Labour faces `Yes Minister' rift over coal crisis

A policy rift has opened within the Department of Trade and Industry, after it emerged that senior civil servants attempted to block Labour's recent initiatives to defuse the coal crisis. Chris Godsmark, Business Correspondent, reports on the increasingly frosty relations which observers have likened to an episode from "Yes Minister."

The internal disagreements between ministers and officials over energy policy have come as Labour faced increasing criticism from mining unions and industry executives over the coal crisis.

John Battle, the Energy Minister, has been accused by unions of focusing too much attention on attacking Richard Budge, chief executive of RJB Mining, and too little time trying to prevent looming pit closures.

Sources close to the DTI said civil servants had tried to block Labour's two key policies designed to eliminate the bias against coal. The two civil servants involved are thought to be Jonathan Green, director of electricity with overall responsibility for the power industry, and Malcolm Keay, director of energy policy and analysis.

Labour's hastily assembled moratorium on further approvals of gas-fired power stations this week was opposed by officials, who argued it would conflict with the existing policy framework. It was only when ministers spotted press reports of concerns by National Grid over the dash for gas that they had the justification to overcome the resistance.

Mr Battle hinted at the rift during evidence on Wednesday to the Commons Trade and Industry Select Committee. He told MPs that the DTI did not have an anti-coal policy. "There's no bias against coal at all ... There's no downer on coal."

But Mr Battle admitted to the committee that the earlier move to review the Electricity Pool, announced in the autumn, had met with internal "resistance." The pool, the wholesale power market, is frequently blamed for encouraging the gas-fired power stations at the expense of coal.

The rift gives an insight into Labour's difficulty in changing policy in the DTI, the department which pioneered Thatcherite privatisation and deregulation policy. Sources also described a "Yes Minister" mentality over access to ministers.

Meanwhile power companies warned yesterday that the moratorium could block future coal-fired power stations' applications as well as gas-generation projects. The delay on further approvals applies to all generating licences from the DTI, including environmentally friendly combined heat and power schemes.