Exposed: Fossil fuel connections of ministers who voted against the decarbonisation target

38 of the ministers who voted against the amendment to set a decarbonisation target for 2030 last week in the House of Commons have received support from, or are in some way connected to, the fossil fuel industry.

Together with other accusations of influence by lobbyists on MPs, and the alleged giving by Tim Yeo of advice to a rail freight company seeking to influence Parliament, the revelations give fresh impetus to calls for MPs and ministers not to get involved in decision-making on matters in which they have an interest.

The list, together with their connections, is published at the bottom of this article. It is noteworthy that none of the ministers with connections to the fossil fuel industry voted for the decarbonisation target.

The list comes from cross-checking the list of those who voted against the amendment with the list of ministers with such connections published in March by the World Development Movement, which itself had collated it from numerous publicly available sources.

The WDM's exercise found that one third of all 125 government ministers have such connections.

This does not account for any connections held by backbench MPs, such as Peter Lilley, who voted against the amendment. He, for example, is a non-executive director of Tethys Petroleum Ltd, as well as having been paid £22,462 in July 2011 for giving advice to Ferro Alloys Corporation Limited on the management and flotation of a power generating subsidiary.

Top ministers with fossil fuel connections include William Hague, Vince Cable, George Osborne, Michael Fallon and Greg Barker. They all have links with big finance, oil and coal companies that are driving climate change.

Foreign secretary William Hague, who used to work for Shell, helped Tullow Oil escape paying a £175m tax bill in Uganda, one of the world’s poorest countries. Mr Hague made a personal phone call to the Ugandan president on Tullow Oil’s behalf.

Vince Cable, secretary of state for business and skills, in charge of regulating companies, worked for Shell and was referred to as "contact minister for Shell" by a top Shell executive in 2012.

His business and now also energy minister, Michael Fallon, was an independent non-executive director responsible for inter-dealer broking (until 2012) of Tullett Prebon plc, specialising in Energy & Commodities.

Chancellor George Osborne accepted donations worth £38,000 from the head of CQS, a hedge fund that channels millions of pounds into climate-warming energy. Also, his father-in-law, Lord Howell, is president of the Shell and BP-funded British Institute for Energy Economics. Lord Howell was a Foreign Office minister until 2012.

Energy minister Gregory Barker, who shamefully voted against the amendment, has been the head of international investor relations for Anglo Siberian Oil and Sibneft, a Shareholder in New Star European Growth Fund plc and Henderson High Income Trust plc and corporate finance director of the Australian-owned International Pacific Securities.

The vote on the amendment would have been different if just 12 MPs had voted differently.

It would be in the interests of democracy, let alone the planet in this case, that MPs should be barred from voting on matters in which they have a financial interest.

By the way, mandatory carbon reporting introduced by the government will force fossil fuel companies to disclose their carbon footprints, but banks and other institutional investors will not have to declare the emissions arising from their loans and investments.

Yet without them, big oil, gas and coal companies like Shell, BP and Rio Tinto would not be able to raise billions from pension funds, banks and other financial investors based in the City of London and beyond.

By including these ‘financed emissions’ in mandatory carbon reporting regulations, Vince Cable could force financial institutions to disclose their full carbon impact and fully expose the degree of exposure that these institutions have to the carbon bubble.

The 'carbon bubble' is the name given to the assets held by these institutions which may become worthless if they are not allowed to be exploited by national or global level agreements to curb global warming.

It is therefore in the interests of these companies themselves to account for the impact of such investments.

