shot back the Mancunian O’Neill. It’s the way he tells ’em.

Talk has quietened in Westminster Labour ranks of a formal challenge to Corbyn since this year’s attempt backfired, but the Tories fear Lisa Nandy, should the leader fall under a solar-powered ecotruck selling recycled organic knitwear.

The Wigan warrior is enjoying favourable reviews for her forensic examination of the troubled inquiry into historic child sex abuse. After Nandy put May on the spot, the Tory three-piece suit Alec Shelbrooke was overheard muttering: “I hope she never runs for leader.” Anna Soubry and Nicky Morgan, the Thelma and Louise of Tory opposition to Mayhem, were observed nodding in agreement.

Select committee elections are like speed dating. “Who are you?” inquired Labour’s Kevan Jones (Granite Central)of a stranger seeking his vote. She explained that she was Victoria Borwick, the Tory MP for Kensington, but that didn’t help. “This is the first time you’ve spoken to me,” Jones continued, “so the answer’s no.” The aloof Borwick lost, by the way.

Ed Miliband is joining Labour’s relaunched Tribune Group of MPs to continue his political convalescence. Next stop: the shadow cabinet?

Kevin Maguire is Associate Editor (Politics) on the Daily Mirror and author of our Commons Confidential column on the high politics and low life in Westminster. An award-winning journalist, he is in frequent demand on television and radio and co-authored a book on great parliamentary scandals. He was formerly Chief Reporter on the Guardian and Labour Correspondent on the Daily Telegraph.

This article first appeared in the 27 October 2016 issue of the New Statesman, American Rage