Britain’s biggest energy users have welcomed the appointment of Michael Fallon as Energy Minister
The Conservative MP is widely seen as instrumental in recent steps to lessen the burden of the climate-change levy on some companies.
Big energy users such as steel manufacturers and chemical companies have complained that the cost of the Coalition’s green agenda will hit them hard, while the compensation scheme is inadequate compared with those for major European rivals.
Jeremy Nicholson, director of the Energy Intensive Users Group, representing big industry, said: ‘Projected increases in energy prices are almost entirely due to climate-change policies. The Government is talking about a £250 million compensation package over two years. To put this in proportion, Germany is offering £7 billion annually to its industry which, even though manufacturing is a bigger part of their economy, is still so much more.’
But Nicholson said Fallon was seen by his members as a valuable supporter of their interests. ‘He has been a very robust advocate of energy-intensive industries at the Department of Business,’ he said. ‘He was intimately involved in the discussions between us, the Department and the Treasury about exemptions from the climate-change levy, which the Chancellor included in the Budget.’
George Osborne announced that the ceramics industry would be exempt from the levy after claims that it could lead to electricity bills for steelmakers, glass manufacturers and chemical plants rising by 47 per cent by 2020 and more than 70 per cent by 2030.
As well as the £250 million compensation package there is a plan to exempt major intensive users from the cost of new measures to support low carbon energy introduced under the Government’s proposals to reform the electricity market.
However, big energy users say there is no guarantee these measures will remain after 2016. They also criticise the scale of help.
Fallon replaces John Hayes, the Tory who clashed with Ed Davey, the Lib-Dem Energy Secretary, over the proliferation of wind farms. Fallon was Business Minister, but will now have a dual role at the Business and Energy departments.
Mail on Sunday
March 30, 2013
New energy minister is a refreshing shade of green
Raise a cheer for Michael Fallon, who has unexpectedly just been given the responsibilities of the controversial energy minister John Hayes. For, though impeccably “dry” – in Mrs Thatcher’s terms – he is to thank for an important bit of greenenergy legislation.
It came about five years ago, after he came top of the draw for private members’ Bills and chose to adopt the Planning and Energy Bill, enabling councils to require developments to meet elevated energy-efficiency standards and get a proportion of their energy from renewable sources.
; “He piloted it on to the statute book with some considerable parliamentary skill,” recalls Andrew Warren, director of the Association for the Conservation of Energy, which helped to draft the Bill.
; But what should we make of the continually gaffeprone planning minister Nick Boles? Pressed by the appropriately named Mark Reckless to back plans to build houses on probably England’s best site for endangered nightingales, in Kent, he indicated that the fact that it was an officially designated Site of Special Scientific Interest need not stop the development.
; Yet these precious wildlife sites are so important that it is a criminal offence “knowingly” or – wait for it – “recklessly” to damage them.
The Daily Telegraph
March 30, 2013
PM brings coalition windfarm war to an end by appointing Michael Fallon to replace controversial Tory colleague
David Cameron has conducted a surprise mini-shuffle ahead of the Easter break, bringing a controversial rightwing energy minister into Downing Street.
John Hayes will be replaced at the Department of Energy and Climate Change (DECC) by the business minister Michael Fallon, who will straddle the business department while taking on some of his predecessor’s responsibilities. Fallon will allow the energy department to send more consistent messages to businesses about its commitment to low-carbon energy.
Hayes, a leading figure in the rightwing Cornerstone group, will act as a sounding board for the right inside Downing Street, a role previously held by Andrew Mackay and Fallon. He has been appointed a minister of state in the Cabinet Office and will attend the key morning and afternoon strategy meetings in Downing Street, giving Tory backbenchers reassurance that they have an ambassador at Cameron’s court. Hayes describes himself as the personification of blue-collar Conservatives, and is strong on traditional family issues.
Cameron sent Hayes to DECC six months ago, urging him to represent the anti-windfarm interests on the right. However, it appeared that mixed messages from the department were alienating potential business investors.
One Liberal Democrat source said: “Number 10 is now in ‘sell green energy to investors’ mode, and they realised that although John was good at playing to the Daily Mail gallery, he was not what companies like Siemens wanted.”
Hayes had some ferocious clashes with the Liberal Democrat energy secretary Ed Davey.
At one point Davey’s frustration with his junior minister prompted him to write to Cameron to demand that Hayes be taken off the windfarm portfolio because his prejudices were exposing the department to a very high risk of judicial reviews.Cameron took no action, and there has been no immediate policy clash within the department to prompt his ejection. It is understood that DECC’s new permanent secretary Stephen Lovegrove, appointed to boost business investment in green technologies, was unimpressed by signals Hayes sent out.
