Fears ex-BP and British Gas bosses could ‘sway’ government energy policy
Exclusive: Scale of ‘revolving door’ between major energy firms and key Whitehall posts revealed
The government has recruited more than a dozen energy industry insiders into senior positions, openDemocracy can reveal – raising questions over its refusal to crack down on energy companies’ soaring profits.
Among those given key roles in energy policy are a former British Gas director who is now responsible for setting the energy price cap at Ofgem, the UK’s energy regulator, and a non-executive director at the business department who remains a board chairman at energy giant BP.
Ofgem today announced the cap would be raised by 80% to £3,549 a year from October – sending bills soaring and potentially pushing millions into fuel poverty.
Campaigners have warned of a “badly regulated revolving door” between industry and government that could lead to “big energy businesses essentially getting to sway government policy in their favour”.
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Both candidates in the Tory leadership race to be the next prime minister have ruled out introducing a new tax on energy giants – many of which have reported record profits this year.
At least 10 other senior officials have been recruited to top roles at the Department of Business, Energy and Industrial Strategy (BEIS) from the oil and energy sectors.
They include a former lobbyist – who boasted of influencing the UK’s energy regulation while working for BP – and a former policy manager at an energy industry lobby group that campaigned against a windfall tax.
Five current top BEIS staff members, including departmental heads responsible for wholesale electricity markets and carbon emissions trading, were hired directly from Shell.
Officials were also hired from EDF, the UK biggest electricity supplier, and two industry lobby groups, Energy UK and the Energy Network Association.
Truss: ‘I don’t believe in windfall taxes’
Ofgem’s price cap director, Daniel Norton, joined the regulator after Colorado Energy, where he was commercial director, went bust in November 2021, costing taxpayers £6.6m.
Norton was behind Ofgem’s controversial decision earlier this month to allow energy suppliers to raise their prices every three months instead of twice a year. The move was branded “inhumane” by charities and prompted one of Ofgem’s board members to quit, saying the regulator had given “too much benefit to companies at the expense of consumers”.
Ofgem said the change was necessary to reduce “the risk of further large-scale supplier failures which cause huge disruption and push up costs for consumers”.
We urgently need decisions to be made in the public interest and maybe ex-oil and gas employees are not the ones to make them
Prior to working at Colorado Energy, Norton was a strategy director at British Gas owner Centrica. The day before starting at Ofgem, Norton boasted on LinkedIn that he had helped Centrica to win a court battle against the regulator over changes it made to the price cap in 2019, which cost the company £70m.
An Ofgem spokesperson told openDemocracy: “[Norton] came to Ofgem with a wealth of experience in the sector and we are delighted to have him working with us, bringing expertise and knowledge which is critical, especially in the difficult times we face”.
In a hustings for the Tory leadership contest last month, frontrunner Liz Truss ruled out introducing further levies on energy firms’ mammoth profits if she becomes prime minister.
Truss said: “I don’t believe in windfall taxes… What we should be doing is encouraging Shell and other companies to invest in the UK”.
Her rival, Rishi Sunak, has no plans to expand on a £5bn windfall tax on energy firms introduced when he was chancellor, despite unions and charities saying this is “not enough” to support struggling billpayers.
Speaking to openDemocracy, Tessa Khan, the director of climate campaign group Uplift, warned that ex-energy employees may not be prioritising billpayers’ best interests.
She said: “The revolving door is well-oiled between Whitehall and the energy sector, particularly the oil and gas companies who have long had significant influence in government.
“Right now we urgently need decisions to be made in the public interest and maybe former oil and gas industry employees are not the ones we should be entrusted make these choices.”
‘Poorly managed conflicts of interest’
Some former industry staff even sit as directors on government boards.
BP’s former UK head, Peter Mather, was appointed to BEIS’s board of non-executive directors in March – months after stepping down from the oil giant, where he had also served as senior vice president in Europe.
The government said Mather’s role will “be vital in shaping government policy”. But Mather is still listed as a shareholder chairman of BP Europe’s supervisory board and wrote on LinkedIn that he “remains” in the position.
BEIS’s directors are required to declare any “personal or business interests which may influence their judgement, or be perceived to, when performing their duties” – but the government has not updated its interest register since December 2021.
A BEIS spokesperson said that the register is updated once a year. They added that Mather had declared any potential conflicts of interest before taking his post and had agreed to recuse himself from any conversations involving BP.
Other BEIS staff who have passed through the revolving door include a former BP regulatory specialist, who claimed on LinkedIn that he had “improved commercial operations” for the oil giant by “influencing the design” of the UK’s gas market.
After being hired by BEIS in 2015, the staff member “led the in-house advisory team on best practice to develop analysis of UK energy policy regulation proposals”. He now heads the government’s heat pump scheme.
The UK's framework for managing how the private sector embeds itself in government is broken and needs an urgent upgrade
Susan Hawley at Spotlight on Corruption told openDemocracy: “The risk with a badly regulated revolving door and poorly managed conflicts of interest is that big energy businesses essentially get to sway government policy in their favour through the back door.
“There couldn't be a starker illustration at the current time of how this risk carries heavy consequences that impact us all.
“The UK's framework for managing how the private sector embeds itself in government departments and regulators is broken and needs an urgent upgrade to protect the public interest in government decision-making.”
Some BEIS officials have been through the revolving door more than once.
Steven Mills, the head of hydrogen sector development at the department, joined in January 2021, after working as a government relations adviser at Shell. Prior to this, he was an assistant director at BEIS, according to his LinkedIn.
A BEIS spokesperson said that Mills was seconded to Shell between March 2018 and January 2021.
In April, Shell announced that it would invest in the construction of a blue hydrogen production facility in North Lincolnshire. The project, which was celebrated by BEIS minister Gregg Hands, could be eligible for millions of pounds of government funding.
A BEIS spokesperson said: “These claims are, as usual, ridiculous. It is right that, as the government department responsible for energy policy, we appoint people with experience in the energy sector to make best use of the wealth of knowledge held within industry. Any potential conflicts of interest are always declared and properly managed as a matter of course.”
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