Andrea Leadsom: "Don’t be browbeaten by fracking scaremongering"

Posted On: 
24th March 2016

Andrea Leadsom is on a mission to change the terms of the fracking debate and win round local communities. The energy minister talks to Kevin Schofield

Fracking, it is fair to say, does not get a great press in this country. Rightly or wrongly, those who oppose hydraulic fracturing – to give it its Sunday title – garner more headlines than the technology’s proponents.

They claim it causes earthquakes, poisons drinking water and blots the landscape. Much better to rely on windfarms and solar to meet the UK’s future energy needs, they say.

Andrea Leadsom, however, is on a mission to change the terms of the debate. She is almost evangelical about fracking, which she is convinced is the answer to Britain’s energy conundrum – an increasing dependency on gas at a time when we are producing less and less of the stuff here in the UK.

She says: “As things stand, we have 40% of our gas being supplied from the North Sea basin and that’s reduced from what used to be almost all of it. In the next 15 to 20 years that will reduce to 25%, so the difference is made up of imports from Norway and largely Qatar.

“There’s the ridiculous argument that somehow we don’t need gas, we can just do it with windfarms and solar. Of course that’s absolutely implausible. 85% of us use gas for heating and cooking, so we’ve got to have it. Gas is absolutely essential to the UK’s energy security and we’d be mad not to look at what we can do at home.”

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For the uninitiated, fracking involves drilling deep into the earth and then sending a high-pressure blast of water, sand and chemicals into the rocks below to release gas. Large amounts of shale gas have been identified across the UK, and drilling licences have been awarded to a number of companies. But thus far, no applications have received planning permission.

According to the energy minister, Britain is in danger of missing out on a technology which will generate jobs, grow the economy and keep the country’s radiators on for years to come.

She also takes head-on the green lobby’s safety concerns, insisting the safeguards are in place to make sure fracking can be both clean and safe.

“It is way safer than most industrial processes,” she insists. “We’ve been properly regulating offshore and onshore gas for 50 years and have got the toughest regulations in the world.

“People say it’ll cause earthquakes. It’s true it has caused some seismic activity, but that’s not the same as an earthquake. During the process of the actual hydraulic fracturing, an independent well inspector will be standing at the well head with very sophisticated equipment and in the event that you get seismic activity that is greater than slamming a door or jumping off a ladder then they will call a halt and carry on at another point.

“People argue that the chemicals used are absolutely poisonous and again that’s just not true. They are fully disclosed and published. They are not carcinogenic. Poisonous chemicals are not being put back into the water table. It is simply not the case that contaminated water will end up as drinking water. It’s just not true.”

Politics, of course, is the art of the possible. And the reality is that local councillors, with one eye on the ballot box, have very little incentive to give the green light to controversial schemes which could see them turfed out on their ear come the next election.

Leadsom implores her town hall brethren to look at the bigger picture and ignore the “scaremongering” of fracking’s many opponents. “It’s simply not right that the local authority needs to look into the entire safety and environmental issues because they are dealt with by the Environment Agency and Health and Safety Executive,” she insists. “What local authorities need to be looking at is the impact on local people.

“I appreciate it’s incredibly difficult politically, but looking at the benefits to the community they should be weighing that against lorry movements etc. Don’t be brow beaten by very scaremongering accusations into failing to take a decision or making a negative decision.

“It’s for local people to decide, but I do think this has become a situation where local people are not being given a balanced perspective. It’s foregoing a great opportunity for a new industry that could create £35bn for GDP and thousands of new jobs.”

The alternative to fracking, says Leadsom, is an increasing reliance on imported gas – putting Britain’s energy supply at the mercy of international events.

“There are geopolitical risks. If you are completely dependent for your core energy supply on imports then there are risks. As things stand we’re not concerned about gas security, but those things can change. There will always be a need to import gas, but how much are we comfortable importing?”

