ConservativeHome's ToryDiary

David Cameron promises money saving environmentalism

Even those who are sceptical about global warming can probably see much to welcome in today's announcement by David Cameron and Greg Clark that the Conservatives plan to install smart meters in every UK home.  The meters would be linked to the National Grid and would tell people when it would be cheaper to use electricity for, for example, recharging their electric car or for other electrical appliances that do not need peak time input.

Originally planned for announcement yesterday - but delayed by 24 hours because of the Heathrow decision - the smart meters plan would cost £1bn and is being described by David Cameron as the "internet for electricity".

Mr Cameron discussed his green plans during a successful live webcast a little while ago with The Independent's Geoffrey Lean.  Watch it again via the bottom of this page.

On this morning's Today programme Greg Clark announced that every home would be entitled to a £6,500 energy efficiency voucher.  This voucher could be used for loft and cavity wall insulations that would quickly pay for themselves.  The householders would never write a cheque.  The energy companies would have to make the up-front efficiency improvements and be paid back over time through energy bills.  Dr Clark said that this was a great policy for difficult economic times as the home improvements would create jobs in the building trade and save households money - as well as helping Britain move towards a low carbon economy.  Listen again to Greg here and visit conservatives.com for more information.

David Cameron to launch new environmental policy this afternoon via a webcast

This afternoon David Cameron will be launching his latest proposals to create a low carbon Britain via a webcast.

This is something of a first and will involve the party leader being interviewed by Geoffrey Lean of The Independent before taking questions from all-comers via live chat, e-mail and Twitter.

It coincides with the appointment today of Craig Elder at CCHQ as Online Communities Editor, a post which will involve him heading up the party's presence in social media and ensuring that online communities get lots of opportunities for productive interaction with the party. He has written about his new role here.

The new policy itself has been previewed via an interview David Cameron has given to this morning's Guardian. It revolves around investing £1 billion in a "hi-tech National Grid" which would see "smart meters" being installed in every home - meaning that energy companies would be able to tell consumers when it is cheapest to use electricity.  Householders would also be able to use the smart meters to feed the grid with electricity generated through solar panels.

You can watch the policy launch webcast live at 1.30pm via the chatroom below or through the party's website. You can email your questions in advance to be put to David Cameron or use the Twitter tag #askDC.

Jonathan Isaby

Greg Clark must keep the lights on

We have high hopes for Greg Clark MP, the new Shadow Secretary of State for Energy and Climate Change.  We don't expect him to be as cautious about climate change as we are, but we hope that he'll ask very tough questions of those who insist that their way of tackling climate change is the only way.  He could start with the EU.  Open Europe's Hugo Robinson writes for ConHome today about the inflexibility of the Brussels' climate change plan and how it might be bad for the environment and disastrous for the economy.  If there is to be an international agreement on climate change - beyond the EU and involving India and China - Greg Clark should be urging a rethink of the EU model.

More importantly - as far as we are concerned - is the need to keep the lights on.  Matt Sinclair put it well on CentreRight:

"The reason why Ministers love working on climate change is that the outcomes are all decades and centuries in the future so there is no real accountability. By contrast, people will notice if the lights go out. While politicians can try and blame the energy companies, or hope they're in a different job by the time poor choices lead to economic disaster, there is a much greater chance that the public will notice when political leaders let them down in energy policy than with climate change."

The Tories had been dragging their feet on energy policy although latterly have been making more positive noises about nuclear energy and clean coal.  Greg Clark needs to demonstrate that the Tories have a plan to address the looming crisis in British energy supply.  The insecurity of Britain's energy supply - and the associated expense to business and consumers - is set to be a top-of-the-news issue in five years' time.  Greg Clark is as clever and courteous as Michael Gove. He now needs to prove that he is as courageous. We hope Greg will be to energy policy what Michael Gove has been to education policy. 

> Step 4/10: Put Eric Pickles in CCHQ

Greg Clark MP is new Shadow Climate Secretary

In a very welcome appointment (one ConHome recommended) Greg Clark MP has been chosen to shadow Ed Miliband as Shadow Secretary of State for Energy and Climate Change.  Nick Hurd MP will replace Greg as Charities spokesman.

That may be the extent of the Tory reshuffle.

4.05pm: An email from CCHQ notes that Shadow Climate Minister will be Greg Barker MP and Shadow Energy Minister will be Charles Hendry MP.