The appointment of Fallon will increase the profile of low-carbon energy inside the Department for Business, Information and Skills (BIS), which used to run energy. It comes at time when critics claim the government has underplayed the importance of green energy in its industrial strategy.
Fallon, a hard-headed effective minister, has piloted private member’s bills on green energy in the past. He will now have to balance the need to meet public concerns about the costs of green energy, and the need for investment. He has a substantial brief, making him one of the most important Tory ministers outside cabinet.
It had been Fallon’s move to BIS last September which created a gap for an ambassador of the right in Downing Street.
Hayes has wide contacts across the Tory party, including with the critical 2010 intake. One ministerial ally said: “If there are any plots to unseat Cameron, he will either have started them or know about them before they are hatched.”
Cameron’s supporters will be looking for any signs that the long-rumoured plot to unseat him has substance, and will be unnerved by a YouGov poll showing Boris Johnson would lift the party’s hopes of election. The poll shows that the Tories would get 31% in the polls under Cameron against Labour’s 37%.
However, when people were asked to imagine how they would vote if Johnson was the Tory leader, the two biggest parties would be level on 37% each – with the Lib Dems squeezed to 11%.
March 28, 2013
‘For Michael, it’s not about ideology – it’s about business’
Once dubbed the “Minister for Newsnight” Michael Fallon is seen in Downing Street as one of the more capable Ministers of State.
Although he lost out on a ministerial position when the Coalition formed he was rewarded for his unofficial role in defending the Government in the media by being promoted in last September’s reshuffle to “keep an eye on Vince” at the Department of Business.
A close ally of George Osborne, he is said to have impressed Downing Street by his promotion of the Government’s growth agenda.
He already had responsibility for green growth in that brief so his new responsibilities are a natural fit. He is also a good deal “greener” than his predecessor John Hayes. In 2008 he introduced a backbench bill to allow councils for the first time to set renewable and low carbon energy targets for new housing.
One senior Tory said: “Michael sees the economic benefits of [green energy]… It’s not about ideology, it’s about business.”
March 29, 2013
Financial: Banking: Lending: More questions for Barclays over startup business loan scheme
The government is extending its investigation into Barclays’ involvement in a state-backed loan scheme after the intervention of the business minister, Michael Fallon.
The bank faces renewed questioning over the defunct Small Firms Loan Guarantee programme after evidence emerged suggesting it broke guidelines before the credit crunch. The scheme for startup businesses, which guaranteed banks a return if their investment defaulted, has cost the taxpayer at least £200m.
Fallon is to scrutinise a loan made to a company owned by a Yorkshire businessman, Jeffrey Morris, who has alleged that Barclays did not comply with eligibility rules. Fallon will look again at events surrounding the loan, which could pave the way for a wider inquiry, amid pressure from Tory MP Alec Shelbrooke.
The Department for Business, Innovation and Skills (BIS) confirmed that it had asked the accountants who conducted an earlier, inconclusive study of the loan, RSM Tenon, to look at new evidence.
The evidence includes papers allegedly showing that Barclays sought collateral and gave the loan to a long-established business – which would contravene the terms. Morris defaulted in 2006 but Barclays reclaimed most of the balance. Morris argues that an internal email shows the bank arranged an SFLG loan for his business, Diamond Shape, even though he still had collateral. An SFLG loan could be guaranteed by the government only if the borrower had exhausted other collateral.
Barclays said: “The May 2006 email does not relate to Diamond Shape Ltd. It concerns a personal loan and was not relevant to the review of the March 2006 Diamond Shape’s SFLG application. Barclays co-operated fully and openly with RSM Tenon during their recent audit and provided the information requested. Information which did not relate specifically to Diamond Shape, or which postdated the loan, was out of scope.”
March 22, 2013
New UK aerospace institute planned with £2bn backing
Britain is to open a new research centre to keep its aerospace industry world-class, backed by £2bn investment from business and Government over the next seven years.
The UK Aerospace Technology Institute will work on developing the next generation of faster, quieter and more energy-efficient aircraft, in an effort to maintain the industry’s position as the biggest in Europe, second only to the US.
A core team of 30 to 50 staff, mostly seconded from industry and academic, will carry out aerospace research and development at a site likely to be based closed to a university, ministers said.
The institute forms part of a wider industrial strategy devised by business, Government and academics, which will focus funding on four key areas in which the UK already excels: wings, engines, aerostructures and advanced systems.
The Government pledged to provide more than £1bn in funding, which will be matched by companies. Officials said that represented fresh state funding, other than £90m announced in the last year.
