Fears rows undermining confidence in UK energy sector
10:22 15 November 2012
Investment experts told MPs last night that bickering between government ministers on energy policy was “undermining” the confidence of business that wanted to pump millions of pounds into the UK economy.
Their comments, made at a Westminster committee hearing yesterday, match those of East Anglian business leaders who have long complained that public ministerial spats on energy policy have spooked foreign investment into the UK energy sector.
Meanwhile their words come shortly before ministers are due to publish their energy bill, due out next week, which will set the shape of the UK energy market for years to come.
At the end of last month Tory energy minister John Hayes condemned the “peppering” of wind farms across the British countryside, prompting a verbal slap-down from his Liberal Democrat boss, energy secretary Ed Davey.
Mr Davey had previously spoken out in favour of subsidies for wind farms, meanwhile Tory environment secretary Owen Paterson slammed the “soviet style” system of state help.
Giving evidence to the energy and climate change committee yesterday Nick Gardiner senior director at BNP Paribas said: “The difficulty for credit committees and investment committees is understanding the UK context.
“They can’t always make political interpretation. Certainly from my side I’m getting a lot of comment from investors and credit committees saying ‘do I need to be worried’.”
He added: “The general comment would be there is a certain undermining of confidence.”
Meanwhile Ian Temperton, head of advisory at climate change capital, said: “The problem is that those things appear in CEOs’ press clippings.
“I was being told one story about supply chain investors; the UK representatives of foreign investors were being whipped back to their continental capital cities to explain what was going on the UK.
“That’s very unfortunate and at the level of hundreds of millions of billions of pounds decisions.”
However two other experts tempered the criticism, independent energy analyst Peter Atherton, said a political debate over the issue was inevitable, “healthy” and had to take place.
Ian Simm chief executive of Impax Asset Management, said the important thing was not “political certainty” but “policy certainty”, a government having a plan and sticking to it; something he hopes for once the government has passed the energy bill.
He said: “Political certainty is probably something of an oxymoron for me, so we don’t really take account of that. The political confusion around this issue is the secondary problem.”