Alan Duncan: Britain is "uniquely equipped" to take advantage of clean coal

One of the big arguments of the climate change lobby is that environmental and energy security concerns lead us to the same conclusions.  Nigel Lawson took issue with this recently in an exchange of views with Oliver Letwin.  He noted that many countries (including Britain) have plentiful supplies of coal and those nations include our closest friends, Australia and Canada.  Using coal addresses many of our energy security worries but coal is, of course, unacceptable to the environmentalists. 

Anti-coal views haven't stopped fifty new coal-fired power plants being commissioned across Europe.  Italy, in particular, is planning a rapid increase in its use of coal.  Arthur Scargill popped up recently to make the case for coal versus nuclear.  It's a false choice.  Nuclear power plants should be part of our energy mix.  John McCain agrees and so, more surprisingly, does Angela Merkel.  Germany's Chancellor wants to stop the closure of Germany's nuclear power stations - a policy adopted by Gerhard Schroeder's Green-SDP administration.

The key question is whether coal can be clean or clean enough.  This morning's Times reports on German efforts to develop clean coal technologies.  It also notes the enormous commercial rewards for the corporates or nations that develop these technologies first.  A leader in The Times concludes: "The race for clean coal is on. The British need to catch up."

Alan Duncan comments:

"The Germans and the Swedes are to be congratulated on this experiment but it's a depressing indication of how we have ceded international leadership on this critical technology.

"You cannot get a starker demonstration of the poverty of Labour’s thought on energy policy than their handling of carbon capture and storage. Not only did their dithering frighten away a joint CCS experiment at Peterhead between BP and Scottish & Southern, but now their confusion has led E.On to postpone their decision on a new supercritical coal plant at Kingsnorth. The Government’s attitude has set back our ability to deploy this technology by as much as a decade and, as elsewhere, is making Britain an increasingly unattractive place to invest."

"The fact is that Britain is a country that is almost uniquely equipped to take advantage of CCS technology. The North Sea is the ideal repository for carbon emissions, we have a healthy manufacturing sector and an energy industry that is (for the moment at least) ready to make major investments in Britain. With China and India leading a world revival in coal burning, CCS is not only an enormous economic opportunity for the UK, but also an environmental necessity.  This is why we have pledged to fund a minimum of three CCS plants here in the UK. That’s the sort of policy ambition that UK plc needs to secure competitive advantage in the new energy economy."

Alan Duncan attacks windfall energy tax as "socialist hatred"

The FT Westminster blog notes that the Tories have broken their silence on the increasingly heated debate within the Labour Party about a windfall tax on the energy companies.  Alan Duncan, Shadow Business Secretary, rang the FT and said:

“Whipping up hatred is not a good basis for fair taxation. What matters more than retrospective taxation is properly working competitive markets, which is what [the energy regulator] Ofgem is there to bring about... We are seeing old-fashioned socialist hatred converting once again into high taxation.”

Matthew Sinclair set out the case against a windfall tax over at the TPA blog:

1. Energy companies are not responsible for massive increases in prices: "Another reason that prices are going up is that the government are putting in place new charges and regulations such as the European Union Emissions Trading Scheme, the Renewables Obligation and the Climate Change Levy... The Government could reduce prices tomorrow by scrapping some of these ineffective regulations."
2. Energy company profits aren't necessarily the result of collusion or exploiting hard-pressed consumers
3. Windfall taxes discourage investment: "Imposing a windfall tax sends a message.  It tells business that if they make important investments, that need to pay off with substantial profits later on, we will punish them for it.  We might try and convince them that the windfall tax is just a one off, and future investments won't be punished for being useful, but they have no good reason to believe us."
4. Windfall taxes encourage fiscal irresponsibility: "If the Government increases spending to make use of the revenue from a windfall tax, or fails to take action to plug ongoing gaps in the public finances, then they have stored up fiscal problems for the future - once the windfall is spent."

Read Matt's full post here.  Also worth reading is this post at Comment is free by Deborah Hargreaves.  She is also worried about the investment effects of a windfall tax, too: "Already companies are grumbling about the difficulties of building power stations in Britain where they face long planning wrangles, little state help and environmental protests. Add an arbitrary levy to those drawbacks, and the UK becomes even less attractive for international investment dollars."

The good, okay and ugly guide to Conservative economic policy

The main story in The Sunday Telegraph focuses on calls by "Leading Tories" to end Labour's "overtaxing, overborrowing and overspending".  Lord Forsyth, John Redwood and CentreRight's Simon Chapman are all quoted.  We have long argued that George Osborne was wrong to match Labour's overspending but public expenditure is only one ingredient of economic policy.  What does the rest of Tory growth policy look like?  Here's our good, okay and ugly guide to where we are...