Business Secretary Vince Cable said: “This long-term commitment of £2bn investment in aerospace research and development – half Government, half private – will anchor the sector in the UK for a long time to come.”
Ministers said the seven-year funding commitment, running into end of the next parliament, offered the long-term support the industry needed.
“This is all part of rebalancing the economy and playing to our strengths,” said Michael Fallon, the Business Minister. “We are the best in Europe [in aerospace] but we cannot sit back. It’s very important that we retain high-value manufacturing in this country.”
Katja Hall, chief policy director at the CBI business lobby group, said: “This is an ambitious strategy showing the Government can balance the long view with shorter-term priorities.”
Separately, Indonesian carrier Lion Air agreed to buy 234 A320 jets worth $24bn (£16bn) from European aerospace giant Airbus, reflecting the country’s rapid passenger growth of 20pc annually.
March 18, 2013
Five ways to show Britain means business
A revival in the economy would benefit everyone in Britain. Here are five suggestions for how to make that happen in this month’s Budget.
Last week, David Cameron wrote in this newspaper that his government is going to “stick to the course we are on”. It was a response to the Conservative Party’s disappointing third place in the Eastleigh by-election, which has fuelled talk of a leadership challenge. But, as we argued in our editorial, Mr Cameron is the right man for the job, and any attempt to oust him would be self-defeating for the Tories.
A victory for Ed Miliband at the general election would be a disaster for Britain because Labour’s plan to borrow and spend more is simply not realistic. We also urged Mr Cameron to concentrate single-mindedly on the things that matter – particularly growing the economy.
The response from readers was overwhelming, as you can see from the letters published below. Many of the Tories who wrote to us seemed unhappy or disillusioned. Of course, it may be that those who are happy with the Government would be unlikely to write in, but even so, the pessimism is striking. We understand that Britain cannot be turned around overnight and that Mr Cameron is constrained by being in a coalition. But a recurring theme in criticism of this Government is the need for greater clarity when it comes to the economy. That point was underscored last week when Robert Chote, chairman of the Office for Budget Responsibility, quarrelled with the Prime Minister over whether or not austerity was harming growth.
Any uncertainty is unhelpful, but what matters is getting the economy right. A revival in the economy would benefit everyone in Britain. Today, we offer five suggestions for how to make that happen.
Cut taxes. It is right that George Osborne has taken so many low-income earners out of income tax and that the top rate has fallen from 50 to 45 per cent. Nevertheless, the overall tax burden is rising, and high taxes are a barrier to enterprise.
The Chancellor should speed up the reduction in corporation tax in order to attract the attention of international businesses. There is also a case to be made for abolishing, or at least suspending, capital gains tax: this would provide a major incentive for companies with money in their bank accounts to invest it.
Mr Osborne should also lighten the tax burden on our beleaguered middle class; the steep rise in the number of moderate earners dragged into the 40p tax band could be halted by raising the threshold in line with inflation. If the middle classes can keep more of their hard-earned money, their additional spending would create jobs, put cash into the economy and produce revenue for the Treasury.
Rethink spending priorities. Although George Osborne has sensibly committed the Government to austerity, bolder reductions in public spending can still be made. Mr Osborne has cut total state spending by just 3 per cent in three years – after it increased by a staggering 58 per cent under Labour. The national debt is ratcheting up by £3,000 per second.
The solution is not savage cuts that cause hardship, but carefully targeted savings. Ending the ring-fencing of foreign aid or the NHS would free up money to finance tax cuts. There is also plenty of scope to shrink the bloated government machine. Eric Pickles has slashed staffing levels at his Department for Communities and Local Government by 28 per cent in a single year. He has shown that you can make savings, and trim the dead weight of government, without harming the services the public wants.
Build a sustainable energy policy. Green taxes and red tape increase the cost of energy. Britain needs to accelerate the exploitation of shale gas, and press on with building nuclear and gas-fired power stations. Cheap power is vital to keep energy-intensive industries in Britain whereas environmental regulations and taxes chase business overseas. Aluminium smelters at Anglesey and Lynemouth have been forced to close due to the rising costs of energy, meaning the loss of hundreds of jobs.
Lift the barriers to enterprise. The CBI recently warned that growth could be held back because the cost of red tape and bureaucracy is expected to rise by tens of millions of pounds. Granted, successive governments have tried and failed to slash the regulatory thickets, but the aggressive efforts of Michael Fallon, the business minister, in this area deserve encouragement.
It is embarrassing that last year’s World Bank survey found that it is easier to hook a new business up to the electric grid in Trinidad and Tobago, Tonga, Suriname and Greece than it is in the UK.
