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.

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Why Angela Merkel's comments about the UK and US shouldn't be given too much weight

The Chancellor's comments are aimed at a domestic and European audience, and she won't be abandoning Anglo-German relationships just yet.

Angela Merkel’s latest remarks do not seem well-judged but should not be given undue significance. Speaking as part of a rally in Munich for her sister party, the CSU, the German Chancellor claimed “we Europeans must really take our own fate into our hands”.

The comments should be read in the context of September's German elections and Merkel’s determination to restrain the fortune of her main political rival, Martin Schulz – obviously a strong Europhile and a committed Trump critic. Sigmar Gabriel - previously seen as a candidate to lead the left-wing SPD - has for some time been pressing for Germany and Europe to have “enough self-confidence” to stand up to Trump. He called for a “self-confident position, not just on behalf of us Germans but all Europeans”. Merkel is in part responding to this pressure.

Her words were well received by her audience. The beer hall crowd erupted into sustained applause. But taking an implicit pop at Donald Trump is hardly likely to be a divisive tactic at such a gathering. Criticising the UK post-Brexit and the US under Trump is the sort of virtue signalling guaranteed to ensure a good clap.

It’s not clear that the comments represent that much of a new departure, as she herself has since claimed. She said something similar earlier this year. In January, after the publication of Donald Trump’s interview with The Times and Bild, she said that “we Europeans have our fate in our own hands”.

At one level what Merkel said is something of a truism: in two year’s time Britain will no longer be directly deciding the fate of the EU. In future no British Prime Minister will attend the European Council, and British MEPs will leave the Parliament at the next round of European elections in 2019. Yet Merkel’s words “we Europeans”, conflate Europe and the EU, something she has previously rejected. Back in July last year, at a joint press conference with Theresa May, she said: “the UK after all remains part of Europe, if not of the Union”.

At the same press conference, Merkel also confirmed that the EU and the UK would need to continue to work together. At that time she even used the first person plural to include Britain, saying “we have certain missions also to fulfil with the rest of the world” – there the ‘we’ meant Britain and the EU, now the 'we' excludes Britain.

Her comments surely also mark a frustration born of difficulties at the G7 summit over climate change, but Britain and Germany agreed at the meeting in Sicily on the Paris Accord. More broadly, the next few months will be crucial for determining the future relationship between Britain and the EU. There will be many difficult negotiations ahead.

Merkel is widely expected to remain the German Chancellor after this autumn’s election. As the single most powerful individual in the EU27, she is the most crucial person in determining future relations between the UK and the EU. Indeed, to some extent, it was her intransigence during Cameron’s ‘renegotiation’ which precipitated Brexit itself. She also needs to watch with care growing irritation across the EU at the (perceived) extent of German influence and control over the institutions and direction of the European project. Recent reports in the Frankfurter Allgemeine Zeitung which suggested a Merkel plan for Jens Weidmann of the Bundesbank to succeed Mario Draghi at the ECB have not gone down well across southern Europe. For those critics, the hands controlling the fate of Europe are Merkel’s.

Brexit remains a crucial challenge for the EU. How the issue is handled will shape the future of the Union. Many across Europe’s capitals are worried that Brussels risks driving Britain further away than Brexit will require; they are worried lest the Channel becomes metaphorically wider and Britain turns its back on the continent. On the UK side, Theresa May has accepted the EU, and particularly Merkel’s, insistence, that there can be no cherry picking, and therefore she has committed to leaving the single market as well as the EU. May has offered a “deep and special” partnership and a comprehensive free trading arrangement. Merkel should welcome Britain’s clarity. She must work with new French President Emmanuel Macron and others to lead the EU towards a new relationship with Britain – a close partnership which protects free trade, security and the other forms of cooperation which benefit all Europeans.

Henry Newman is the director of Open Europe. He tweets @henrynewman.

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