GOOD

Monetary policy: The Conservatives will strengthen Bank of England independence.

Free trade: The Conservatives are probably the most anti-protectionist party in Europe.  Long may that remain so.

Long-term bills: The Conservative Party's social reforms - reducing welfare, strengthening the family and reducing drug dependency - should deliver progressive reductions in the demands on the welfare state. The reforms will also encourage economically and socially creative citizens.

Education and skills: Far too many children in Britain are trapped in underperforming schools.  Michael Gove's Swedish-inspired revolution will start to change that.  Also welcome are Mr Gove's concerns about science and maths teaching and John Hayes' work on skills.

OKAY

Taxes: This ingredient almost deserves to be in the ugly category but for some interesting ideas on tax simplification and promises on stamp duty, inheritance tax and the adoption of Andrew Lilico's Fair Fuel Stabiliser.  The overall picture, however, is that Brown has levied 100+ extra taxes, many falling most heavily on the poor.  The Tory response is timid.  This timidity flows from a white flag policy on supply-side economics (ie rejecting the fact that certain tax cuts at least partially pay for themselves by generating growth and discouraging avoidance) and more importantly adherence to Labour's spending plans (see below).

Regulation: We can hope that Conservatives will operate a lighter touch and even adopt some of John Redwood's reforms as set out in his Competitiveness Report.   Also welcome are Tory ideas to undo some of the damage done by Gordon Brown's financial regulatory regime.  What we don't need however are headline-chasing announcements like the one on Chapter 11 bankruptcy.  Chapter 11 stops bad companies from failing (customers of US airlines will know what we mean).

UGLY

Transport: Theresa Villiers has been congratulated by others (Charlie Elphicke and Dan Hannan) for her campaign against the BAA monopoly but overall Tory transport policy  is disappointing.  On Radio 4 last Saturday Ms Villiers said that the party will have radical ideas by the time of the General Election; including on high-speed rail.  Let's hope so.

Energy: Alan Duncan should be commended for forcing the party to abandon its 'nuclear energy is a last resort' policy but there's little sense of urgency from the party leadership about Britain's looming energy crisis.  A few micro generation projects will not be enough to keep British industry going.

Public spending: This is the ugliest of our economic policies.  Conservatives should not be pledging to continue the biggest ever peacetime increase in public spending when ordinary Britons are having to cut their own budgets.  A flexible freeze on public sector recruitment, scrapping of centralised IT projects, abolishing ineffective quangoes like the RDAs and market-based reforms of the public sector could all be introduced to start bringing spending under control.  Dan Lewis has suggested other disciplines.

Tory MP Ian Taylor attacks Greenpeace's "hypocrisy" in opposing nuclear energy

Tory MP Ian Taylor, Chairman of the Conservative Party's Science and Technology taskforce, has issued a statement today urging Britain to embrace nuclear power:

"Unless the Government moves quickly to boost the nuclear power station rebuilding programme, there is no hope in meeting the non-fossil fuel targets. Wind and wave power alone will not suffice.  Greenpeace shows sheer hypocrisy in pressing its objections. Members should resign in protest if they are seriously 'green'."

In the video below Mr Taylor describes the belief that a little more wind and wave power will deliver energy security as "emotionally confused".  Only nuclear power, he says, will help Britain to substantially reduce its dependence on oil from the Middle East and gas from Russia.

The initial Cameron position on nuclear power was to regard it as a "last resort" but that language is no longer being used.  The Tories now believe that as long as there is a fair and equitable financial regime, nuclear power should be an important part of Britain's future energy mix.  The Liberal Democrats remain firmly opposed to any more nuclear power plants.  12% of Tory members agreed with the LibDems' opposition to nuclear power.  85% disagreed with it.

Early last month David Cameron gave a speech to Greenpeace, promising a decentralised energy revolution where people are paid for the energy they produce.

Related link: Of kettles and car engines - why nuclear power is not the solution to energy security by Peter Franklin

Stopping grassroots-leadership tensions going nuclear

A little earlier I posted an overview of this morning's Cameron press conference.  I asked one question myself - on nuclear power.  The ConservativeHome Members' Panel suggests that you love nuclear power stations almost as much as grammar schools!  I asked David Cameron how he planned to avoid another grassroots-leadership row when Gordon Brown makes it clear that he's backing nuclear power.  My question at least produced the biggest laugh of the press conference... Please watch David Cameron's answer below.

