Climate control

When Ed Davey, the Lib Dem MP for Kingston and Surbiton and the UK Coalition’s Secretary of State for Energy and Climate Change, prepared to travel to Edinburgh to present the UK analysis paper on the implications for energy of independence, he was probably feeling quite positive. He had a good story to tell: stick with the Union and because we’re all in it together we can share the burden of green subsidies, keep energy bills down and at the same time, tackle climate change. Job done.

But then, he hadn’t banked on Lord George Robertson.

As Davey confidently took to the stage in Edinburgh with the Secretary of State for Scotland, Alistair Carmichael, by his side and armed with a speech that he felt oozed common sense and had the backing of sound independent analysis, the furore that followed the former secretary general of Nato’s speech to a high-profile audience in Washington, just days before, that independence would unleash the “forces of darkness” had still to die down.

So while Davey calmly presented the facts and figures, the stark realities of energy supply and demand, and generally talked up the positive case for staying together, the headlines were still screaming of Robertson’s prophecy of doom.

“I am here in Edinburgh today to make the case for the United Kingdom,” said Davey.

“And to make the case for Scotland’s place in the United Kingdom…

“Not just in an economic sense – but emotionally too. Together we are a great country. Greater than the sum of our parts.

“People always say that you never really miss something until it is gone. And I think that if we wake up on 19th of September to find that our United Kingdom has been sundered forever, we will regret it for the rest of our lives. And that is why, although this is a decision being taken by the Scottish people alone, all of us in the United Kingdom have a stake in the outcome. All of us have the right to be heard. Not bullied into silence, or scared off, or told we have no part in this, or our views don’t matter.”

Meanwhile, Robertson, a former Scottish Labour MP who served as defence secretary during Tony Blair’s first administration, was bullishly taking to the airwaves to defend his intemperate string of strongly-worded claims to the Brookings Institution, an influential liberal think tank in Washington.

Scotland leaving the UK would be, he said, a “pre-Christmas present” to “the forces of darkness”. He further warned that Scottish independence could lead to the “Balkanisation” of Europe and have a “cataclysmic” impact on the global balance of power.

Robertson thundered on and on. “The loudest cheers for the breakup of Britain would be from our adversaries and from our enemies. For the second military power in the West to shatter this year would be cataclysmic in geopolitical terms.
“If the United Kingdom was to face a split at this of all times and find itself embroiled for several years in a torrid, complex, difficult and debilitating divorce, it would rob the West of a serious partner just when solidity and cool nerves are going to be vital.

“Nobody should underestimate the effect all of that would have on existing global balances and the forces of darkness would simply love it.”

He further asserted that “the Northern Irish… would see a reappearance of old demons” if Scots voted Yes in the 18 September referendum.

And without irony, Robertson, now a senior counsellor at the Cohen Group, a global business consultancy, urged Scots to step outside of the “increasingly fractious bubble” of the referendum debate as he claimed that tearing the UK apart would give “the biggest pre-Christmas present of their lives” to “the dictators, the persecutors, the oppressors, the annexers, the aggressors and the adventurers across the planet”.

In the face of that tirade, Ed Davey’s appeal to not be silenced by bullies or his claim that Scots could face a £200 annual rise in their energy bills if they voted ‘Yes’ was kind of drowned out.

Davey, a relatively low-profile politician until his promotion to Secretary of State for Energy and Climate Change following Chris Huhne’s ignominious departure, is a close ally of Nick Clegg and viewed as a fairly decent bloke. He is certainly a more unifying force around the Coalition Cabinet table than Huhne – who was not liked by his Tory coalition partners – but found out the hard way that while he might be making serious inroads in controlling climate change – he calls himself a zealot in that regard – he has literally no control over the hot air generated by others, albeit even those on the same side in the independence debate.

But then as part of the Coalition, Davey has got used to pouring oil on troubled waters. On his first day in the job as Secretary of State he was handed a letter signed by more than 100 Tory backbenchers opposing government subsidies for onshore wind farms. The controversy over wind turbines in rural areas has been a running sore for many Tory MPs representing parts of the rural south and it was hoped that Huhne’s departure might open the space for a U-turn. They were disappointed.

Davey, a management consultant before he became an MP, has a relaxed air about him – he’s got his shoes off during our interview – but he does like to explain things in depth, often to the point of verbosity which can be frustrating in interviews as witnessed during a fairly uncomfortable 15-minute interrogation by broadcaster Andrew Neil on the BBC and now showing on YouTube about climate change. He likes to show the analysis, think about the argument and come to a conclusion based on head and not just heart. He’s classic Lib Dem.

