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Fully energised

Fully energised

The issues of energy and climate change are joined at the hip in Westminster - but they do not always make comfortable bedfellows.

On the one hand, they are an obvious match - but the combination of a rising proportion of household income going on fuel bills and a debate over the most responsible, sustainable and affordable methods of keeping the lights on, has meant any politician involved walks a delicate tightrope.

This provokes an - at times intense - debate over to what extent the environmental agenda has to make way for the economic argument - for a government that has set itself the goal of not only restoring the nation’s finances, but also becoming the ‘greenest government ever’.

The last year has seen the screw turned even tighter - with the Treasury and Department of Energy and Climate Change at loggerheads over subsidies for renewable energy technology, Chancellor George Osborne’s promise to make the UK a “gas hub” and rows, both UK-wide and in Scotland, over wind power and its impact on the environment.

Tim Yeo - who is chairman of Westminster’s Energy and Climate Change Select Committee and a former Environment Minister under John Major, is certainly on the Tory Party’s green wing.

However, this is not a case of ‘going green’ at any cost.

Yeo’s support for renewables saw him win the ‘Politician of the Year’ accolade (shared with Zac Goldsmith) in the inaugural BusinessGreen Leaders Awards in 2011, but he has backed (albeit with certain provisos) the pursuit of shale gas -something which environmental campaigners are dead against.

He also backs onshore wind, but at the same time, those communities who are concerned about over-development.

And he was an advocate of introducing targets to reduce carbon intensity as part of the latest Energy Bill, but last year challenged Prime Minister David Cameron to prove whether he was “man or mouse” over whether Heathrow airport should be expanded - coming out firmly in favour of building a third runway.

Under his stewardship, Yeo’s committee has developed a reputation as a thorn in the Government’s side.

In July last year its report into the draft Energy Bill warned the Government was in danger of “botching” plans for greener energy because it said the Treasury was refusing to back new investment in nuclear, carbon capture and storage technology - and renewable sources like wind and wave.

Energy Secretary Ed Davey, his predecessor Chris Huhne and other ministers in the department have faced robust questioning from members of the committee.

Scotland’s Energy Minister Fergus Ewing was also given a tough time by its members when it questioned him about the potential impact of Scottish independence on energy - where Yeo claimed the success of the SNP had led to uncertainty in the energy industry - although he praised the country’s ambitious renewables targets.

Our first conversation in his office in Whitehall, his window has a glorious view of the Palace of Westminster, where Yeo has spent his 30 years in politics and his room includes several artworks painted by his professional artist son Jonathan - some are of him, but one is of Hollywood hellraiser Dennis Hopper - painted at the behest of the Easy Rider iconic figure himself.

The interview takes place just a week before the Energy Bill is finally published after long delay and he told Holyrood about the impact he believed his committee has had.

“I’d like to think that one of the reasons why my committee has been probably heard more clearly and loudly is because of the quality of the work we’ve done,” he says.

“I think people recognised that we are objective, our reports are very much evidence based.

“We’ve got onto issues very early; we looked straight away at the implications of the Gulf of Mexico accident - and incidentally, entirely validated the UK regulatory approach which is far superior to the American one and therefore only recommended very small changes.

“We were very early onto shale gas - and again, came up very strongly in favour of Britain developing shale gas reserves. More than 18 months on and the Government is still trying to make up its mind.” In terms of which is the more important - the energy issues or climate change - he says the two are completely intertwined, but does say that energy issues have forced their way up the agenda, partly because of the rising costs. “The average household now has to pay a much bigger proportion of their household income on energy than it did ten years ago,” he said.

But he adds: “Countries now see energy as almost a branch of foreign security policy, because modern life, both domestically and in business, depends firstly on a continuous supply of electricity and secondly, on the availability of other energy sources. Energy policy has become much more economic policy than it was before.