We meet just days after the Energy and Climate Change Committee published a scathing report into the government’s decision to cut subsidies for a number of green initiatives. Investors had been left “spooked”, according to its chairman Angus MacNeil, putting billions of pounds of much-needed cash for the sector at risk.

Leadsom, however, rejects the criticism and suggests that the investors are crying wolf.

“We’re not scrapping renewable subsidies, we’re simply saying that as soon as you can you should be standing on your own two feet,” she says.

“In 2011 we reduced subsidies for solar, and the green lobby came out saying this would destroy the solar sector, yet in the year following the reduction, the deployment increased enormously. Literally since we’ve done the review of subsidy levels in the Feed-In Tariff, we now have two quarters of evidence that shows, yes, renewables developers can still deploy even with the reduction in subsidy.

“While I am a big supporter of business, and it is absolutely their right to seek the highest profit possible, it is the job of government to look after the bill payers’ interests.

“The evidence is that businesses can still deploy up to the level of the cap with a 67% reduction in the subsidy. Does that mean that they do still need the higher subsidy or not? It would appear they don’t need it.

“My response to the select committee is look at the evidence of whether they keep investing. If they do, we were right, and at present there’s no evidence that they’re not investing.”

No conversation with a Tory MP is complete these days without a discussion about Europe. To no one’s great surprise, Leadsom is a committed Brexiteer. Her reason for wanting the UK out of the EU is a simple one, to allow British politicians to set to rules that the rest of us have to live by.

As a former Treasury minister, she insists the economic benefits of EU membership are far outweighed by the costs. “The shackles of being members of the EU is costing us jobs,” she declares. “60% of people employed in this country are in SMEs and very often a small percentage of those export to the EU. And yet 100% have to abide by EU regulations.

“It’s the regulations that are really petty around things like the content of a sausage. We abide by that, but colleagues on the continent don’t. They are hindering employers from wanting to take on new people.

“If we had our own ability to write these rules for ourselves we can deal with the unintended consequences. But where they are written at 28 member state level, it’s extremely difficult to get round it.”

As an example, she offers up the EU-wide cap on City bonuses.

She says: “I know a lot of people think those in the City shouldn’t get any bonuses full stop. But employers that want to keep competitive with US and Asian employers are now forced to put up fixed pay instead.

“That denies them the opportunity to reduce their costs when the business isn’t going well. So there’s a very fundamental unintended consequence. We’d all agree with the principle of huge bonuses not being paid to bankers, if we can make our own decisions. This is very damaging for our ability to control the City. We need to be able to regulate it.”

Like the opponents of fracking, Leadsom says those leading the Remain campaign – including her boss in Number 10 – are also guilty of “scaremongering” in an attempt to get their own way. Their warnings about the fate which they say awaits the UK outside the European Union are “totally overblown”, she says, particularly when it comes to the doom-laden forecasts that the ensuing uncertainty will lead to job losses and a severe economic shock.

On the contrary, she insists that a devaluation in Sterling could even be a good thing for UK plc.

Leadsom says: “The day after Brexit you wouldn’t find international uncertainty. It’s not the same as when Britain left the ERM, because that was a systemic shock. Brexit is simply a political adjustment and it’s not the case that the day after we left the EU everything would change.

“You might get a bit of volatility, but that is a markets thing, but the issue of what would happen to the economy is completely different and people should stop conflating the two. It’s just scaremongering.

“It’s simply not true to say that because there would be volatility in the City, therefore our economy would collapse. There’s also a very strong case that a bit of devaluation in Sterling is a good thing for the UK. Our problem is there hasn’t been an export-led recovery. What happens if you have a slightly weaker Sterling? Our exports become more attractive. So a bit of devaluation of Sterling would be good for our deficit and for our export-led recovery. A very strong currency can be damaging or helpful, but a bit of devaluation isn’t a bad thing just now.

“What people have to look at is immediately following a decision to leave, nothing would change. There is nothing to fear.”