However, he doesn’t fire up easily, which can sometimes make him seem a bit wet. But that doesn’t mean he lacks passion for the cause. It was, he says, a deep concern for the environment that first tempted him into politics and green issues are, he says, “part of what makes you a Lib Dem” and he certainly wasn’t going to be bullied into any kind of capitulation over his green principles by a bunch of disgruntled Tories. Last year Davey called climate change sceptics on the Conservative backbenches the “Tory tea party tendency”.

“Look,” he says. “They [the Tories] did vote for the Climate Change Act and they’ve not in any way, shape or form said they’re going to drop their support for that and by-and-large actually, despite all the noise, we’ve worked very well together and we work cross-party. I mean, the Energy Act 2013, which is a seminal piece of legislation, as important, I think, as the Climate Change Act itself, creates the world’s first-ever low carbon electricity market and that’s quite a big statement actually and it has cross-party support. So I’ve been able to work with Conservative colleagues to deliver but I’m not going to try and persuade you or others that there aren’t tensions, of course there are, but I think the biggest tension of all is over onshore wind.

“My first day in office I had a letter from 100 Conservative backbench MPs on onshore wind and they’ve continually argued for caps on onshore wind but I think that is yet another example of what the Liberal Democrats have achieved by being in this coalition because we have opposed a cap on onshore wind and there is no cap on onshore wind so if you want evidence of us keeping the renewable agenda going, working with our colleagues, but also being clear that we’re not prepared to compromise on things that are really important for all parts of the UK, that is it. I mean, Scotland’s got a very proud record of onshore wind and I’ve worked with Scottish colleagues in the Scottish Government very well on delivering that agenda but equally, I’ve stood up to Conservative colleagues here to make sure that onshore wind remains a critical part of our armoury.

"And I say to Conservative colleagues, ‘if you don’t invest in onshore wind and keep your climate change targets as you should, you’ll put up people’s bills’. Onshore wind is the cheapest form of renewable energy so if you drop onshore wind as one of your options that means higher bills.”

Last year The Sun newspaper reported that Prime Minister David Cameron had ordered aides to “get rid of all the green crap” from energy bills in a drive to bring down costs, sparking a furious reaction from campaigners who accused the PM of abandoning his promise to run the greenest government ever. How did Davey win that argument?

“Well, I’m glad you note that we did win the argument because that is true. There are two types of green subsidies. One is for what we call ‘social green subsidies’ which are things like helping the poorest with their energy bills. That has come off the bill but is still being paid through taxes. There are other social green levies which are about promoting energy efficiency, some of those were trimmed but we made up for it through taxes, through tax support. The green levies for green energy have not been cut at all. So we won that argument and I think we won it because we entered it in a constructive spirit.

"You know, I don’t want to see people’s bills rise if we can possible help it. [Davey reduced his own energy bills last year by switching his supplier from EDF to Sainsbury’s, saving himself £240 a year]. I’m determined to do everything I can, particularly for the most vulnerable and for people struggling with their energy bills, and from day one in this job, and indeed I would argue within the Coalition from day one, we have tried to make markets more competitive and tried to find new ways of helping consumers and therefore, I have no problem in looking at these levies and seeing if we can take some of the pressure off. But I had a bottom line. And that bottom line was: keep the support for renewable energy, we did and have no cuts to support for the fuel poor and they were not cut. So that’s why I think we won the argument. We were really clear on our values and our policies and we got that through.”

Are the Lib Dems just the nice bit of the Coalition?

“Yeah,” he laughs. “Well, I’m certainly not the nasty bit…What I would say is that it’s a privilege to serve in government and it is difficult working with another party, of course it is, we have differences, but the best way is to put them out on the table, debate them. And one thing I think is good about coalition government is that it’s actually more transparent. One party government actually, I think, is less effective because the person at the top of the tree, effectively, is saying what goes and obviously, they have to work with the people below them but in a coalition, that’s not how it works and that means there is a lot more considered analysis. You have to win your argument – you can’t just do it on prejudice.”
I wonder if it is easier for the Lib Dem side of the argument to win in the Coalition when one of them is the boss.

“Well, one thing that is clear and this goes for Conservative-led ministries as well as Liberal Democrat-led ministries, I think people realise the Secretary of State is in charge. So I’ll be fair to all my Conservative colleagues who have been ministers in my department, they have understood that the buck stops with me and this department. I take full responsibility for the decisions. I’ve worked really well with Conservative ministers: Michael Fallon, Greg Barker, Charles Hendry before Michael. John Hayes and I had a few issues but I still got on well with him personally. But we really clashed on onshore wind which is not a secret.