The lists:

Here is the list of ministers who voted against the amendment, together with their connections to the fossil fuel industry:

Gregory Barker	Anglo Siberian Oil (1998–2000) Head of International Investor Relations for Sibneft (1998) 50 Shareholder in New Star European Growth Fund PLC and Henderson High Income Trust PLC.51 Corporate Finance Director of the Australian owned International Pacific Securities
Vincent Cable	Chief economist and other positions at Shell International (the world’s most carbon intensive oil company: A leaked memo addressed to Cable from Shell’s chief executive referred to him as “contact minister for Shell”) (1990-1997).
David Cameron	Accepted £10,000 from Jonathan Green of hedge fund GLG Partners. GLG is a frequent investor in fossil fuels. Accepted £10,000 from Mark Foster Brown of hedge fund Altima Partners (2005), which deals in fossil fuel shares, including Cadogan Petroleum and Lonrho plc,29 which is a multi-sector company involved in building port terminals in Africa “to support the oil and gas industry"
Kenneth Clarke	Director of Foreign and Colonial Investment Trust plc (until 2007)
Nick Clegg	Accepted £9,000 from Neil Sherlock, head of public affairs at auditors KPMG (2006-2008)
Michael Fallon	Director of Tullett Prebon Plc (independent non-executive); inter-dealer broking (until 2012)
Robert Goodwill	Shareholding in Barclays, Gazprom and Lukoil. Accepted £11,000 donation from Mountboon Investments Ltd financiers (2010)
Dominic Grieve	Total shareholdings of more than £240,000 in Anglo American, Standard Chartered, Rio Tinto and Shell
Michael Gove	Accepted £10,000 donation from Aidan Heavey, founder and chief executive of global gas and oil company Tullow Oil(2010)
William Hague	Worked for Shell UK (1982-83). Accepted over £25,000 in non-cash donations from CQS
Stephen Hammond	Director Commerzbank Securities (2000–Present) Has shareholdings in Peal Gas Ltd
Greg Hands	Worked or three different firms in an eight year banking career. (1990-97)
Matthew Hancock	Payment of £3,000 from UBS AG for speech (2011)74
Mark Hoban	Payment of £1,300 from JP Morgan Chase for speech (2010)76
Nick Hurd	Represented a British bank in Brazil (1995-1999).
Sajid Javid	Directorships and other senior positions at Deutsche Bank AG, (2000-2009), JP Morgan Partners LLC (1997-2009) and Chase Manhattan Bank (1991-1994)
Jo Johnson	Investment banker at Deutsche Bank (until 1997)
David Lidington	Worked for BP (1983-86) and Rio Tinto (1986-87)
Mark Lancaster	Management consultant at Palmer Capital a privately owned venture capital and fund management business. (resigned 2012)
David Laws	Vice President JP Morgan’s Treasury Division (1987-1992) Managing Director Barclays De Zoete Wedd (1992-1994)
Maria Miller	Marketing manager Texaco (1990-1994)
Francis Maude	Member of Barclays’ Asia-Pacific Advisory Committee. (2005-2009). The Conservative Party’s Implementation Team which reported to Maude also received significant donations in kind from accountancy firms KPMG, PriceWaterhouseCoopers, Ernst and Young and Deloitte.
Theresa May	Shareholdings held by self and spouse in Prudential Corporation plc. Accepted donation in kind from Michael Hintze who runs the hedge fund management firm CQS Asset Management. (2009)
David Mundell	Accepted £5,000 from Caledonia Investments PLC investment trust. (2010)
George Osborne	Accepted donations and donations in kind from Michael Hintze of CQS hedge fund worth £38,700. Leading beneficiary of donations in kind to the then shadow cabinet from audit firms KPMG (£62,500) and Deloitte (£60,000) both of which have specialist oil and gas departments. (2009) Also, his father-in-law, Lord Howell, is president of the Shell and BP-funded British Institute for Energy Economics. Lord Howell was a Foreign Office minister until 2012
Andrew Robathan	Worked for BP (1991-92)
Desmond Swayne	Manager of Risk Management Systems at the Royal Bank of Scotland and other senior positions (1989-1997)
Elizabeth Truss	Commercial manager at Shell (1996-end date unclear)
David Willets	Senior advisor to Punter Southall a leading actuaries and actuarial consultants.