“Thirdly, many of us still believe, looking across the first half of the 21st century, climate change is the biggest challenge that the world has to face; the solution is very heavily dependent on energy policy, given that such a big proportion of greenhouse gas emissions come from electricity generation, transport and so on.” How to reduce those emissions has provoked considerable controversy - especially over the use of wind turbines - Yeo is a keen supporter of further developing wind technology but says: “I fully respect the concerns of people who have got very unspoiled views and beautiful landscapes to look at - they do not want to see those damaged by the construction of wind turbines - just like in my constituency at the moment the National Grid want to build some overhead pylons and I am supporting the objectors.

“But I think you have to recognise that onshore wind turbines are quite possibly going to become economically almost competitive in ten years - they may not need any kind of subsidy at all - because the technology has improved.

“Offshore, in my view, is always going to require some subsidy because the costs are going to be significantly higher than onshore.” His solution to the arguments over wind - which has seen protest groups set up all across the UK, including the latest ‘Scotland Against Spin’, he says there should be more incentives available to the communities affected.

“We should say quite clearly that we will not impose wind turbines on any communities who do not want them, we will give them a final veto that means if the people want to say no, they can say no.

“What we should do is make it possible for developers to offer incentives to people. The planning system already allows [us] to share the community benefit of a particular development.

“I think we could be more creative in relation to a variety of energy developments - for example saying, if you are willing to accept the construction of wind turbines we will freeze your electricity price for maybe 10 years.” In Scotland at least, figures released at the end of last year by the Scottish Tories suggested that 83 per cent of schemes refused locally were given consent by the Scottish Government - which is responsible for planning, not Westminster - but he says that is why ways have to be found to persuade people to accept.

“I don’t see anything wrong in principle with saying you have to give people quite generous incentives if they’re going to accept in return of what they would see as environmental degradation of their own community. It may be even that will not be enough. It’s worth a try because in a way you’re restoring power to local communities. You’re not forcing them to make a choice, you’re not overruling their wishes - but you are saying, if you’re willing to accept, there’s going to be a benefit for you.

“We’ve got to recognise there is a problem here, we actually need the low carbon energy of which wind is potentially an important element - but those communities do not want the turbines so you’ve got to reconcile those two opposing standpoints.” His position as committee chairman and his stance on renewable energy has been fiercely criticised in some quarters because of his outside interests, which includes his role as non-executive chairman of TMO Renewables.

However, he insists there is no conflict of interest - and has consistently defended his role by saying that the interests were there for all to see at the time he was elected to the position by fellow MPs.

“The questions, as far as I’m aware, are not raised by members of the committee, who actually work with me, so I think my colleagues are satisfied that I’m a completely impartial chairman,” he says.

“My views on renewable energy were formed long before I had these interests, I developed an interest on this subject in the early 1990s and I have not changed my views about the need for more low carbon energy.

“This is something which my peers on the committee are the best judge of and if they expressed any concern about this I’d listen carefully to what they said.” He adds that other members of the committee - Sir Robert Smith and Peter Lilley - have interest in the oil industry, but he would not question their impartiality.

Despite his support of renewable energy he does not back completely turning away from oil and gas - something which the environmental lobby has called for - and supports further exploration.

“I think it’s unrealistic to believe we’re going to be able to manage without oil and gas completely in the next 25 years, so I would rather use what I would call British oil and gas - Scotland would call it Scottish oil and gas - than import it from somewhere else.

“There’s a cost factor there, recovering reserves from very deep water in some challenging conditions may be expensive, but I’d rather see us reducing our dependence on imports, exploiting our own reserves first and foremost.

“But I do see the role of oil and gas diminishing in the future and I think we have to move to more low carbon sources of energy both for electricity and heating and transport and so on - and reducing the dependence of our economy as a whole on fossil fuel consumption.

“That’s the way the world has got to go and I’d like Britain to be in the vanguard of doing that.” Unlike energy policy north of the border, which is for no new nuclear power stations - Yeo says it still has a role as a low carbon energy source.

