Submitted by Gavin Devine on 29-09-2011

The content of Shadow Energy Secretary Meg Hillier’s speech to Conference this week was not exactly unfamiliar; those who watched Chris Huhne’s effort last week could have been forgiven for experiencing a little déjà vu. Like the Energy Secretary, Ms Hillier committed Labour to ensuring that green investment is a focus for rebuilding the economy. She also mimicked the man himself by promising policies intended to increase competitiveness in the energy sector.  

But any Shadow Minister worth his or her salt will want to draw hard and fast distinctions between Opposition and the Department under scrutiny.  So whilst Ms Hillier praised the achievements of DECC under the last Labour administration (coincidentally when her boss, Ed Miliband, was in charge), saying Britain had signed up to the “toughest carbon reduction targets in the world” and been transformed into a world leader in the fight against climate change, she was far less complimentary about the Department’s record under the current Coalition, calling it the “laughing stock of Whitehall”.

That Shadow Ministers are prone to exaggerated criticism of Government is not exactly news.  But to single out DECC seems unfair: unlike other Departments it has not brought been forced to climb down from ill-conceived plans to sell off state-owned forestry, nor mishandled controversial reforms of the NHS.  However, the Opposition clearly feels there are political gains to be made from shining a light on this part of government. So let’s briefly examine DECC’s record over the past year.

Let’s start at the top: there can be little doubt that the Department has been distracted by the constant media coverage of its Secretary of State’s private life.  But in policy-making it has not all been plain sailing either.

The Green Investment Bank, the centerpiece of the Coalition’s green agenda, spent longer than expected in gestation due to disagreement between DECC and the Treasury over what powers the bank should have. The eventual compromise reached means that the bank will only have the power to borrow from 2015 onwards – too late, according to many. The £1 billion initial investment allotted to the bank was also a source of disappointment to some green campaigners.

And the promise to be the “greenest government ever” has been undermined by the decision to cut public funding for the Carbon Trust, the government’s leading low-carbon agency, which caused the cancellation of grants to research into biofuels.  The coalition’s plans to make all new homes “zero carbon” by 2016 have also stalled, as have those for a national charging network for electric cars, with costs proving to be the stumbling block. And investors say the government’s changes to the solar PV feed-in tariff have pulled the rug out from under the market.

Yet DECC has also made significant progress over the past 12 months. The Green Deal made quick progress through Parliament and is a positive step in the right direction as it will see billions of pounds lent every year to create new jobs and accelerate Britain’s transition towards more energy-efficient homes. The Renewable Heat Incentive, the first scheme of its kind anywhere in the world, is ready to deliver £860 million of government funding.  And despite the scale of policy change proposed, the Department delivered electricity market reform proposals more or less on time, and without major deviation from the plans that Ministers set out in opposition.

Perhaps most significantly, the Department saw its way through the tricky coalition politics of steering the Nuclear National Policy Statement through the House of Commons, allowing the Liberal Democrats to abstain, whilst Chris Huhne and Conservative MPs voted in favour.

So on balance DECC does not exactly look like a “laughing stock”. But its challenges have really only just begun. The EMR proposals were delivered quickly but they still lack detail and some in the industry warn that such massive change to the market could have serious unintended consequences. And if the Department gets that wrong, then it will be no laughing matter.