Send out a clear message. On the one hand, the Government claims that Britain is open for business; on the other, it sometimes indulges in populist, anti-enterprise rhetoric. The Chancellor needs to strike a consistent tone in his Budget, stressing that the UK welcomes wealth creators, rather than dwelling on the need to crack down on tax avoiders.
Business values certainty; there is growing evidence of international companies holding off from investing in what is otherwise a relatively attractive British tax regime because of uncertainty about where policy is heading. Let us not vilify job-creating companies – such as Rolls-Royce – that exploit tax breaks that are there for the specific purpose of persuading them to invest in Britain.
We know that the Government has the best of intentions and that change can be an uphill struggle. However, a clearer focus on policies that spur growth is a common-sense approach to our economic problems – and it will benefit everyone.
March 11, 2013
Daily Telegraph Benedict Brogan 2nd February 2012
Political experience …
There was an amusing moment yesterday on the Today programme when Michael Fallon popped up to put the case for stripping Fred Goodwin of his knighthood. Mr Fallon is David Cameron’s Passepartout, who can be counted on to go into battle whenever a cudgel needs lifting. He does it with a useful combination of menace and courtesy which makes him a favourite of the broadcasters. It helps too that he’s been around, as a minister under Mrs T, as a businessman, and as an influential member of the Treasury Select Committee. He knows his claret and his conspiracies, is an astute student of the political weather, and knows all the tricks of effective political combat, starting with ‘thumb on the blade and upwards’.
I say amusing because Mr Fallon is as robust a Thatcherite as it is possible to be and so I struggled to take him seriously as a defender of this new form of retributive capitalism. It was the ‘spokesman for the mob’ slot, a dead wicket for a Conservative. And the more I listened to him the more I wondered why I was listening to him. Why Fallon? After all, he’s not in the Cabinet, though I’m sure he should be. He’s not even a minister. He’s a backbencher who happens to be one of Mr Cameron’s most reliable consiglieres.
So I’ve asked around, and without wishing to deprive Mr Fallon of his current line of work as de facto chief spokesman for No10, there is plainly a problem: senior ministers are refusing entreaties from Downing Street to take to the airwaves to put the Government’s case. It is suggested to me for example that last Friday morning No10 struggled to secure a top-tier heavyweight to go on Today to face down Chuka Umunna on the Hester business. And if you think about it, you will seize the problem: when was the last time you heard – say – Jeremy Hunt or Eric Pickles or Justine Greening pitching in to defend the Government’s wider record beyond their brief? William Hague does it from time to time. Michael Gove likewise. but I am told appeals from No10 for volunteers go unanswered. Ministers will say that they must focus on their briefs. But I gather that at the top there is the beginnings of annoyance that the team is not operating like one. And that’s why Mr Fallon is so busy.
Why Michael Fallon is best …
With so many dramatic changes being planned to the way the UK economy is managed and regulated, the House of Commons’ Treasury Select Committee will soon take on a renewed importance as a watchdog and check on the government and Bank of England. Michael Fallon, Tory MP for Sevenoaks, deserves to be its new chairman. He is financially literate, economically sound and spent years as an entrepreneur and director of a top City firm. Let us hope MPs vote for him at next week’s elections.