And on perhaps the most controversial energy issue - extracting shale gas by means of fracking (pumping water and chemicals into the rock bed at extremely high pressure) - the committee has already made its view clear and currently on its books is another inquiry into the impact of shale gas on energy markets.

“Our report made clear that there do need to be stringent safeguards. There were mistakes made in the US; if the exploitation of shale gas reserves in this country is to be acceptable to those communities they have to be taken along with the decision step-by-step.

“There has to be complete openness about the impact on water resources and the use of water, complete openness about the chemicals used in the fracking process so people will feel they have a real ownership of the policy - which I think some communities of America have not felt they had.

“If you do that and have very vigorous rules about the casing of wells and drilling and so on - which is really only an extension of the existing regulations for oil and well drilling anyway - then we believe it is possible to do this safely.

“The issue of earth tremors, which halted the exploration in Lancashire for a while, is one which I think the scientific evidence shows is not serious enough to warrant a delay.” The UK Climate Change Act, which sets a target to reduce carbon emissions by 80 per cent by 2050 was passed as law four years ago (the Scottish equivalent was passed a year later and included tougher interim targets). Only three MPs at the time voted against it and one of them, Peter Lilley, is now a member of Yeo’s committee.

The chairman, however, is relaxed about his involvement: “He clearly takes a different view of the science of climate change from the rest of the committee - there are a number of people who take his view rather than ours - but I think the very strong majority on the committee remains convinced that there is a connection between greenhouse gas emissions, greenhouse gas concentrations and changes to the climate and I don’t think the presence of one person who takes a different view is going to fundamentally alter the committee’s overall stance.” Although a lot of the opposition to some of the recent ‘green’ issues has come from within the Conservative Party, he is keen to dispel any idea that there is any kind of right-left split over the environment.

In fact he sees the issue of sustainability and not consuming finite resources at an unsustainable rate to be a “natural interest” for Conservatives - particularly those like him who represent rural constituencies.

He says: “I don’t think it has become a completely partisan issue. I think that the Prime Minister remains signed up to addressing climate change as a serious issue and the Green Deal is an important climate change policy.

“In the 1990s there was a very strong consensus, right up to the passage of the Climate Change Act in 2008. I think the Conservatives were just as committed as Labour to quite an urgent programme of measures to address climate change. It has not historically been a left/right issue and I believe it is desirable because the solutions are mostly very long term and the more you have a bipartisan approach, the more likely it is that some of the difficult decisions will be taken rather than becoming a political football.” He accepts that his party’s coalition partners, the Lib Dems, have been committed to the green agenda for a long time, but adds that up until 2010 they have had “the luxury” of never having to answer for it.

“It’s one of those issues where you can take quite an aggressive stance if you’re not going to be called to account for the implications.” However, he adds: “All three main parties were pretty well lined up together about the need to address this - that consensus is not as strong as it was five years ago - I think partly because of the severity of the recession as many people are now very concerned to avoid imposing any extra costs at all on households whose income may have been frozen or even gone down, I entirely understand that.

“My own view is that on anything other than a very short-term outlook it is not just environmentally right to switch to a more low carbon economy, it is going to be economically right as well.” Now 67, Yeo can be considered a veteran politician. Elected as an MP for South Suff olk in 1983 he rose through the ranks as a PPS to Douglas Hurd, then as undersecretary for environment, then health. By 1993 he was back at the Department of Environment, again as a minister of state - but this rise was called to a halt when, under Major’s ‘Back to Basics’ policy of returning to family values, he had to resign after it was revealed he had fathered a child by a Tory councillor.

It is only 20 years ago, but in an age where MPs are under heavy scrutiny for their fi nancial dealings - and the huge number of MPs who stood down completely after the expenses scandal was revealed, it is perhaps harder to imagine politicians resigning quite so readily in the same circumstances.

He acknowledges public attitudes change over time.

“I think that there’s consistently - and rightly - been an expectation that MPs should conduct themselves in fi nancial matters with total probity. We have very detailed disclosure requirements about our interests and I think the regime for administering expenses has got tighter.