This is a list of other ministers who were absent for the vote, but who also have such connections:

Alan Duncan	Oil trader and other positions at Shell (1979-1992) Consultant for Vitol.
Philip Dunne	SG Warburg (1981-88) Former Managing Director of Lufkin & Jenrette a US investment bank.
Philip Hammond	Director of Consort Resources Ltd later purchased by Caledonia Oil and Gas (1999-2003)
Oliver Letwin	Directorships and other senior positions at Investment bank NM Rothschild (1986-2009)
John Nash	Assistant Director Lazard Brothers and Co Ltd (1988-1989)
Hugh Robertson	Assistant Director and management head Schroder Investment Management (1995-2001)

Finally, here is a list of ministers in the House of Lords with such connections: Lets see how they vote when the Energy Bill comes before them:

Lord Ahmad of Wimbledon	Senior positions at NatWest, Alliance Bernstein, and Sucden Financia (1991-present)
Lord Deighton	Chief Operating Officer for Europe and other positions at Goldman Sachs. (1983-2005)
Lord Freud	Vice-chairman and other senior positions at S G Warburg (later known as UBS Investment Bank) (1984-2003)
Lord Green of Hurstpierpoint	Chairman and other senior positions HSBC (1992-2010)
Earl Howe	London director of Adam & Co. plc (1987-1990)

MPs slam Treasury, send draft Energy Bill back for redrafting

Cowboy antics: This woman (Chloe Smith, Treasury Minister) with her boss, George Osborne is delaying and damaging investment in low carbon generation. They should both get out of the way of the experts.

Government policy needs to do more to reduce the demand for energy, say MPs examining the draft Energy Bill, as well as find better ways of subsidising low carbon energy.

They also say that, as it stands, the Bill will reduce competition in the market and raise costs. Furthermore, vacillation in Government is causing delays in the much-needed investment in new energy infrastructure.

The “demand-side needs to be given a much higher priority in the Bill," not least because it is likely to deliver much more cost effective solutions than building ever greater levels of generating capacity," says the Select Committee on Energy and Climate Change, which is scrutinising the Bill.

The MPs want the Bill to be redrafted in order to capture much more than the 35% of possible energy saving already in the draft, as identified by last week's report on energy efficiency, commissioned by the Department for Energy and Climate Change (DECC).

They condemn the Treasury for failing to provide a witness to their enquiries or even answer their questions in writing, which has “seriously undermined" their ability to do their job. The MPs were told by numerous witnesses that Treasury policy, and in particular the levy control framework, under which the Treasury holds the purse strings of DECC, is having a direct impact on decisions about investing in new energy infrastructure.

Tim Yeo MP, Chair of the Committee, said: "Electricity market reform is essential, but the new contracts proposed by the Government will not work for the benefit of consumers in their present form." He said the Government needs to get back to the drawing board over the summer "to make sure that the Bill is fit for purpose in the autumn and is not subject to any further delays".

Commenting on the report, John Cridland, CBI Director-General, said:
“The Committee rightly highlights the importance of agreeing the design of the contracts for difference, and this must be done by the autumn. But companies are also eager to get on with investing now, and the decision on the renewables obligation support rates cannot wait any longer.”

The Bill’s key measures

The draft Bill contains four key measures: a Feed-in Tariff for low-carbon energy, a Carbon Price Floor, an Emissions Performance Standard and a Capacity Mechanism. The Carbon Price Floor has already been legislated for through the Finance Act 2011, so the Bill focuses on the remaining three measures.

The MPs say that Feed-in Tariffs with a Contract for Difference (CfD) are far too complicated in their presently proposed form. These are a contrivance at the heart of the Energy Bill designed to make it more attractive for investors to put money into low carbon generation, because it is more expensive to construct but cheaper over the long-term.

There are three problems associated with the model, they say. Firstly there is “genuine uncertainty" whether they are legally enforceable.