CITY AM Wednesday, 2nd June 2010 EDITOR’S LETTER ALLISTER HEATH
On cutting public spending …
“Michael Fallon’s article in our series on public spending, published on Thursday, wsa an example of radical thinking by a Tory outside the charmed circle whose voice should be heeded.” Daily Telegraph 12th September 2009
On fighting for Sevenoaks …
“Take note of MP’s warning: Michael Fallon is not a brash man, he is not an MP prone to inaccurate outbursts for the sake of grabbing headlines, and he does not seek publicity for the sake of it. That is why his remarkably outspoken warning about the hospital should not only be taken on board, but should make the people of Sevenoaks stand up and listen.” Sevenoaks Chronicle 25th May 2006
“Livingstone’s transport empire may be extended: “It is a pretty sly thing”, said Michael Fallon MP for Sevenoaks “You could have Livingstone protecting fares for people who are his constituents at the expense of people who are not. The proposals would give the mayor the power to set fares and services for my constituents, but they do not get the chance to vote for who should be London’s mayor.” Daily Telegraph 20th February 2007
Fighting for tax-payers …
“Michael Fallon has done the public a real service by harrying Myners so effectively in the theatre of the Commons Treasury Select Committee.” Daily Telegraph 18th March 2009
“Michael Fallon MP, a member of the Treasury Select Committee, has called for more taxpayers to be switched to the shorter four-page return to ease the administrative burden.” Sunday Telegraph 28th January 2007
On prisons spending: Stephen Timms, Chief Secretary to the Treasury, “was also challenged by Michael Fallon, a former Conservative Minister and MP for Sevenoaks, over how the Home Office had managed to spend £197 million on new headquarters built under the private finance initiative but only £110 million on new prisons, with the result that the Home Secretary “is asking the courts not to send people to prison.” Financial Times 31st January 2007
Standing up for savers
“… Michael Fallon, the senior conservative on the Treasury Select Committee, said: “Yet again the banks are frustrating savers’ efforts to protect their money. The rates are low enough as it is, it does seem unfair if savers can not take advantage of better rates with their top-up money. This is a by-product of a very late Budget. The banks, building society and Treasury need to sit down and thrash this out to make sure savers don’t lose out.” Daily Telegraph 18th September 2009
Campaigning for more social mobility …
“‘Labour has created two nations: one in which the majority of us live, with jobs, cars and homes of our own. In the other live many stranded on benefits, in poor quality public sector rented accommodation, without cars, jobs and many of the luxuries of modern living’ said the report, drawn up by Tory MP Michael Fallon.” Daily Telegraph 15th February 2007
For grilling Gordon Brown …
“Few Tories ruffle the Chancellor’s leonine serenity. But Fallon stirred the beast into fury with a memo appearing to show Treasury fingerprints on an Office for National Statistics decision. The Chancellor roared words like “impugning integrity” but the MP kept going.” Evening Standard, 22nd March 2005
“Every Parliament brings its own Select Committee stars. In the 2001 Parliament it was two Tories who used a Select Committee to biff inscrutable authority. Michael Fallon and David Ruffley (Sevenoaks and Bury St Edmunds, respectively) were the only stout hearts who managed to grab Gordon Brown’s collar and ask the then almighty Chancellor what the blithering heck he was doing with the economy. How prescient their attacks now look.” Daily Mail, 9th May 2008
Grilling Northern Rock …
“As Treasury Committee member Michael Fallon told Mr Ridley yesterday: ‘You are the chairman of the bank that run out of money, that caused the first bank run in this country for 150 years. You have had to borrow millions of public money from the Bank of England. You have damaged the good name of British banking. Why are you still clinging to office? Isn’t that a darned good question?” Leading Article, Daily Mail 17th October 2007
Unexpected tributes …
“Michael Fallon’s article in our series on public spending, published on Thursday, was an example of radical thinking by a Tory outside the charmed circle whose voice should be heeded.” Daily Telegraph 11th September 2009
“Leaving aside frontbenchers such as David Cameron and the outstanding Vince Cable, there are back-bench House of Commons men and women such as Labour’s Gwyneth Dunwoody, Bob Marshall-Andrews and Kate Hoey, and the Tories’ Richard Shepherd, Michael Fallon and the reinvented Iain Duncan Smith who deserve to be considered great MPs.” Lord Tebbit, Daily Mail 4th February 2008
Why isn’t Michael Fallon in the Shadow Cabinet?
“Has anyone – apart from ConservativeHome noticed that the Member for Sevenoaks is pound for pound one of the most effective operators on the Tory benches? He offers a consistently robust Thatcherite critique of Labour’s economic failings. As vice-chairman of the Treasury Select Committee, where he plays a nifty bad cop to John McFall’s good cop, he has repeatedly skewered Gordon Brown and Alistair Darling, most recently on Northern Rock. Mr Fallon is a canny media operator who manages to generate more coverage than half the Shadow Cabinet. He must rank alongside David Davis and Chris Grayling as one of the biggest sources of Tory trouble for Labour. And he’s not afraid to speak his mind. In the Telegraph today he puts forward an elegant argument for tax cuts and a break with Labour’s spending plans. Significantly, he uses it to advance the criticisms of George Osborne’s “sharing the proceeds of growth” strategy by declaring: “Matching Labour’s plans until 2011 may have been politically astute; sharing the proceeds of growth thereafter now looks fiscally nebulous.” (No doubt he’s aware that the Shadow Chancellor’s pledge runs out in 2011). Dissing the leadership in public may undermine his case, but isn’t it time to bring Mr Fallon in from the cold? Mr Cameron believes barely a half-dozen of those in his top team are any good, so there is scope for vacancies. And Mr Fallon has the added advantage of being a former minister, whose presence would help draw the contrast between the Tory frontbench and a Brown Cabinet that is looking a bit juvenile.” Ben Brogan, Daily Mail 13th February 2008