A closer look at the UK government’s big climate and energy reshuffle

As covered in last week’s blog, UK Prime Minister Rishi Sunak has reshuffled his cabinet and split the business energy and industrial strategy department in two. What does all this mean? Is it window dressing and intra-government manoeuvring or a necessary reset? Marc Hudson takes a deep dive. 

BEIS is dead! Long live the EsNZ! In an announcement last week, Rishi Sunak, currently the UK Prime Minister, reshuffled his cabinet and also rearranged some big government departments.

The big item, for energy and climate people, is that the Business Energy and Industrial Strategy department – created by Theresa May when she became prime minister in 2016 – was no more. BEIS had been created by an amalgamation of the Department of Energy and Climate Change (set up by the Brown government in the heady pre-Copenhagen climate talk days, during that the cautious but intoxicating  optimism of the Climate Change Act) and the Department of Business Innovation and Skills which was a successor to the long lived Department of Trade and Industry. 

DECC and BIS had collaborated and co-ordinated on a couple of interesting projects, including “road maps” (without drivers, or fuel or vehicles – just the ‘map’) at what UK industry could do around industrial decarbonisation and energy efficiency (answer – a bit of process changing, fuel switching and a lot of carbon capture and storage).

BEIS’ never-ending turf war with the Treasury

At the time of BEIS’ creation, environmentalists feared that the environment and climate change aspects would be lost within a mega department. This proved not to be the case under the leadership of Greg Clark and with ministers like Nick Hurd and Claire Perry. Issues like carbon capture and storage were picked out of the circular file where Cameron and Osborn had tossed them, and – within the broader industrial strategy  – sort of prospered however (see this blog on Sussex Energy Group’s site for the CCS  story).

But BEIS had already lost a part of the never-ending turf war with the Treasury when its industrial strategy was replaced with a more anodyne Build Back Better document last year. 

It’s of course too early to tell what all this means, though wags will doubtless talk about re-arranging the DECC-chairs. It will depend on many other factors. No doubt across Whitehall and Westminster (unmitigated) midnight oil is being burnt by politicians, trade associations, ambitious (and/or exhausted) civil servants, and lobbying companies, all of them trying to figure out the new organigrams and understand where old friends and enemies now sit, how that might affect their particular personal and sectoral interests and which levers and buttons now need pushing. 

Joined-up thinking is still in short supply

Whether policymaking and decisions about implementing existing policies suffer a short pause or longer turbulence remains to be seen. There have recently been repeated warnings (more like pleadings in their tone, tbh) about the need for quicker joined up thinking and doing, from outgoing MP Chris Skidmore, chair of a net zero review. And just last week five energy associations (including Renewables UK and the Nuclear Industry Association) wrote a “please help” letter to Chancellor Jeremy Hunt (see a very good account by journalist Sarah George, writing for the indispensable edie.net).

Analyst Christian Spencer captured the mood well when he wrote on Twitter:

Guardian economics journalist Larry Elliott has a typically intelligent column, both historically informed and peppered with juicy quotes form former big beasts (Heseltine, Cable, Mandelson). He has a quote from Nick Macpherson, the former top mandarin at the Treasury

For students of rearranged deckchairs, this seems strangely reminiscent of Gordon Brown’s 2007 vision: Department of Energy and Climate Change, Department of Innovation, Universities and Skills, and Department for Business, Enterprise and Regulatory Reform.

Nick Macpherson

The past is prologue

Britain did not have a climate change department per se, before 2008. Before 1970 it did not have an environment department at all. Environmental matters were handled by other departments. (The word “environment did not really have the meaning then that it does now. Issues were called “pollution.”)

My favourite example of this is that during the pivotal London Fogs of December 1952, which killed thousands and led indirectly to the wildly successful Clean Air Act of 1956. It was future prime minister Harold Macmillan, who was, as Minister for responsibility. He famously said, 

‘I would suggest that we form a Committee…. We cannot do very much but we can seem to be very busy – and that is half the battle nowadays’

Harold Macmillan
Harold Macmillan

I made a video about this (of course I did), which you can see here.

When did we start having departments for the environment?

A department for environment owes its existence to the concerns in the late 1960s about conservation. There was a building anxiety internationally – about the extinction of what we now call charismatic megafauna, and population growth. In the UK there was the aftermath of the Buchanan report into cars, and the rise of motorways.  More specifically events like the Torrey Canyon oil spill in 1967, the UN agreement to hold a big environment conference in 1972 and the fact that what we now call the EU was going to hold a European Year of Conservation. Groups like the (now defunct) Conservation Society were formed and beginning to mobilise. It’s forgotten now, but pollution was all the rage in the late 1960s and early 1970s.

Labour Prime Minister first mentioned “the environment” in its modern sense at a Party Conference in late 1969. Labour (and Later Liberal) Wayland Kennet was involved in both the creation of the first Environment White Paper (released in May 1970) and preparations for a department of the environment which he never got to head because Ted Heath’s Conservatives unexpectedly won the 1970 election.

(The whole period is neatly summed up in an engaging book called “The Politics of the Environment” written by one Stanley Johnson, father to the once and future Prime Minister Boris.]

Similarly, while Britain had often fixated on how it was going to supply energy to itself, a Department of Energy per se was only created after another crisis – that of the first “Oil Shocks” and coming of the three day week  led to an announcement in January 1974. Energy efficiency only really received a boost following a Presidential visit by Jimmy Carter in 1977. UK Prime Minister Jim Callaghan felt upstaged and his Energy Minister, one Tony Benn, “banged heads together” for an announcement.

Battles between the energy and environment departments have continued ever since, with the usual turf wars between Secretaries of State, and with ministers and their proxies butting heads, undermining briefing against pulling in opposite directions. It was really – despite lots of rhetoric beforehand – only between 2003 and 2009, that energy and climate (as distinct from environment more broadly) became finally entangled. It’s interesting to see energy security explicitly referenced now, as that was one of the concerns in 2005/6 that contributed to the entangling (here’s a nice 2014 blog by a very good academic, about just that).

What will happen next? 

I’ve given up trying to gaze into any crystal balls. As Danish physicist Niels Bohr (may have_ once quipped, “prediction is very difficult, especially about the future.”  However, the following seem safe-ish bets in the short-term.

  • Energy prices will stay high for businesses and residential users.
  • Even if/when they come down, users will not see an enormous amount of relief, 
  • The push towards renewables and energy efficiency will continue. But this does not mean that big business is somehow “replaced.” See this about US battles.
  • Community involvement and engagement in energy systems will remain both tremendously difficult and tremendously important.

Meanwhile the “boring” but crucial battles with Treasury – about what to fund and how to fund it – will go on. It may be that with BEIS split, all Treasury has to do from here on is a mopping up operation.

Other Reading

Rafael Behr in Grauniad – “A large part of the Conservative party is allergic to government meddling in the economy on the scale required for a dash to green tech. The impulse for radical economic reinvention has already been spent on a different revolution, Brexit, whose keenest Tory advocates believe the best thing the state can do for enterprise is get out of its way.”

Mitya Pearson writing on The Conversation – How climate change could fare in the UK’s new Department for Energy Security and Net Zero

Edie on 7th Feb Prioritising net-zero or ignoring non-energy emissions? UK’s green economy reacts to Sunak’s department shake-up

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