On 01 August Emily Maitlis interviewed Energy and Climate Change Secretary Chris Huhne. Please note 'The Andrew Marr Show' must be credited if any part of this transcript is used.
EMILY MAITLIS: Now as they start their summer break, Liberal Democrat MPs will no doubt spend some time reflecting on what three months of coalition with the Conservatives has meant for their party. As we saw in the papers review earlier, a poll today suggests Lib Dem support has halved since the General Election. It seems rather fewer people now agree with Nick. Well the Energy and Climate Change Department is one of those now run by a Lib Dem: Chris Huhne. He joins me now. Chris Huhne, good morning. CHRIS HUHNE: Good morning. EMILY MAITLIS: Thanks for coming in. Let's start by talking about some of your interests as Energy Secretary, and BP have been if you like finally in the news this week with the announcement of the resignation by their chief executive who said he'd been "vilified" and "demonised". Was he made a scapegoat? CHRIS HUHNE: Well I don't think he had a very easy ride. I mean clearly anybody who is heading the company that was nominally in charge of the worst environmental disaster for many, many years in the Gulf of Mexico, in the United States, there was going to be an enormous public and political reaction. And it would have been exactly the same, frankly, if that sort of oil spill had happened in British waters. I mean this is enormous. For example, if you look at the last time we had something similar in the UK - Piper Alpha - it was literally hundreds of barrels a day, and we were talking at the peak of Deepwater Horizon of 65,000 barrels a day. So this was a massive environmental disaster. EMILY MAITLIS: But there was criticism, wasn't there, that your government stood back, let him take a good kicking from politicians on all sides instead of showing a bit more support for a major British company and substantial taxpayer? CHRIS HUHNE: No, I think what happened was very clearly that we recognised that this was an enormous environmental disaster and that any democratic government would respond in that way if it was on their patch and their waters. But we also made the point very clearly, both publicly and privately to the US administration, that BP is an important economic resource for this country and indeed for the United States: 40% owned by British shareholders and many of our pension funds, but 39% owned by American shareholders. So this is a really Anglo American company. Remember it was the result of a merger of BP and Amoco, the American oil company. EMILY MAITLIS: And they're now talking about replacing the BP logo on filling stations in the US with the Amoco logo. If this moves us away from oil to BP's detriment, is that still a move in the right direction? CHRIS HUHNE: Well the key message surely out of the Gulf of Mexico has got to be that we must accelerate this transition from an economy reliant on fossil fuels, on oil and gas and coal, to an economy which is based on renewables and other forms of low carbon energy like nuclear. And if we can do that, if we can make that transition more speedily, frankly it'll be very good news for the green growth prospects of the British economy. It'll also be very good news for making us more resilient against the sort of oil shocks which are likely to be a feature of the world in the next ten or twenty years. EMILY MAITLIS: So you are now including nuclear. I mean at one time Chris Huhne, the Lib Dem, would have run a mile from saying let's include nuclear. That's changed. CHRIS HUHNE: Well my personal position, and indeed the party's position, was always scepticism about the economics of nuclear. But what we did in the coalition agreement is recognising the differences between the Conservatives and the Liberal Democrats, we reached an agreement which will say very clearly there will be no public subsidy for nuclear because it's an old technology, it doesn't deserve new infant industry technologies; but at the same time if investors come forward with proposals, it's absolutely clear that they will go through. And we believe that will happen. We believe that there are investors who will be investing in new nuclear and it will have a part to play in our energy mix. EMILY MAITLIS: (over) So without a subsidy, what would you do? Would you guarantee, for example, electricity prices? Are you prepared to make sure new nuclear construction happens? CHRIS HUHNE: There'll be no question of guaranteeing electricity prices, but what nuclear will obviously have access to - in exactly the same way as all other forms of low carbon technology - is the advantages, for example, of not paying through the Emission Trading Scheme, the EU Emission Trading Scheme. So that's an advantage available to nuclear as well as to renewables. It will also benefit from (like renewables) the carbon price floor, which we're consulting on at the moment. So … EMILY MAITLIS: (over) Decommissioning? CHRIS HUHNE: … there's no specific subsidy to nuclear. But obviously it is a low carbon technology and, therefore, it will benefit from the framework which we've put in place to make this transition to a low carbon economy. EMILY MAITLIS: It costs billions just to decommission, to get out of the old system. Will any of that bill be picked up by the government? CHRIS HUHNE: Absolutely not. The key which we have to learn from our past experience with nuclear, as I'm very well aware - we're spending 1.8 billion a year decommissioning and dealing with the waste of past generations of nuclear and that must never happen again - it has to be included in the price that consumers pay for electricity coming from nuclear power stations. EMILY MAITLIS: So realistically if none of this happens because it's just too expensive for the companies involved, will you be upset? Do you accept this has to happen; that nuclear has to be a part going forwards? CHRIS HUHNE: (over) No, the transition to a low carbon economy is going to happen, and I believe … EMILY MAITLIS: (over) To nuclear? Including nuclear? CHRIS HUHNE: Well I believe that nuclear investors will come forward. Given the framework that we've put in place to encourage the low carbon transition, I believe nuclear investors will come forward and nuclear will play a part in the energy mix in the future. EMILY MAITLIS: And it should be, it should have to be? CHRIS HUHNE: Well the reality is that it's not my job to make decisions about particular types of technology. One of the things which we face, which is very clear in the energy world, is that there are enormous changes going on in terms of the costs and price of different technology. And that is a legitimate issue for investors to deal with, but what we as a government need to deal with is to put in place a framework which encourages all types of low carbon technology and then the marketplace decides on the exact balance between them. EMILY MAITLIS: And low carbon technology, with these very ambitious targets you're setting, will mean higher bills? £300 in the next ten years you've said. CHRIS HUHNE: Well it depends, I have to say. The absolutely key thing to remember is first of all we're going through an enormous programme of energy saving, so our central estimate is that actually there would be by 2020 a 1% increase in overall energy bills for households. But even that depends on what you think is going to be happening to oil and gas prices worldwide, and that assumes that there's hardly any increase in oil and gas prices. If you go like the International Energy Agency and assume that there is actually going to be an increase to $100, then in fact households in this country break even; and if you go like the US administration to $108 or our high scenario of $150 a barrel for oil, then we're actually gaining. EMILY MAITLIS: Okay, but for example … CHRIS HUHNE: So this is a very uncertain world and you can't simply say look we're going to lose or gain in ten or twenty years time because it depends on what the price will be if we don't do anything. And I think the price is going to be very high and very nasty. EMILY MAITLIS: This week though, we saw the doubling of profits for British Gas after that beastly winter. Should they now reduce their prices further? CHRIS HUHNE: Well clearly we need a very competitive market to make sure that any profits that are made are profits which are genuinely made in a competitive market due to companies making investment choices and getting returns which are well judged on the basis of risk. Now I think that we need to go on stressing to Ofgem, the regulator, that it is important to have an absolutely competitive framework and that they need to look and see whether we're being too generous. And the regulatory system is constantly under review to make sure that nobody's getting an easy ride. EMILY MAITLIS: Chris Huhne, I want to take stock. Three months on, the new coalition government polls, not just today but over the last weeks, show that your party is the one to suffer. CHRIS HUHNE: Well I've been a member of my party for a very long time and I can remember a time when we had opinion polls where we were just an asterisk. Literally we were within the marginal area of zero. So frankly it doesn't worry me, it doesn't … EMILY MAITLIS: (over) Well assuming they don't get down to that. We're looking at a halving since before the election. The Tories have not suffered at all from this coalition. CHRIS HUHNE: Well it's not surprising, frankly. That if you look at our support when we went into the election, clearly some of our supporters wanted us to do a deal with Labour, some of our supporters wanted us to do with the Conservatives. A number of people who wanted us to do a deal with the Conservatives thought that was because the Conservatives were not moderate and centrist enough, and they now discover in coalition with us that the Conservatives are more moderate and centrist. So for all those reasons, it's frankly not surprising. I've always thought - and I believe most of my colleagues think - that this is for the long-term; that we know we're going to have very, very tough decisions to take … EMILY MAITLIS: (over) And if it's for … CHRIS HUHNE: … and frankly in a year's time, I think both the Conservatives and Liberal Democrats are going to be pretty unpopular because we will have to take very, very tough decisions … EMILY MAITLIS: (over) If it's … CHRIS HUHNE: … because of the legacy that Labour has left us … EMILY MAITLIS: Sure. CHRIS HUHNE: … in terms of this massive deficit. And we're spending £4, and out of every £4 we're spending £1 is being borrowed and that has to be dealt with. EMILY MAITLIS: (over) If it's