Secondly, Treasury insistence on capping DECC's spending will increase the risk to developers, possibly causing funding streams to dry up. Drily, the MPs send a message to the Treasury, that in the absence of any word from them, they assume that the statement in the Bill that the UK's statutory climate obligations have priority over the levy cap, means that the Treasury would allow further spending than the cap permits, in order to meet the country's climate change targets. They therefore invite an explanation from the Treasury about how the working of the levy will be modified to make this possible.

The third problem with the model is that by removing an obligation on the part of utilities to purchase renewable energy, this could actually lead to fewer players in the market, and “greater levels of vertical integration", reinforcing the power of the Big Six, which is the opposite of what the Bill is supposed to do. In fact, they say, the Bill should do more to support the entry of smaller players into the market and their continued existence.

They want to see a single counterparty to contracts that is underwritten by the Government, with a contract and design that is legally enforceable, because this is the best way to reduce the cost of capital. At present, what is proposed is a "multiparty payment model" whereby liabilities are borne collectively by all energy suppliers.

They also want to change the registration process for allocating CfDs in order to reduce risk, and extend the eligibility threshold for small-scale Feed-in Tariffs to at least 10MW, again to permit smaller scale generators and community-owned schemes to take part, and call for a fixed Feed-in Tariff to support community renewable energy schemes "up to at least 10MW and potentially up to 50MW in size".

Regarding nuclear power, they want to see more transparency for the process for agreeing a strike price to avoid the perception that decisions are being made “behind closed doors". They want to see a committee of independent experts appointed to oversee this negotiation process.

They don't believe that auctions of strike prices are a great way to deliver a cheaper outcome, because they can actually deter participation by smaller generators due to the uncertainty and expense of taking part. Instead, they propose that the Government should set out a planned reduction pathway for strike prices. This would guarantee a reduction in the level of subsidy paid by consumers over time.

They also want Government to provide clarity on the strike price level beyond 2017 as soon as possible, to help secure investment for emerging technologies like wave and tidal power.

Whilst admitting that the Government is right to prioritise security of supply as a policy condition, they say that ironically the possibility of a capacity mechanism appears to be freezing the prospect of new investment. Therefore, the Government must urgently give more clarity about how the capacity mechanism will work, and give more consideration to the consequences of feeding a large quantity of intermittent generation into the National Grid.

Further modelling is also required to reduce the likelihood of policies leading to a new dash-for-gas, they say. This should include the modelling of demand-side reduction strategies and energy storage, which themselves may need some form of support in order to gain traction in the marketplace

They slam the Emissions Performance Standard as “at best pointless" and, at worst, by grandfathering the initial level until 2045 undermining our ability to meet long-term carbon targets.

They want to see MPs scrutinise any decision taken to exempt generation plant from Emissions Performance Standards, which is permissible in the draft Bill for reasons of maintaining security of supply.

Nor do they think the National Grid should be the body that delivers Electricity Market Reform because it would lead to unnecessary extra costs to consumers and represents a potential conflict of interest.

The Energy Bill is a framework Bill, and will need secondary legislation in order to effect the required changes. Because time is slipping away, the MPs suggest that draft secondary legislation, including a model Contract for Difference, is prepared in time for the House of Commons' formal consideration of the Bill.

Tim Yeo concluded his comments on the Bill by saying that if it “does not set a target to largely decarbonise the electricity sector by 2030, then the UK may miss one of the biggest opportunities it has to create a low-carbon economy in the most cost effective way."

Government energy policy splits laid wide open

Veteran environmentalist MP Tim Yeo has called the energy minister Ed Davey and his department "weak",  and slammed tjhe Treasury,  and other departments for interfering in the UK's carbon-reduction and energy policies.

Speaking at today's UK Energy conference organised by The Economist magazine, Tim Yeo, Chair of the Commons Energy and Climate Change Select Committee, slammed the Treasury for constantly interfering with DECC's activities and policy development, confirming (which is news to no one who has been following environmental issues for 30 years) that the Treasury is not at all green.

He didn't stop there, but also laid into the Department for Communities and Local Governments, and the Department for Transport.

