Select Committee on Trade and Industry Second Report


163. During the course of this inquiry, several witnesses made reference to the large number of government departments and agencies with responsibilities for specific aspects of energy policy and the need to ensure clarity of purpose and effective co-ordination both within Government and between Government, industry and consumer organisations. We noted that the PIU advisory committee which oversaw the preparation of the Unit's report to the Prime Minister on future energy policy had representatives from no less than six Government departments, each of which will have some part to play in the implementation of that policy.

164. The DTI takes the lead on the development of policy on security of supply issues and co-ordinates the activities of several parts of its Energy Group. It takes advice from its Energy Advisory Panel, which brings together industry and environmental groups, Ofgem and Government departments, such as DEFRA. We have found some good examples of co-ordination of effort between departments or between Government and industry. The DTI co-ordinates activities to increase the international competitiveness of the UK oil and gas industries and to maximise the exploitation of the reserves on the UKCS through the PILOT forum, as noted above. We welcome the establishment last year of the joint DTI/Ofgem Working Group on Security of Supply, which monitors developments in supply/demand issues, looking at least seven years ahead. DEFRA is responsible for related issues such as climate change and environmental protection, energy efficiency and fuel poverty. We have been assured that the two departments work closely together on the social and environmental impacts of energy supply and demand.

165. Yet we were not persuaded that such co-ordination extends to all aspects of energy security policy. For example, as already stated, we were less convinced that there is much formal co-ordination between DTI, DEFRA and DTLR on issues associated with fuel for transport, despite the fact that this makes such heavy demands on the UK's oil and electricity supplies.[342] Some witnesses suggested that there was a need for an over-arching body, in effect a strategic energy authority, independent of individual Government departments, to provide long-term policy formulation and supervise its implementation.[343] Such a body poses difficulties: it is not clear how it would be able to ensure implementation without, in effect, becoming a Government department itself; and the creation of an energy agency would not solve the problem of overlap on issues such as housing, transport and competitiveness, let alone taxation, which would continue to be dealt with by existing Departments.[344]

166. We are therefore not convinced of the need for the creation of a strategic energy authority. However, we strongly urge the Government to put in place a more transparent structure for the formal co-ordination of energy policy development and implementation across Government. In the absence of a strong formal structure, we cannot see how the responsibilities of the Energy Directorate of the DTI could be dispersed throughout that Department in the way envisaged in the recent departmental restructuring proposals.[345]

342   See paragraphs 124-127 above. Back

343   See, for example, Qq 378 and 380 (CIA), 645 and 646 (Energywatch). Back

344   The overlap problem was recognised by Energywatch (Q 646). Back

345   Annex to the DTI's Memorandum to the Trade and Industry Committee on The Reviews of the DTI Structure and Business Support, paragraph 9 (Minutes of Evidence, 13 December 2001, HC 454-i). Back

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