“The truth is, and this goes I would say whether I was working with the SNP, Labour or others, that there’s an awful lot of ground that is common. There is a space where you disagree, where your values and policies clash, of course there are, but there’s an awful lot of work where sensible, reasonable people will come to sensible, reasonable decisions and so, on a lot of what we do, it’s really quite easy to work with colleagues. And again, that might not be what people see or experience or what the media wants reporting but it happens to be true.

“In those areas where there’s difference, you tend to know them in advance and you are looking for compromise. There’s a bit of power-play, that’s what it’s about, isn’t it, I don’t think there’s anything wrong in that but what it does mean is you have to really make sure your arguments are honed, to prove that your arguments stand up and you’ve got to get the evidence. I guess one of the things I’ve learned from those discussions is – make sure your policy is evidence based. If someone comes up with a bad policy… I’ll give you an example of when I was in a different department, the Department of Business, and the Conservatives asked a guy called Adrian Beecroft to review employment legislation. He came up with the idea that bosses, employers, should be able to sack employees at will. I didn’t think this was a very good idea…”

Why would he think that?

“Well, I asked him for the evidence of why he thought this was a good idea,” laughs Davey. “And he told me ‘Mr Davey, it is self-evident’. Well, it wasn’t self-evident to me and when I asked about credit markets and mortgage markets and people needing to be able to borrow money for their housing and so on if they had more employment insecurity, he had to admit he hadn’t considered this at even what I would call a very basic level and I could go through a number of other areas which he clearly hadn’t considered. And the fact that I and my Lib Dem colleagues in coalition were able to say to our Conservative partners that while they seemed quite keen on this idea, they had no evidence that it was going to improve productivity, actually raise employment and so on, meant we were able to win the argument. I could give you many other examples where you can take the evidence and you can defeat bad arguments, climate change being the obvious one.”

What’s the evidence that independence for Scotland wouldn’t work?

“Ha, well, I would never say, and I don’t think the British Government says, that it wouldn’t work. Of course, Scotland is full of incredibly talented people with incredibly good resources so I think it would be completely wrong to say Scotland couldn’t be independent. The question is, ‘Is it better for Scotland to be independent?’ and from someone who considers myself first and foremost British, I’m unsurprisingly in favour of the Better Together campaign with Scotland better off in the United Kingdom and the United Kingdom better off with Scotland. I think there’s a mutual benefit. I believe the positive case for the Union is an extraordinarly strong case but that should not be read as a negative campaign just because we are asking people to say ‘No’ – it’s just we’re better off together.”

I suggest then that the ‘No’ camp might have got the tone wrong with Justine Greening, Secretary of State for International Development, having claimed that very day that the Third World would suffer if Scotland votes ‘Yes’, and this coming on top of the melodramatic comments from Lord Robertson.

“Well, I’m not Lord Robertson and frankly, I think the benefits are multiple and anything we can do together tends to be better. I think with the devolution settlement, and I’m someone that’s in favour of more devolution, it enables the innovations and differences between different parts of the United Kingdom to develop, to flourish, to challenge and have the competition between different nations of the United Kingdom. But where coming together for our British identity and for the economies of scale and for the complexities of the world, coming together is beneficial for everybody then we do that.

"I haven’t studied the international development issue which you mention but I could imagine that we’ll go further through economies of scale and the energy market in the United Kingdom is incredibly integrated, is a complex market, and to pull that apart… to have a separate regulator for Scotland (energy regulator), separate regulator for the UK, inevitably, different policies… that integration we have now delivers more secure energy, cheaper energy, help us to go green in an easier way, that will be lost. And what’s interesting is the SNP and the British Government agree that there is real benefit from an integrated, single market. What the SNP don’t seem to realise is that if there are two governments, two regulators, what is a very closely integrated market at the moment is, inevitably, going to be put asunder. It’s not that we wouldn’t want to trade with Scotland in energy, of course we would.

"It’s not that we wouldn’t want to keep as much as we can but if you look at the way Europe’s single market is being delivered, it’s difficult, and different member states inevitably have different approaches and in the treaties with the European Union energy is a reserved matter for the member states. There are some parts that are shared with the European Union but a lot of it is at the member state [level]. So inevitably, what is good about the Union for energy would be lost and I think that’s a fact.

“I think it’s inevitable in a vigorous democratic exercise of a referendum that there’ll be different arguments from both sides but what we’ve tried to do with these Scotland Analysis papers, certainly in terms of what we did in energy, was just lay out the facts for people to read so they can come to their own conclusions. What was very noticeable was Fergus [Ewing, Scotland’s energy minister] was unable to challenge the facts that we put down. I’ve seen not a single thread of argument or evidence-based analysis that challenges what we published. Not a single one.