He labelled DECC a “weak department" for letting its policies be "crawled all over" by these three other departments and called Ed Davey a “junior partner" in any negotiations.

Referring to the carbon price floor as “the Treasury's latest wheeze" and “simply a way of getting more tax", he said that “the UK needs a carbon price signal not a carbon price floor, which is having the opposite effect to what George Osborne claims".

This is the first time there has been such open admission by an MP at a major energy conference of the existence of such high conflict between these government departments.

Yeo said that if Britain wants to be in the “premier division" internationally in 15 years' time, then energy needs to be higher up the priorities for the Government.

Despite this, he said that the required level of investment in UK energy infrastructure, of £200 billion by 2020 is “achievable", although he said there is no 'plan B' if we fail.

He said that the technology is already to hand to solve our energy crisis but that we don't yet have the right policies and price signals. He expressed alarm that firms like E.ON are pulling out of nuclear power in the UK.

While saying that the UK cannot rely on fossil fuels, whose price will rise due to rising demand, Yeo, a veteran Tory environmentalist, advocated that “we should exploit the shale gas resources we have in this country".

Yet in the same breath he said that replacing coal with gas “doesn't get us anywhere near the Committee on Climate Change 2030 decarbonisation target".

On fuel poverty, he said that it can't just be solved by changes to energy policy because it is also a Social Security issue.

Tony Cocker, Chief Executive Officer, E.ON UK, blamed a pause in investment on last year's review of the Renewables Obligation banding levels, and its (in investment terms) imminent demise in 2017.

Electricity market reform delay

Cocker, said that the UK needs the electricity market reform to happen speedily and not just be a “make do and mend" solution. "We are not asking for an extension of CERT and CESP we are pretty sure we can hit the targets" we have on fuel poverty, he added.

All the panel agreed that certainty was urgently needed on the planned reforms, especially in the light of alarming reports by the BBC last night that legislation on the topic would be postponed this summer to make room in the parliamentary timetable for reform on the House of Lords.

This was immediately denied by a Department for Energy and Climate Change spokeswoman, who said, “This is categorically untrue. We have said for some time that we intend to legislate for electricity market reform in the forthcoming session of Parliament”.

On the issue of energy pricing and investment, Cocker said of E.ON “We need the trust of our customers to create a sustainable energy system", somewhat ironically given the number of protesters outside the conference who were not permitted to enter.

He admitted that his company “needs more transparency on pricing and profits", and laid the gauntlet down by promising to put the extent of his bonus in the public domain.

The panel chairman, the BBC's Energy and Environment Analyst Roger Harrabin, earlier asked the organisers why protesters who had gathered outside the building, part of a Climate Justice day of action, were not being allowed in, and was told that the conference programme had been changed to reflect popular concerns about fuel poverty, and that they and grassroots organisations would be invited to next year's event.

Raising laughter, Mr. Harrabin summarised six months of energy policy in eight words as: “FiTs fiasco, nuclear no-show, wind whiplash and shale shivers".

Investment challenges

Speaking for the Carbon Trust, its CEO Tom Delay admitted that “sustainable solutions are difficult to invest in because they are capital intensive" and because of the uncertainty around costs.

He said that “light touch energy regulation" is deterring investment in “resilience, efficiency and an overhaul of the National Grid".

However, he advised that “it's dangerous to always focus on cost rather than investment"; it's the lifetime savings on bills that should be the chief criteria for investment decisions.

That is why the quick payback received from investing in energy efficiency makes it an “easier option" for large companies to be sustainable.

He slated UK building standards on energy efficiency for being too low, a decade or two behind those in Europe and North America.

Fuel poverty

The London School of Economics' Professor John Hill, author of last March's landmark Fuel Poverty Review, astonished the audience by explaining that under current definitions of fuel poverty, the Queen qualifies since over 10% of income is spent on fuel.

He said that a better criteria for fuel poverty is to measure the overlap between low incomes and high energy costs.