Tories put faith in 'green energy revolution'

Today sees the Conservative Party publish the interim findings of its energy review (see BBC report) and it steers something of a middle course between Tony Blair's enthusiasm for nuclear power and the Liberal Democrats' blanket opposition.  This pragmatic policy - partly designed to encourage the kind of cross-party consensus on energy that will need to underpin long-term investment in new generating capacity - will also satisfy most Tory supporters.  A ConservativeHome survey just last month found that only 12% of Tory members agreed with the LibDems' opposition to nuclear power.  85% disagreed with it.  David Cameron will tell the Local Government Association:

"Where the government sees nuclear power as the first choice, under our framework it would become a last resort; where the Liberal Democrats rule out nuclear power, we rule out subsidies and special favours for nuclear power."

Mr Cameron will go on to say that global warming represents the greatest long-term threat to the economy.  Speaking to ConservativeHome last night, Alan Duncan MP promised that the overall tone of Mr Cameron's speech - in tune with the energy review - will be optimistic.  The Conservative Party believes that we are on the verge of a "green energy revolution" that will transform the debate about Britain's energy security.  Sceptics, however, will wonder if these technologies will mature fast enough to replace the the eighteen nuclear power stations and other gas and coal-fired plants that will be retiring over the next decade and which account for 25% of current UK generation capacity (Bloomberg).

Mr Cameron will tell the LGA that he is optimistic about the possibilities of local power generation - "I want Britain to be at the forefront of the green energy opportunity and I want local government to be in the forefront of Britain's environmental progress... The future of energy is not top-down, it's not centralised - it's bottom-up and decentralised."  Woking is the 'poster-council' for this approach.  The BBC has reported that a cross-party consensus on that council has reduced "energy consumption and pollutants by 44% and carbon dioxide emissions by 72% between 1990 and 2002."

Conservative policy will also emphasise energy efficiency.  The party has been strongly influenced by findings by the Rocky Mountain Institute which suggest that every pound invested in energy efficiency yields "seven times more "solution" than a pound invested in nuclear" (Zac Goldsmith in the Independent on Sunday).

Related link: On yesterday's YourPlatform David Dundas wrote that Britain must embrace nuclear power if we are to secure our energy future.

Liam Fox: A strategy for keeping the lights on

Liam Fox, Shadow Defence Secretary, has given a 'big picture' speech this morning on energy security and the way Britain's defence capacity must underpin that security ('Over_A_Barrel'_speech.pdf).  Key sections of the speech are quoted below:

Labour's financial starvation of Britain's armed forces: "This year we will spend only 2.2% of our GDP on defence – the lowest proportion of our national wealth contributed to security since 1930."  Related link: The whole British army will be able to fit in the new Wembley stadium.

The three underpinnings of long-term energy security: "We are all competing for the same natural resources to feed the economic system. The potential for terrorists or even nation states to interrupt this supply to cause widespread – rather than just local – disruption increases enormously... In the years ahead energy security, economic security and national security will be inextricably linked. If we want to ensure that we can keep the lights on in Britain then we need to develop a comprehensive energy strategy. It is simply a matter of risk management. Such a strategy will need to have three components: diversity in the type of fuels we use; diversity in the geographical sources of those fuels and the security structures that will guarantee the safe transport of these fuels."

Are Cameron's Conservatives now opposed to privatisation?

I've just received a press release from CCHQ with the following headline:

"Government plan to privatise Sellafield ‘neither wise nor honest’."

The release continues:

"Commenting on newspaper reports today that the government are set to announce tomorrow that control of Britain’s most controversial nuclear site, Sellafield, will move into the private sector through the sale of its state-owned operator, British Nuclear Group, Shadow Trade & Industry Secretary Alan Duncan said:

"Making this statement on the day the House rises for Easter is typical of Labour's sneaky practices.  'This announcement is being made in the middle of the Government's Energy Review, in which the crucial question of how the nuclear sector might work with Government is being examined.  Making this announcement now is neither wise nor honest.  'Gordon Brown did not mention the disposal of British Nuclear Group in the budget statement last week.  To dump fifty years of dubious waste onto the private sector with none of the guarantees that only Government can offer needs serious public debate before they should think of going ahead."

Alan Duncan's charge of sneakiness is spot on.  Labour probably wanted to avoid criticism from those anti-capitalists who think that the private sector can't be trusted with sensitive assets like prisons and nuclear power.   It's a bit rich, however, when those sentiments are being expressed by the party that gave privatisation to the world.

FT: Tories may not back Blair on nuclear power

"We must make the case for civil nuclear power to tackle the energy crisis with least damage to the environment."