for the long-term then you are pretty relaxed about a poll that puts you on 12%. CHRIS HUHNE: Well we are… there's only one poll that really matters and that's on Polling Day when the voters go out and vote. And I am absolutely convinced that once we've taken the tough decisions which this government needs to take to deal with this appalling legacy that we've inherited from Labour - and it's astonishing that the Labour leadership candidates are all in denial about this - I think that we … EMILY MAITLIS: (over) So if you do get hammered at the polls, it will have been worth it? CHRIS HUHNE: Well I think that what we will see is that people will look back on the tough decisions which the government has had to take and will say well, look, they did the right thing; that here we have a real recovery going on, lots more jobs, lots more prosperity coming through; and when we actually have that election, you will find that people turn around and say well actually they deserve credit. EMILY MAITLIS: Doesn't it strike you though that the Conservatives have been very canny in placing Lib Dems in uncomfortable roles: Danny Alexander, for example, in the Treasury cuts; Nick Harvey on Trident; yourself nuclear power? It must feel like torture sometimes? CHRIS HUHNE: (laughing) I don't think there is any role in government, frankly, when you have to take so much out of public spending to make the books balance because our situation, remember, is the second worst budget deficit in the entire 27 member European Union. This is the inheritance from Labour. I mean it's an appalling inheritance and I don't know any job in government which is an easy government … an easy job, frankly. So the reality is that all of us face real stresses and strains on our budgets, trying to deliver in terms of frontline services, in terms of the objectives we have. In my own department's case, this enormous revolutionary transformation towards a low carbon economy, which will make us more energy secure, make us more independent from the buffeting that's likely to take place in world oil and gas markets. These are tough jobs for everyone. EMILY MAITLIS: And I know you're just about to go into your summer break, but forgive me for raising the conference season which people are always looking ahead to … CHRIS HUHNE: (over) I love the conference season. EMILY MAITLIS: (laughs) Well the Lib Dems already … CHRIS HUHNE: (laughs) I'm a great fan. EMILY MAITLIS: And I'm sure you'll be at two, if not more, this year. But the Lib Dems debating a motion against key Tory policies now like free schools and academies. Is this a time to reassert your identity, to pull away, to stop - in Ming Campbell's words - "looking like a dog and its owner"? CHRIS HUHNE: Well I think you know it's not the words I would have chosen. The reality is that we have come together with a government programme which has enormous numbers of key Liberal Democrat pledges in it. We've already taken 880,000 people out of income tax with the increase in the tax threshold. Now that was a key Liberal Democrat pledge and we're going to go further on that before the next General Election. Look at what we're doing on the green economy and on green growth. That's absolutely key Liberal Democrat … EMILY MAITLIS: (over) But when a senior Lib Dem like Sir Ming says this is what he sees now - the merging of the dog and the owner, the Lib Dem and the Conservatives, which is reflected presumably by voters or by the people asking these polls - you must start wondering what you're doing? CHRIS HUHNE: Well I have the advantage of having spent six years as a Member of the European Parliament, as Nick Clegg has as well, and we've seen this. This is not so unusual. In virtually every other country in Europe, you have coalition governments in which parties do preserve their identity and they do fight for what was in their programme at the last election and you compromise. And I think that actually British electors warm to that. They see two parties working together in the national interest, dealing with this massive problem of the inheritance from Labour of the budget deficit, and they see people who are genuinely struggling with issues which are important for the country. EMILY MAITLIS: And Chris Huhne, we're talking about the perils of power, I guess. And I imagine in other areas now, opening the papers and finding not just your professional, your policies scrutinised but also very personal affairs - your marriage, your affairs - has that seemed to you unfair now in this new role as minister? CHRIS HUHNE: No, that's always been part of the uh, part of the uh you know what comes with the warp and woof of being in government and, unfortunately, not all parts of the media are capable of making a distinction between what is in the public interest and what is of interest to the public. But you get on with the job and that private life is your private life and public life, the key issue is making sure that you're delivering on what is absolutely of concern, which to me is this enormous transition which we need to make towards a more energy secure world where we can insulate our economy from the buffeting and the shocks of oil and gas price rises in future. EMILY MAITLIS: Chris Huhne, thank you very much indeed. INTERVIEW ENDS
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