"I’d be very happy for people to show it to me then we could analyse it but we were very clear when we set that paper that we wanted to make sure that every figure we placed in it was robust. So the minimum that we said the bills would go up by was £38. It’s not a massive figure but it’s still important if you are on a low income. And that figure results from the subsidies the rest of the United Kingdom pays for parts of northern Scotland where it’s more difficult for electricity and gas transmission to get and we pay that because we’re part of the same family. If we were divorced, we wouldn’t pay, it would we?
Scots also contribute to those subsidies, though?

“They do, they do, but at the moment the subsidies for these two schemes are smeared across thirty-million households and businesses. In independence, it would be three million. So yes, there would be a sharing of subsidies but it would be across three rather than thirty million and obviously, the bills for those three million would go up significantly. That’s where the contribution of £38 comes from. The other big part was transmission lines. At the moment, because we’re all part of the same network, the UK as a whole, the UK consumer as a whole, pays for transmission, distribution, network and investment. So Scotland’s getting a very big slice of the total UK investment over the next ten years, about six billion pounds. If that was just paid for by Scottish consumers, that would obviously cost more than if it was smeared across thirty million. So the £38 figure is a really rock-solid figure.

“We then looked at other figures, the cost of renewable subsidies in particular, and it is impossible to say whether after independence Scottish consumers alone would bear 100 per cent of those costs, so I didn’t say that in the paper because it may be they’ll be able to see what are called renewable energy credits and so maybe they’ll be able to make other nations bear some of that cost. I think that’s unlikely by the way, but because it is possible, I didn’t over-claim.

“Now Fergus has made the point about nuclear so let’s really deal with that because it’s an interesting one. Scotland currently has about a third of its power from civil nuclear. The SNP has made it clear that once those power stations come to the end of their life they won’t be replaced so they’ll have to replace a third of their energy from somewhere and they’ve said it would be renewables. Well, that really means either onshore wind, solar, tidal or offshore wind – wave’s a long way off. Now onshore wind, Scotland has a huge amount and is planning to use a huge amount but it’s unlikely that it would be able to generate all that amount. It can do a lot but we’re talking an awful lot. Solar has got some potential but it’s not as sunny as perhaps some parts of the United Kingdom. Tidal, it’s got some and that could potentially be good but it’s some way off yet and the costs are unclear.

"The most likely technology that could produce the sorts of energy you would need is offshore wind but the cost of offshore wind at the moment is significantly higher than civil nuclear. I hope, and I believe, that we’ll get the cost of offshore wind down but I don’t actually have a crystal ball to know what the cost of offshore wind will be and the cost of civil nuclear will be in maybe the middle of the next decade. My guess is we’ll get offshore wind down faster than we’ll get nuclear down but because nuclear is significantly cheaper than offshore wind at the moment, it may be that by 2025, possibly even 2030, nuclear will still be cheaper than offshore wind. So Fergus and the SNP try to make out that nuclear power is more expensive than renewables but they fail to give people the full story and I think that’s simply not acceptable.

“The one thing I know about energy policy and climate change policy is I am not divine, I don’t know everything but I hear a lot of people commenting who seem to think they do know everything. The energy brief is littered with people saying things that haven’t come true so I think we should approach the debate about energy with a degree of humility. Not pretending to people we know everything and explaining that there are degrees of uncertainty. Explain the world as we currently know it and not how we would like it to be. And as we currently know it, Scotland would have to make an awful lot of offshore wind and tidal energy, the price of which is very expensive at the moment.

"Now I am passionate about offshore wind, I am passionate about tidal, and I will do everything in my power to make sure there are offshore wind farms in Scotland, tidal power in Scotland. As Secretary of State for the United Kingdom on Energy and Climate Change, I am a passionate supporter of renewables but I also want to make sure that as we go green, we have competition between low carbon technologies and as we go green, it’s affordable for people. And I think the way that Fergus and his SNP colleagues present it is incorrect. They speak in certainties and I just don’t think that’s the case.

“They’ve got an attachment to this idea of independence which some may describe as a romantic attachment, some may think that it’s a democratic project, but if they were being honest, I think the argument for Scottish independence would be for them to say, ‘yes, it is going to cost you more, yes, it will be more challenging but we’ll be in charge of our own future without the English, Welsh and Northern Irish getting in our way’. Now my response to that is well, it will cost you more but I’m glad they’re now at last admitting it because that’s what the facts say. That would be an honest debate.”