“I was one of those who did not have to make any repayments at all - that applied to less than half the MPs in the last parliament.

“It’s diffi cult to say about other issues, diff erent people have a diff erent view about how important they are and I had to resign because that was what was expected at the time.

“I was naturally sorry to do so because I was really interested in the work I was doing, but it hasn’t stopped me taking a close and continued interest.” Yeo was called back into the fold after the Labour General Election win in 1997 by the new opposition leader, William Hague, and he served as, among others, shadow secretary of state for transport and the environment.

When the Tories returned from the wilderness in 2010 under David Cameron, Yeo was not given a ministerial position, having resigned from the shadow cabinet in 2005, but was elected by his fellow MPs as chairman of the select committee.

He says that it was for this reason that he was able to make his “man or mouse” comment to Cameron.

“I’ve been around the track quite a few times before and I don’t have any remaining political ambitions. I can be more independent and outspoken about that kind of issue.” A week before the Energy Bill is published and Yeo bemoans the fact that the timetable had continually slipped - although he claims that one of the reasons why it was not published sooner was because DECC had paused to refl ect on the committee’s “forthright recommendations”.

We next speak in less salubrious surroundings - a call from a telephone box outside Dunfermline station in driving snow - after the Government had published both the Bill and a Gas Generation Strategy - which is intended to reduce uncertainty for gas investors, but has been seen as promoting a ‘dash for gas’ and potentially compromising climate change targets.

Th e Energy Bill spells out that £110bn needs to be spent on upgrading the electricity grid. The new Contracts for Difference are aimed at providing more predictable and stable incentives for low-carbon generation.

However, it still has not done enough, he says, to tackle energy efficiency in homes - and he says the Government has already admitted it has been “behind the curve” on the issue and will bring forward amendments during the passage of the Bill to tackle it.

How much renewable energy costs the taxpayer remains a contentious issue. The Committee on Climate Change - the independent group chaired by Lord Deben which advises the UK Government - has estimated renewable energy will increase bills by £110 a year - but the cost of relying simply on gas could be about £600 higher in 2050, but Yeo says: “It’s not an easy argument to put simply, because it does involve making assumptions about price trends in the energy world up to a decade ahead - which is a notoriously diffi cult thing to do.

“We have seen the cost of some renewable technologies fall quite dramatically, solar has fallen and may continue to fall in price, the same could be true of other low carbon technologies.” Before the Bill was published, Yeo had been one of those who had supported a target for decarbonising the electricity sector by 2030. Th is was not included. Ed Davey had confi rmed days before that it would not after a deal was brokered with the Treasury and instead there has been an undertaking one will be introduced at a later date - from 2014.

Yeo says he is pleased that the Government has at least “conceded the principle” of a target, but said he was still concerned that substantial numbers of gas-powered facilities springing up over the UK in the future meant there was still “an unnecessary element of uncertainty”.

“Th e carbon intensity target would have the advantage of driving investors towards low carbon choices and that’s why it is significant,” he says.

He adds: “Clearly there was pretty intense interdepartmental negotiations taking place before the publication of the Bill and DECC secured a very important confirmation from the Treasury in the figure for the levy controlled framework - that was definitely a satisfactory outcome because that did remove one of the elements of doubt - so it hasn’t all been bad news.

“But I think there were some trade-off s. The absence of the carbon intensity target of 2030 was one of those that went the other way.” However, it is these costs that is one of the factors stoking climate scepticism and an article written by James Delingpole (one of Yeo’s most ardent critics who has compared him previously to the Ebola virus) saw the Met Office take the step of issuing a statement categorically refuting his claims in the Daily Mail that the organisation had ‘admitted’ global warming had stopped.

Yeo says: “Certainly [climate scepticism] is going through, I suspect only a temporary, upsurge at the moment. The Met Office was understandably angry about what it felt was a serious misrepresentation of its conclusions.

