Utility Week

16 | 13TH - 19TH SEPTEMBER 2019 | UTILITY WEEK Policy & Regulation Analysis I t's a testament to the current state of Brit- ish politics that what are normally set- piece parliamentary occasions get rapidly eclipsed by events. Ordinarily, a government spending review would be the centrepiece of the weekly news cycle. But this year's review, which took place last Wednesday, wasn't even the big- gest story of the day as MPs backed legisla- tion ruling out a 31 October no-deal Brexit within hours. It may have felt like a three-minute won- der, but the spending review offers pointers about how energy and climate change mat- ters to a government hurtling towards a gen- eral election. A snap poll before Christmas is still likely, if not in October since Boris Johnson failed to secure MPs' backing for a poll before parlia- ment was prorogued on Monday. Last Wednesday's statement contained thin pickings on the climate change front, the highlight being an additional £30 million for the Department of Business, Energy and Industrial Strategy (BEIS) to "accelerate pro- gress" on its work on developing decarboni- sation programmes. It is only a couple of months since the government's headline pledge to cut emis- sions to net zero by 2050. But more bread and butter concerns appeared to be on chan- cellor Sajid Javid's mind last week. Holding pattern for BEIS The budget for BEIS was increased by 2.1 per cent, but this was just under half the 4 per cent boost for spending across govern- ment. And it was one-third of the 6 per cent enjoyed by the Home Office, much of which will be ploughed into paying for the extra 20,000 police officers the PM wants. Lord Deben, chair of the Committee on Climate Change, says: "There was a con- centration on those issue that were thought likely to be election issues." Sir Ed Davey, the Liberal Democrat shadow chancellor and a former energy sec- retary, tells Utility Week the review was "a completely hopeless response to the climate emergency". Branding the review a "pre- election gimmick", he says: "They didn't show any real sign that they are going to take the climate seriously, which was a huge disappointment." Sir Ed, who helped usher in the contract for difference regime, says the Conservative party appears no longer to be interested in targeting the many voters who care about environmental issues. "It shows how lit- tle they think the public cares about this," he says. In fact, his verdict on the government's efforts across the board is scathing: "The problem with this government and its pre- decessor is that almost all of its decisions have been the wrong ones and they've been totally unwilling to take the right decisions." Abysmal record on the environment Sir Ed calls the government's record on envi- ronmental issues since the 2015 general elec- tion "abysmal". "There's a long list of failures and almost nothing to put on the other side of the ledger," he says, name-checking the ban on onshore wind, the abolition of the zero car- bon homes standard and the decision not to go ahead with the Swansea Bay tidal lagoon. "We've had all this debate about climate but they're not prepared to do it." Sir Ed, who recently had the BEIS brief added to his shadow responsibilities, was backed up by Mike Clancy, general secretary of Prospect (see interview, p6). "There was a lot Javid could have done in this spending review to reassure the country that we were taking this threat seriously – it fell somewhat short," says Clancy. And concerns that the government is fail- ing to put its money where its mouth is are not confined to the Conservatives' political opponents. Patrick Hall, a researcher at the Bright Blue think-tank, says: "Given that the government's own analysis suggests it is not on track to achieve net zero emissions by 2050, there is a need for stronger investment and incentives in particular sectors of the economy – especially the domestic, trans- port and energy sectors – to enable deeper decarbonisation." Jonathan Marshall, head of analysis at the Energy and Climate Intelligence Unit, agrees that the size of the extra funding allo- cated for mitigating global warming doesn't look good in light of the mounting concerns surrounding the issue. "Considering all the pressure on the government to act quickly, to do something that looks so small was always going to look bad," he says. But he argues that the limited nature of this year's exercise, which is restricted to a single year rather than the three years that spending reviews commonly cover, means it was never likely to be much more than that. "It was always going to be fairly small scale. With it being a one year review and only covering departmental funding, you were never going to get billions of pounds," he says. The fundamental policy shi¡s required to deliver net zero, such as bringing forward the ban on internal combustion engine vehi- cles from 2040 and creating a bigger pot for offshore wind subsidies, were never likely to feature, says Marshall. Watch this space Javid's answer to his parliamentary crit- ics was to point to the promised National Infrastructure Strategy, due to be published alongside the Budget in the autumn. He told MPs in last week's debate on the spending review that "some very important investments that will need to be made on decarbonisation will be capital investments and that is just not covered today. But that does not mean it is not going to happen and is not taken seriously." The chancellor added that rebuilding the UK's national infrastructure will be the "first priority" of the new economic plan. Lord Deben agrees that too much shouldn't be read into what he describes as a "very general" spending settlement. But if Javid survives the twists and turns of the next few weeks to deliver the autumn Budget, he will have to come up with some- thing a bit meatier to satisfy the govern- ment's climate change critics. Climate emergency on hold The spending review did little of substance to move towards net zero, but given the political chaos enveloping Westminster it was never likely to, says David Blackman.

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