Ed Miliband does not understand job, say energy bosses

The Times
December 6, 2008
Robin Pagnamenta, Energy and Environment Editor

Power industry bosses have accused the Energy Minister of failing to understand the market and of ignoring them at a time when the industry is being asked to pour £100 billion into Britain’s ageing infrastructure.
Senior industry sources said that Ed Miliband, who was appointed as head of the new Department of Energy and Climate Change (DECC) on October 3, had repeatedly rejected requests for meetings with the heads of Britain’s biggest energy supply companies.
They also accused him of “shooting from the hip” on issues such as price cuts before he had had time to develop a proper understanding of the pressures the industry is facing. “It’s pretty clear that he doesn’t understand the market,” one said.
“He has rubbed a lot of people up the wrong way and has been frustrating to deal with, not just with us. Some of his own civil servants are complaining.”
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“So far it has not been a good relationship,” said another high-level source at one of the so-called Big Six, which comprises EDF Energy, E.ON, Centrica, Scottish & Southern Energy (SSE), Scottish-Power and npower. “It’s been difficult to get meetings in the diary.”
Mr Miliband is understood to have held two previously scheduled, routine roundtable meetings with all six chief executives but he is thought to have held only one formal bilateral meeting – with Vincent de Rivaz, of EDF Energy, the French company that is poised to take control of Britain’s nuclear industry through the £12.5 billion takeover of British Energy.
The two roundtable meetings were said to be difficult. At the first, Mr Miliband asked all the chief executives when they planned to cut retail prices – a question described by one as “naïve” at such a meeting, given the competitive nature of the business.
At the second meeting, industry chiefs reportedly pressed Mr Miliband on the difficulty they faced financing huge new offshore wind energy and nuclear power station projects against a backdrop of turmoil in global debt markets. They also sought his support in negotiations over a key review of price controls by Ofgem, the regulator, arguing that, unless they were allowed a higher rate of return, they would be unable to make the investments required in the network.
The Government expects the Big Six to finance the projects to help to cut Britain’s carbon emissions by 80 per cent by 2050.
A spokesman for the DECC declined to comment on individual ministerial meetings. He said that there was a good relationship between the new department and industry, which he described as “appropriate”.
However, the deterioration in relations behind the scenes reflects the tensions involved in the creation of the new department, which was set up to increase the focus of the Government’s energy policy on climate change and the environment.
Mr Miliband’s department was formed from two parts of government with a history of conflict – the climate change unit of the Department for Environment, Food and Rural Affairs (Defra) and the old energy division of the Department for Business, Enterprise and Regulatory Reform. Before its formation, the latter had adopted a far more pro-business approach and had placed greater emphasis on the security of Britain’s long-term energy supplies. Defra preferred to focus on the environmental and fuel poverty agendas.