“It’s a very prominent example but it’s not the only example. I don’t think that anyone who’s looked at this on an objective long-term basis could possibly say there’s any doubt about the fact that the climate is changing - where there is still some debate is what the causes of those changes are.” His challenge to David Cameron last year reignited the row over Heathrow airport and although the Heathrow issue does not involve Scotland directly, the spat highlights his wider frustrations about infrastructure UK-wide.

“I do think that if Britain is going to be competitive economically in the 2020s our infrastructure needs urgently to be renewed, updated, modernised - and that’s particularly true in transport,” he says.

“If you look at what countries, particularly in Asia are doing with their transport systems - their roads, railways and airports make ours look quite third world.” Scotland, responsible for much of its own transport issues, has not in the past been immune itself to criticism over investment in transport infrastructure - but Yeo adds: “In some respects, I think [the infrastructure] is a bit better than what is south of the border, actually, I think a bit more money has been spent on modernising the road system, relative to the traffic flows in Scotland than elsewhere.

“The rail system is in some respects better - it’s still pretty early-20th century and as a country, both England and Scotland need to be investing heavily in modernising our rail. I’m a very strong supporter of High Speed 2, not just going to Birmingham or Manchester, but all the way to Glasgow - I think that is absolutely essential for the sake of both England and Scotland that we should try to accelerate that project.

“But it is certainly true of airports - I don’t think there are any airports in the whole of the UK that are really up to the level we now take for granted when you travel to Singapore, Hong Kong, Shanghai or so on.

They are state-of-the-art - ours are not.” Previously his committee raised concerns about the potential financial impact of Scottish independence in terms of energy.

He says that regardless of the outcome of the referendum, energy is very important to Scotland and he wants to see maximum exploitation of oil and gas reserves in Scottish waters - including the plans for west of Shetland and he believes Scotland has the capacity to be a key player in both conventional oil and gas and renewables.

Oil has underpinned the Nationalist cause since it was fi rst discovered in the North Sea and he concedes that if Scotland were independent it would be entitled to a signifi cant share of what are currently considered UK assets.

But he adds that previous work by the select committee looked at what would have been the impact of dividing oil revenues up on a territorial basis.

“In only one year in the last 30 would the revenues that Scotland could have claimed directly for itself been sufficient to meet the budget deficit in Scotland if the subsidy from England was removed. All the claims that if Scotland was to get its own share of the oil and gas revenues - that it would suddenly transform the position financially - the answer is it would not do so sufficiently to compensate for what was going to be removed.”

Scotland is often painted as either a subsidy junkie, or propping up the rest of the UK, depending on which side of the independence argument you fall, but Yeo says “neither is quite true, I think; on balance, the evidence is quite clear that even if you allocated the energy revenues there’s still a net transfer from England to Scotland.”

He has been a regular visitor to Scotland over the last 30 years, a keen golfer - he was golf columnist for both Country Life and the Financial Times - he is a member of the Royal and Ancient and plays several times a year at St Andrews. However, there does seem to be a trait among many English Tories who, despite having no links to the country, still have a real interest in keeping the two together as part of the Union.

He agrees: “I think possibly because historically or philosophically we’ve had a greater concern about Britain’s position in the world and our influence on foreign policy - even though we’re now a relatively small country.

“I think our interest in foreign policy and defence issues may mean we are now more concerned about the impact of independence.

“I also like to think that perhaps we have a greater sense of history than the more recently created parties.” And he adds: “I think a lot of the brightest and best talent from Scotland has gone into businesses and professions which involve an international element - that’s certainly true in finance, in energy and I think it’s true in some of the professions and of course in politics too.

“You would be taking away an important component, perhaps a disproportionately important component of the UK if Scotland was removed.

“Scotland itself would face much greater difficulties than has been anticipated. Going into the EU, yes, they would be expected to apply and start from scratch and the evidence is that’s not an entirely comfortable process for some small applicants.

“So I think the assumption that Scotland would automatically glide into a position in the international community which was very advantageous - that assumption would turn out to be very false.”

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