- Conservative spokesman on energy, October 2005

I have always been "instinctively hostile to nuclear because I'm suspicious of the dangers it poses."

- Conservative spokesman on energy, February 2006

The shift in emphasis has come with a change of policy spokesman.  The October 2005 statement was made by David Willetts to the Conservative Party Conference.  The second statement was made by David's successor as Shadow Secretary of State for Trade and Industry, Alan Duncan.  The FT interprets the new stance as "unexpectedly hostile" to the endorsement of nuclear power that will likely be made by Prime Minister Tony Blair's energy review.

Mr Duncan uses an interview with today's FT (subscription required) to emphasise the difficult economics of nuclear energy:

"The economics are absolutely crucial. The only power station anyone's going to build in a free market at the moment is a gas-fired one.  On the nuclear side, there's a massive question mark over whether, if a nuclear generating company were made to meet all its costs through the entire life cycle of the project, that they would ever build a nuclear power station. That calls into question, given the nuclear decommissioning costs... the relationship between the nuclear sector and government.  If, and again this might come out of the review, it looks as though coal and oil can capture and not emit carbon, then they can contribute to an emissions target."

But is Mr Duncan's premise correct?  He talks of a "free market" in energy but, in reality, it is a heavily (and, perhaps, unfairly) regulated market.  The poor economics of the nuclear industry are partly blamed by some on reactionary over-regulation (see here and here for an American context).

In any case... should cost be the only consideration when it comes to the 'nuclear option'?  Environmentalists such as James Lovelock believe that a major expansion of nuclear energy is the only way to beat global warming.  Others believe that embracing nuclear power is necessary for energy security.  For the second time in a very short time I find myself agreeing with Chris Patten.  In yesterday's FT he asked...

"Do we really prefer dependence on Vladimir Putin, Russian president, and Gazprom or nuclear power?"

My guess is that we probably need a diverse mix of energy sources.  Some will be cheaper at different times as technologies and market conditions evolve.  The Conservatives should support Tony Blair if he takes the nuclear option.  The need for long-term solutions to both the energy and pensions crises demand a degree of cross-party consensus.  The Tories shouldn't play politics on this issue.  Let's leave that to the LibDems...

TODAY'S FRONTPAGE OFFERS NEWSLINKS ON BUSH'S NEW ENERGY POLICY ANNOUNCEMENTS.

Chris Patten urges stronger line against Tsar Putin

It's not often I agree with Chris Patten but he talked a lot of sense on last evening's World Tonight (Radio 4).  The former EU foreign affairs commissioner and former Tory Chairman was reacting to 'GasGate' (as I shall call it) and Russia's apparent attempts to punish Ukraine's Orange Revolutionaries for rejecting its preferred presidential candidate.

The man who has been Chairman, Governor, Commissioner and is now Chancellor and Lord argued that the EU (and the west in general) had been too soft on Russia for too long.  The EU has attempted to bring Russia into the family of western democracies by treating it with kid gloves, inducements and membership of the G8 (even though its economy doesn't warrant it).  Rather than accepting these encouragements to become more democratic Mr Putin has become increasingly authoritarian and, says Patten, bullied its neighbours.  As an illustration of policy pusillanimity we have recently witnessed Gerhard Schroeder behave in an ethically dubious way by taking a €1m pa job from Russia's Gazprom for involvement in a project he rushed through in the dying days of his Chancellorship of Germany.

Lord Patten recommended tougher treatment of Russia.  He said that it was "extraordinary" that Putin had been allowed to assume the chairmanship of the G8 even though it was going "backwards on democracy".  He urged the other G8 leaders to tell Russia - privately or otherwise - that its recent behaviour was unacceptable.  He also urged the EU to be warmer to Ukraine's aspiration to Union membership.

Chris Patten said that the west had done nothing about Russian misbehaviour in Moldova and Georgia because it was afraid of upsetting a major supplier of its energy needs.   The west should remember, he said, that Russia's narrow economy hugely depended upon Europe's custom and it needed to be more assertive.

Energy policy is likely to be an increasingly important theme in coming years.  World competition for oil, for example, has seen an increasingly thirsty China form strategically close links with Venezuela, Sudan, Iran and other ugly regimes.  The Wall Street Journal noted only yesterday how Big Oil companies only account for 16% of the world's current production.  The real powers in the world are "the Saudi state oil company, the Iranian state oil company, the Venezuelan state oil company, etc".

If Mr Cameron is looking for a big issue to face up to, they don't get much bigger than the looming energy crises.